Yum China to raise £1.68 billion from its secondary listing in Hong Kong

Yum China to raise £1.68 billion from its secondary listing in Hong Kong
Written by:
Wajeeh Khan
September 4, 2020
  • Yum China to raise £1.68 billion from its secondary listing in Hong Kong.
  • The fast-food restaurant operator will value its shares at £40.33.
  • Yum China brought Taco Bell To Beijing earlier this year in August.

Anonymous sources confirmed on Friday that Yum China (NYSE: YUMC) is interested in listing on the Hong Kong Stock Exchange. As per the sources, the company will price its shares at £40.33 and expects to raise a total of £1.68 billion from its secondary listing in Hong Kong.

The fast-food restaurant company, sources added, plans on selling a total of 41.91 million shares in its Hong Kong listing. The per-share price they highlighted represents a 4.8% discount on the price at which Yum’s the U.S. listed shares closed the regular session on Thursday.

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Yum China brought Taco Bell To Beijing in August

Yum China operates prominent fast-food chains in China, including KFC and Pizza Hut. It also brought Taco Bell to Beijing in August. The company refrained from making an official statement at this stage.

In the league of secondary listings, Yum’s £1.68 billion listing in Hong Kong will mark the third largest for the city in 2020.

In light of the rising tensions between Washington and Beijing, a bunch of prominent Chinese companies have resorted to listing close to home in recent months. JD.com listed in Hong Kong in June. Including overallotment, the tech giant raised a total of £3.34 billion from its secondary listing.

NetEase also listed on the Hong Kong Stock Exchange in June; a secondary listing that raised a total of £2.35 billion. China Bohai Bank launched its IPO in Hong Kong in July that raised £1.55 billion.

According to Refinitiv, equity capital market activity that accounts of secondary listings and IPOs in Hong Kong was valued at £15.43 billion ahead of Yum’s listing in 2020 so far. In the comparable period of last year, the activity was valued at a much lower £8.21 billion.

Yum China’s performance on the New York Stock Exchange

The NYSE listed shares of Yum China opened more than 2.5% down on Friday and tanked another 2.5% in the next hour. Including the price action, the fast-food restaurant operator is now exchanging hands at £40.14 per share.

The company touched a year to date low of £30 per share in early March when COVID-19 restrictions pushed its restaurants into temporarily shutting down. Confused about choosing a stockbroker to trade online? Here’s a list of a reliable few to make selection easier for you.

At the time of writing, the Shanghai-based company has a market cap of £15.14 billion and a price to earnings ratio of 40.41.