China’s Richest Man Considers IPO for Department Store Business
July 17, 2013 Leave a comment
China’s Richest Man Considers IPO for Department Store Business
Zong Qinghou, China’s richest man who is worth an estimated $11.3 billion, is considering an initial public offering of his department store businesses.
There is no specific timeframe for the share sale, Zong said at a press conference in Beijing today. The billionaire controls food and beverage conglomerate Hangzhou Wahaha Group Co., which plans to have 100 malls in China in the next three to five years, according to a statement from the closely held company today.Profits from Wahaha’s drinks operations have helped boost the fortunes of the 67-year-old billionaire, who with his family holds more than 80 percent of the company. Wahaha, which makes bottled water to baby formula, generated $10.3 billion in revenue in last year. Zong in a 2011 interview with Bloomberg said he would make a push into department stores.
Profit margins in the department store business are “much better than in manufacturing,” Zong said at the time.
Wahaha, whose name means “Laughing Child” in Chinese, is the third largest soft drinks company in China, with a market share of about 7.3 percent, according to Euromonitor International. Coca-Cola Co. is the largest with a 15.7 percent share.
Zong helped found the Hangzhou-based company 26 years ago with a $22,048 loan, according to the Bloomberg Billionaires Index. Wahaha gets almost all its revenue from China, where economic growth is slowing and cost pressures are rising. China’s gross domestic product slowed to 7.5 percent in the second quarter, from 7.7 percent in the first quarter.
To contact Bloomberg News staff for this story: Tian Ying in Beijing at ytian@bloomberg.net
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