Initial Investment
08 7월 2008 - 3:58PM
UK Regulatory
RNS Number : 5385Y
Yangtze China Investment Limited
08 July 2008
Press Release 8 July 2008
Yangtze China Investment Limited
("Yangtze" or "the Company")
Initial Investment
Yangtze China Investment Limited (AIM:YCI.L), a provider of expansion capital to China-based enterprises, today announces that it has
completed its first investment following its admission to AIM.
The Company has invested US$5.0 million in Aesthetic International Holdings Group Ltd. ("Aesthetic"), the holding company for a beauty
spa franchise group based in Beijing, China with around 24 full-time employees. Aesthetic has issued to Yangtze a 15% convertible loan note
due 2011 representing, upon full conversion, a stake of approximately 25 per cent. of the equity share capital of Aesthetic on a fully
diluted basis. The terms of the investment provide Yangtze with the right to appoint up to 2 directors to the board of Aesthetic and certain
other investor rights in accordance with the Company's investment guidelines.
Aesthetic, a company incorporated in the British Virgin Islands, has been established to facilitate the investment by the Company and
the subsequent corporate restructuring of the group that will be implemented following completion. The business of the group is principally
the sale of beauty and skincare products and services, marketed under the brand names of 'Aesthetic' and 'O'rola'. These beauty and skincare
products are distributed in the Peoples Republic of China ("PRC") using a franchise beauty centre sales network.
To date, Aesthetic has developed a variety of product lines, totalling approximately 200 items. The business generates revenues
principally through the sale of its products, which are manufactured by two independent manufacturers. In addition to product sales,
Aesthetic also generates revenues through licensing and franchising fees resulting from the use of the brand names of 'Aesthetic' and
'O'rola' by franchisees. As at 31 May 2008, Aesthetic had, through its agent, 621 direct franchised beauty centres and 696 sub-franchised
beauty centres, totalling 1,317 shops throughout the PRC. Although the business is growing fast and is generating sales, it is still in its
infancy and profits are currently at break-even.
The funds invested will enable Aesthetic to complete the group's restructuring, raise the group's profile through increased marketing
and promotion of its brands and products, expand the research and development team, and fund the establishment of beauty training and
franchise management centres.
Strong economic growth and the rapid urbanisation of the PRC have resulted in a larger labour force earning higher wages which has
subsequently boosted the disposable income level of Chinese individuals. This rise in disposable income has directly led to an increase in
household expenditure, in particular retail consumption. The combination of rising income, the increasing proportion of women in the
workforce, changing attitudes to personal grooming and growing awareness of grooming trends are the fundamental drivers of China's cosmetics
and toiletry industry. According to Euromonitor International, a provider of business intelligence, China's cosmetics and toiletry industry
achieved RMB95 billion in retail sales in 2006. Skincare products and colour cosmetics account for the largest share of the PRC cosmetics
and toiletries industry with a 31 per cent. and 11 per cent. market share respectively.
Wilfred Wong, Chairman of Yangtze China Investment Limited, said: "At the time of Yangtze's admission to AIM we stated that we would
move quickly to invest the capital raised and this investment into Aesthetic marks the Group's ability to adhere to its strategic goals.
"In line with our investment strategy, Aesthetic is ideally placed to benefit from increasing disposable income in China. There is still
considerable growth in the Chinese cosmetics and toiletries industry and we are confident that Aesthetic will benefit from this ongoing
trend and will help generate positive returns for our shareholders."
- Ends -
For further information:
Yangtze China Investment Limited
Wilfred Wong Tel: +852 2867 9142
www.yangtzecn.com
Collins Stewart Europe Limited
Adrian Hadden / Oliver Quarmby Tel: +44 (0) 20 7523 8350
www.collinsstewart.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Chris Lane Tel: +44 (0) 20 7398 7708
chris.lane@abchurch-group.com www.abchurch-group.com
Notes to Editors
Yangtze China Investment Limited is a closed-ended investment company established to make minority equity and equity-related investments
in a portfolio of small and medium-sized growth businesses within, or associated with, the consumer sector in China. With a proprietary
deal flow, the Group focuses on unlisted companies whose business operations are based principally in mainland China. Yangtze will
typically seek to invest in companies that are revenue generating, ideally profitable or anticipated to generate profits in the near term
and which the Group believes have strong management teams and market leading potential.
Yangtze aims to capitalise on the growing disposable income in China, investing primarily in companies operating in a variety of
consumer sectors, including consumer related technology, media and advertising, entertainment, distribution and retailing of consumer goods
and services, and health good and services.
The Chinese economy has experienced a 9.97% average GDP growth over the past 14 years and recorded GDP growth of 11.4% in 2007.
Government reforms are transforming the economy, with a focus on domestic consumption, infrastructure spending and, now increasingly, upon
environmental issues.
For further information, please see www.yangtzecn.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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