Center

Jingkelong takes Shoulian stake

(China Daily)
Updated: 2007-02-13 08:57

It said previously that it planned to increase its number of stores to 255 by 2009.

Jingkelong also recently announced that it plans to migrate its H-share listing to the main board of the Hong Kong stock exchange to raise funds for expansion.

Unlike the company that Jingkelong purchased previously, Shoulian is in bad financial straits. It recorded a loss of nearly 100 million yuan in 2005.

Analysts said despite the unproductive status of Shoulian, Jingkelong has much to gain from the deal.

The business model of stores from both groups is similar, according to analysts, making them more easily integrated. More than half of Xiaobaiyang Supermarkets, a brand name under the Shoulian umbrella, has over 50 outlets are in the suburbs of Beijing, where Jingkelong has been seeking to expand.

The deal will also upgrade Jingkelong's sourcing capabilities and bargaining power, it said.