Private equity firm 3i has celebrated PCD Stores’ successful initial public offering on the Hong Kong Stock Exchange.
The company is a rapidly growing department store group in China with an emphasis on high-end luxury products.
PCD Stores offered 1.5 billion shares under the global offering, raising USD377m (HKD2.925bn) before the exercise of over-allotment option. The IPO values the company at USD1bn (HKD7.8bn). The retail tranche was 43 times oversubscribed.
In October 2005, 3i invested USD31m in the company, with Anna Cheung (pictured), 3i partner, taking a board role to support PCD’s growth and expansion. During 3i’s investment period, PCD Stores has achieved revenue and profit CAGR of about 100 per cent in the last two years alone. Its network of self-owned stores has risen from four to nine since January 2006 which in total means PCD currently operates or provides management consultancy services to 16 department stores plus one outlet mall across Beijing and seven provinces in China.
Cheung says: “We, at 3i, have been proud to work as an active partner with PCD Stores’ excellent management team led by Mr Alfred Chan. Given impressive business growth and value creation over the last four years, PCD Stores is now in an excellent position to further reinforce its brand recognition and image as a high-end luxury store operator in China.”
PCD Stores plans to use the proceeds from the IPO to open new stores, selectively acquire more department stores, fund the development and construction costs of Xian Phase II, a retail, commercial and hotel development jointly developed with a third party developer, and further strengthen working capital.
