EQT Greater China II (“EQT Greater China”) acquires a majority stake in Qinyuan Bakery (“Qinyuan” or the “Company”). Qinyuan is the leading retail bakery chain in Southwest China with a market share of approximately 40% in its two main markets, namely Chongqing and Guiyang. The Company‘s product offering, including pastries, cakes, cookies, beverages, mooncakes and rice dumplings, is supported by its long-established brand, customer loyalty and strong value proposition. As of November 2010, Qinyuan had a network of 223 stores, four bakery plants and approximately 2,100 employees across four markets with over 35 million directly accessible consumer population.
EQT Greater China will, over a two-year period and subject to certain conditions, acquire a total of 65% of the Company while the founding entrepreneurs will retain the remaining 35%. The founders, Ms. Congmei Liu and Mr. Zexiang Chen, established Qinyuan in 1989 and have since developed the bakery chain into a successful retail business and a high growth festive products business. Qinyuan’s store network covers Chongqing (headquarter), Guizhou, Chengdu and Shanghai. Qinyuan’s offering has a modern, healthy and family oriented concept targeting the mainstream mid-end consumers. The stores are strategically located and profiled to cater to the needs of a broad customer base – from home breakfast consumers in residential areas, to city dwellers such as students and businessmen, to lifestyle seekers enjoying a cup of coffee with pastries.
“Qinyuan is a leading and trusted Chinese bakery brand in a fast-growing industry and this fits well into EQT Greater China’s investment strategy. The founders have, over the 21 years in operation, built a very good business both in terms of growth and profitability. When entering the next development phase, EQT Greater China will contribute its industry knowledge from the retail sector but also from the European bakery sector in which EQT has significant experience”, says Martin Mok, Partner at EQT Partners in Hong Kong.
“We look forward to working together with EQT Greater China. Their strong global industrial experience plus their understanding of the local markets will be extremely valuable to Qinyuan when taking the business to the next level”, says Ms. Congmei Liu, Qinyuan’s co-founder and General Manager.
The bakery market in China is forecasted to exhibit significant growth prospects for the coming years and the Chinese consumption behavior for bakery products is tracking well the historical patterns observed in other more mature markets in Asia. The growth of Southwest China has also received ample attention recently. EQT Greater China will initially focus on expanding Qinyuan’s store footprint in current geographies, leveraging on the current strong market positions. Other strategic initiatives include enhancing store productivity, expanding the festive products business and entering new markets.
Martin Mok, Partner, EQT Partners Asia, +852 2971 5850
Johan Hähnel, EQT Partners Communications & PR, +46 8 506 55 334
EQT is the leading private equity group in Northern Europe with around €13bn in raised capital and multiple investment strategies. Together with a superior network of Industrial Advisors, EQT implements its business concept by acquiring or financing good medium-sized to large companies in Northern and Eastern Europe, Asia and the United States, developing them into great companies. Development is achieved by applying an industrial strategy with focus on growth. Since inception, EQT has invested in more than 80 companies (equivalent to €8.9bn) and exited around 40. EQT-owned companies have more than 500,000 employees.
EQT Greater China makes control or co-control investments in high-quality market leading, medium-sized companies in attractive industries in Asia with a potential for top-line growth.
EQT Partners, acting as investment advisor to all EQT funds, has more than 100 investment professionals with an extensive industrial and financial competence. EQT Partners has offices in Copenhagen, Frankfurt, Helsinki, Hong Kong, Oslo, London, Munich, New York, Shanghai, Singapore, Stockholm, Warsaw and Zurich.
More information can be found on www.eqt.se