(Yicai Global) Jan. 8 -- The listed arm of Chinese state-owned conglomerate Citic Group is looking to sell a 22 percent stake in McDonald's China, just over two years after buying into the fast-food chain, to distance itself from falling profits at the business.

The stock is up for sale on the China Beijing Equity Exchange, a bourse which handles the restructuring of state-owned enterprises, for at least CNY2.17 billion (USD312.7 million), the exchange announced on its website today. 

Hong Kong-listed Citic Ltd. indirectly owns 32 percent of McDonald's China through its Starry Dream Investments unit. In 2017, Starry Dream bought 61.54 percent of the firm's main China franchiser Fast Food Holdings which in turn holds a 52 percent stake in McDonald's China. Now Starry Dream wants to unload 42.31 percent.

Starry Dream is also trying to recoup CNY1.5 billion (USD216 million) it is owed by Fast Food. In order to collect the loans together with the value of the equity transfer, Citic will be looking for a buying price of around CNY3.7 billion.

Rabid competition in China's takeout food sector together with soaring meat prices due to an epidemic of African swine fever, have chipped away at earnings. Net profit at Fast Food dropped in the first 11 months of last year to HKD860 million (USD110.6 million) from HKD1.15 billion in 2018. Revenue rose, though, to HKD24.39 billion (USD3.1 billion) to Nov. 30 compared with HKD24.78 billion for the whole of 2018.

Citic's shares [HKG:0267] fell 1.3 percent today to close at HKD9.82 (USD1.26) each. The benchmark Hang Seng Index lost 0.8 percent.

In 2017, Citic together with private equity funds Citic Capital China Partners III and Carlyle Asia Partners IV paid USD2.08 billion to acquire McDonald's businesses in mainland China and Hong Kong. McDonald's kept a 20 percent stake, Citic and Citic Capital held a combined 52 percent through Fast Food, with Carlyle Asia owning the rest.

Editor: Kim Taylor