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 pleased
to announce that Taste‧Gourmet China Investment Limited, a wholly owned
subsidiary of the Company, entered into a joint venture agreement (“JV
Agreement”) with Shuanghui Food and Beverage Investment Management Company
Limited (“Shuanghui F&B”) for the formation of a JV Company. Shuanghui
F&B is a subsidiary of Henan Shuanghui Investment and Development Company
Limited (“Shuanghui Development”) which is a listed company (SZSE stock code: 000895)
on the Shenzhen Stock Exchange, established in 2020 in the PRC for the purpose
of investing in the F&B sector in the PRC. In the meantime, Shuanghui
Development is a subsidiary of the WH Group Limited (“WH Group”; HKEX stock
code: 288).


Pursuant to the JV
Agreement, the JV Company shall be owned as to 60% by Taste‧Gourmet China and
40% by Shuanghui F&B, after its formation. The registered capital of the JV
Company is RMB50 million. Taste‧Gourmet China and Shuanghui F&B will
contribute a total of RMB30 million and RMB20 million in cash respectively. The
JV company will set up in Shanghai and will mainly engage in the operation of
restaurants in the PRC. The JV Company has the right to use all brands owned by
the 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 excited
to have an opportunity to co-operate with such industrial giants, Shuanghui
Development and the WH Group. We believe that the formation of this JV Company
opens the door for us to expand our business outside Hong Kong, laying an important
first step for our long-term business development. With the support of these
strong partners, we can maintain a steady and quality of food ingredients in
the PRC and gain local knowledge in respect of the PRC market as well as legal
and financial advice on recruitments, lease negotiations, accounting systems
integration and so forth. More importantly, riding on the extensive coverage of
Shuanghui Development in PRC, we can enjoy a nationwide logistic network which
enable us to achieve next-day delivery for any products within the PRC (except
Xinjiang and Tibet). In addition, we can share our professional experience in
the restaurant operation in return. We firmly believe the formation of this JV
Company will create synergies and achieve win-win situation for all parties.”      


To be headquartered in
Shanghai, the JV Company will look for suitable locations for the opening of
the Group’s existing branded restaurants such as Nabe Urawa, Takano Ramen,
Parkview, Rakuraku Ramen, and so forth. With the majority of the supply of food
ingredients and related logistics taken care of by Shuanghui F&B, the Group
will just need to focus on the other aspects of the restaurant operations in
order to maintain the quality of the dishes as well as controlling costs. This
will become critical to the success of the Group to expand in the PRC. In
addition, with similarity between the Shanghai F&B sector and the Hong Kong
F&B sector, the Group believes that it will be able to replicate its
successful strategy from Hong Kong by opening restaurants in high footfall
traffic 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 and
operates 30 meat processing plants in 18 provinces in the PRC that includes hog
production, hog slaughtering and the processing and distribution of packaged
meats and fresh pork.  For the year ended
31 December 2019, Shuanghui Development recorded revenue of approximately
RMB60.3 billion and net profit of approximately RMB5.7 billion.  Annual sale of meat related products amounts
to approximately three million tonnes. 


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


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


Talking about the prospects, Mr.
concluded, “With our promising results in the past financial year, we
are confident in our business in Hong Kong in the long run. The successful
formation of the JV company is in line with the business strategy of the Group and
further build our growth momentum in the future. Recently, the Group has
appointed professional parties to evaluate the possibility of transferring the
listing of the Company’s shares from GEM to the Main Board of the Stock
Exchange. We believe that the transfer of listing will enhance the trading
liquidity 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 be
beneficial to the Group’s future growth and business development as well as its
financing flexibility. Looking ahead, we will continue to fully seize the
opportunities of development and strive to maximize the interests of our
shareholders and the Company.”

News Source: MediaOutreach



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