Taste‧Gourmet Group Announces the Formation of a JV Company with Shuanghui F&B in Shanghai

June 30, 2020 - 11:06
Taste‧Gourmet Group Announces the Formation of a JV Company with Shuanghui F&B in Shanghai

Set the First Step for Developing Group’s Business Outside Hong Kong Further Strengthen its Market Competitiveness


HONG KONG, CHINA - Media OutReach - 30 June 2020 - Taste·Gourmet Group Limited ("Taste‧Gourmet Group" or the "Company",together with its subsidiaries, the "Group"; GEM stock code: 8371) is pleasedto announce that Taste‧Gourmet China Investment Limited, a wholly ownedsubsidiary of the Company, entered into a joint venture agreement ("JVAgreement") with Shuanghui Food and Beverage Investment Management CompanyLimited ("Shuanghui F&B") for the formation of a JV Company. ShuanghuiF&B is a subsidiary of Henan Shuanghui Investment and Development CompanyLimited ("Shuanghui Development") which is a listed company (SZSE stock code: 000895)on the Shenzhen Stock Exchange, established in 2020 in the PRC for the purposeof investing in the F&B sector in the PRC. In the meantime, ShuanghuiDevelopment is a subsidiary of the WH Group Limited ("WH Group"; HKEX stockcode: 288).


Pursuant to the JVAgreement, the JV Company shall be owned as to 60% by Taste‧Gourmet China and40% by Shuanghui F&B, after its formation. The registered capital of the JVCompany is RMB50 million. Taste‧Gourmet China and Shuanghui F&B willcontribute a total of RMB30 million and RMB20 million in cash respectively. TheJV company will set up in Shanghai and will mainly engage in the operation ofrestaurants in the PRC. The JV Company has the right to use all brands owned bythe Group free of charge (with the exception of brands franchised by the Group).


Mr. Wong Ngai Shan,Chairman and Executive Director of Taste‧Gourmet Group, said, "We are so excitedto have an opportunity to co-operate with such industrial giants, ShuanghuiDevelopment and the WH Group. We believe that the formation of this JV Companyopens the door for us to expand our business outside Hong Kong, laying an importantfirst step for our long-term business development. With the support of thesestrong partners, we can maintain a steady and quality of food ingredients inthe PRC and gain local knowledge in respect of the PRC market as well as legaland financial advice on recruitments, lease negotiations, accounting systemsintegration and so forth. More importantly, riding on the extensive coverage ofShuanghui Development in PRC, we can enjoy a nationwide logistic network whichenable us to achieve next-day delivery for any products within the PRC (exceptXinjiang and Tibet). In addition, we can share our professional experience inthe restaurant operation in return. We firmly believe the formation of this JVCompany will create synergies and achieve win-win situation for all parties."      


To be headquartered inShanghai, the JV Company will look for suitable locations for the opening ofthe Group's existing branded restaurants such as Nabe Urawa, Takano Ramen,Parkview, Rakuraku Ramen, and so forth. With the majority of the supply of foodingredients and related logistics taken care of by Shuanghui F&B, the Groupwill just need to focus on the other aspects of the restaurant operations inorder to maintain the quality of the dishes as well as controlling costs. Thiswill become critical to the success of the Group to expand in the PRC. Inaddition, with similarity between the Shanghai F&B sector and the Hong KongF&B sector, the Group believes that it will be able to replicate itssuccessful strategy from Hong Kong by opening restaurants in high footfalltraffic shopping malls and creating a value-for-money dining experience.


For Shuanghui Development,it is the largest meat processing company in the PRC and currently owns andoperates 30 meat processing plants in 18 provinces in the PRC that includes hogproduction, hog slaughtering and the processing and distribution of packagedmeats and fresh pork.  For the year ended31 December 2019, Shuanghui Development recorded revenue of approximatelyRMB60.3 billion and net profit of approximately RMB5.7 billion.  Annual sale of meat related products amountsto approximately three million tonnes. 


The WH Group is the largestpork processing company in the world. In addition to Shuanghui Developmentbeing the largest meat processing company in the PRC, the WH Group also ownSmithfield Foods, Inc. a global food company domiciled in the United States. TheWH Group has sales to customers of more than 40 countries. It stands above therest with global market leadership in all key segments of the pork value chain,including packaged meats, fresh pork and hog production and achieved remarkableresults. Forthe year ended 31 December 2019, the WH Group recorded revenue of approximatelyUS$24.1 billion and net profit of approximately US$1.7 billion. Annual sales ofpackaged meat products and fresh pork amount to approximately 3.5 milliontonnes and 4.2 million tonnes, respectively. 


On 12 June 2020, Taste‧Gourmet Group announcedits annual results for the year ended 31 March 2020. Supporting by its stronglocal management team and adopting comprehensive measures of increasing revenueand reducing expenditure, the Group was able to achieve a more profitableresults than its peers. For the year ended on 31 March 2020, the Group's revenuegrew 20.4% to approximately HK$370.5 million. Profit attributable to Owners ofthe Company increased 10.3% to HK$30.1 million. Due to the overwhelming annualresults, the board of the directors recommended a final dividend of HK$0.015per share, together with the interim dividend of HK$0.015 per share, the totaldividend for the Year reached HK$0.030 per share.


Talking about the prospects, Mr.Wong concluded, "With our promising results in the past financial year, weare confident in our business in Hong Kong in the long run. The successfulformation of the JV company is in line with the business strategy of the Group andfurther build our growth momentum in the future. Recently, the Group hasappointed professional parties to evaluate the possibility of transferring thelisting of the Company's shares from GEM to the Main Board of the StockExchange. We believe that the transfer of listing will enhance the tradingliquidity of our shares and promote the Group's corporate image to public investors.We also consider that the listing of our shares on the Main Board will bebeneficial to the Group's future growth and business development as well as itsfinancing flexibility. Looking ahead, we will continue to fully seize theopportunities of development and strive to maximize the interests of ourshareholders and the Company."

About Taste‧Gourmet Group

Taste‧Gourmet Group is a Hong Kong restaurantgroup serving a variety of cuisines, mainly Vietnamese, Chinese, Japanese andWestern cuisines targeting mid-to-high-end customer segments. Since the openingof its first restaurant, Urawa Japanese restaurant, in December 2007, the Grouphas been expanding its restaurant network in Hong Kong through its multi-brandbusiness model. Currently, the Group owns and operates a total of 28 fullservice restaurants under various brands (comprising 10 self-owned brands suchas La'taste Vietnamese Cuisine, Dab-Pa Peking & Szechuan Cuisine, Dab-PaPeking & Szechuan Bistro, Dab-pa Modern Chinese Cuisine, Urawa JapaneseRestaurant, Nabe Urawa, Say Cheese, Sweet-o-logy, Rakuraku Ramen, WasyohuyaYamaichi; three licensed brands known as Parkview, Takano Ramen and Tirpse; andone joint venture brand known as Xianghui) and two kiosks strategically locatedin first tier and/or premium shopping malls or on street levels in prime areasand business districts, covering Hong Kong Island, Kowloon and NewTerritories.