Fosun cooks up deal for Malaysian eatery chain

Two staff members work at an outlet of Secret Recipe in Shanghai, Feb 16, 2014. [Photo/dfic.cn]

A leading domestic investment company, Fosun International Ltd, plans to invest in a Malaysian restaurant chain that it believes will be increasingly popular among the middle-class in China.

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Fosun will invest about 200 million yuan ($33 million) in Secret Recipe Sdn Bhd through a US dollar-denominated fund via Hong Kong-listed Fosun International, said Qian Jiannong, president of Fosun Tourism & Commercial Group.

He said the company will be the second-largest shareholder of Secret Recipe, without specifying the size of the equity stake.

"Secret Recipe is a leading lifestyle brand in Southeast Asia and happens to fill in a blank in the China market. We believe it will grow well here as Chinese youngsters become more affluent and attach more importance to healthy and stylish eating," Qian said.

According to the China Cuisine Association, the growth of the food and drink industry in China slid to a 21-year low in 2013. High-end restaurants in particular were hard-hit by the central government's austerity campaign.

But experts still believe the potential is huge for the middle-and high-end catering business.

Guo Guangchang, founder and chairman of Fosun, has previously said casual dining in China will continue to boom, with a compound annual growth rate of almost 28 percent from 2012 to 2016, and Fosun is "very optimistic" about the prospects for casual dining.

"We do not focus on the most expensive [restaurants] but on the fashionable but affordable ones that match closely with the mass market's tastes and spending power," said Qian.