Little Sheep Group Limited (HKG:0968) The Leader Sheep

The Little Sheep Group (HKG:0968) is one of the largest restaurant chains in China, with over 127 company owned restaurants and 248 franchisees' restaurants in China and HK. The company was established in 1999 and was listed in the HK Stock Exchange on the 12 June 2008. The successful listing also provides the Little Sheep Group with a stronger financial portfolio. In FY2008, the Little Sheep Group has experienced strong growth in revenue and also EPS, Revenue was raised up by 34% to RMB $1,271 million, EPS grows by 26.8% to RMB 13.55 cents/share. The company has also added 37 new company owned and 41 new franchise restaurant in FY 2008, the fastest growth of the company, in term of new shops opening, since its establishment 10 years ago.

In FY 2008, the company has adopted a more centralised approach to its store roll-out, marketing operation, management and product development. The new approach is called "Project Leader Sheep" which gives the company a more efficient and centralised approach to its day-to-day operation and also create a stronger support for its franchisee nationwide.

The company currently owns the largest Sheep abattoir in China. The self owned abattoir gives the company a comparative advantage in costs over its competitors, also giving the company a greater control on product quality and delivering lead time.

Apart from the rising profit in self owned restaurant operation, the company also benefits from their wholesaling operation. Currently the company distribute their products through most of the major supermarkets in China, including ParknShop and Carrefour.

The increasing number of middle class in China also creates opportunity for the company. Mr Wang stated that there is a trend that more and more of these white collar people prefer to have lunch in restaurants. Therefore, the company is looking to roll out a new lunch menu to capitalise and cater for this growing market.

About Little Sheep Group Limited

Little Sheep Group Limited (0968.hk) is a full-service restaurant chain operator in the People’s Republic of China. The Company specializes in Mongolian-style hot pot cuisine with a signature menu, which is characterized by the Company’s aromatic soup base and Mongolian lamb specialties. Its menu also offers a selection of appetizers, main dishes and desserts to complement its hot pot offerings. It also sells a range of fresh and dry food products, including lamb, soup base and seasoning products, to wholesale distributors for retail sales in hypermarkets, supermarkets and convenience stores. The Company owns and operates two lamb processing facilities in Inner Mongolia. As of Dec 31, 2008, it had 127 Company-owned and 248 franchise restaurants in the People’s Republic of China, as well as four Company-owned restaurants in the special administrative regions of Hong Kong and Macau.

The company was awarded No. 1 Food Service Provider Brand of 2007 in the PRC and Top 10 Most Influential Brands in the PRC by World Brand Laboratory.

 

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Little Sheep Group Limited