Domino's Pizza China operator files for Hong Kong listing

Domino’s Pizza China operator files for Hong Kong listing

BEIJING — The operator of Domino’s Pizza shops in China, DPC Sprint, utilized Monday to go public on the Hong Kong inventory alternate, according to an online filing.

U.S.-listed franchisor Domino’s Pizza has a 15.7% stake in DPC as of the submitting date by way of wholly-owned entities, the doc confirmed. Nobody entity has majority possession.

A lot of the important thing info on pricing and timing had been redacted within the publicly accessible doc, because the listing has but to happen. Financial institution of America Securities is the only sponsor of the listing, in line with the applying.

DPC mentioned within the submitting it’s Domino’s Pizza’s “exclusive master franchisee” in mainland China, Hong Kong and Macao, with 485 straight operated shops in 10 cities on the mainland — principally in Beijing and Shanghai. The corporate mentioned it plans to open 120 new shops this yr.

Identical retailer gross sales grew by 18.7% in 2021. However the firm has operated at a rising internet loss over the past three years, which the submitting attributed to spending on new shops, central kitchens, advertising and workers coaching.

New shops take about one to a few months to interrupt even, with a typical money funding payback interval of three to 4 years, the submitting mentioned, noting shorter instances for new shops in Beijing and Shanghai.

In 2021, greater than 73% of income was generated by supply orders, the submitting mentioned. The corporate mentioned it hires devoted drivers — a workers of 5,375 in 2021 — to fulfill a supply promise of half-hour.

DPC warned about quite a few enterprise dangers, together with that of Covid-related restrictions.

Yum China, which operates Pizza Hut in China, warned on March 14 that same-store gross sales fell by about 20% year-on-year for the primary two weeks of the month because of Covid. That was earlier than the most recent Shanghai lockdown introduced this week.

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