In a bid to expand its convenience store business, retail giant Suning has issued 450 million new shares at a valuation of USD 750 million (RMB 5.2 billion) in its Suning Smart Life subsidiary that operates the Suning Xiaodian convenience store brand.
The new shares are fully subscribed by three existing shareholders, namely Suning International, Great Matrix, and Great Momentum. The latter two companies are wholly owned by Zhang Kangyang, the son of Suning founder and controlling shareholder Zhang Jindong. They now control 55% and 10%, respectively, of Suning Smart Life. Suning International holding the remaining 35%.
The news was revealed in a company filing with the Shenzhen Stock Exchange.
This mirrors a move by Suning in October, in which the same three shareholders subscribed to a 250 million share issuance in Suning Smart Life worth USD 250 million dollars after Suning Smart Life acquired Suning Convenience Stores outright. The shareholder ratios of the three entities—Great Matrix, Great Momentum, and Suning International—remain the same as before.
The move to boost Suning’s convenience store business also comes as Bianlifeng, a rising star in the space, upped its registered capital from USD 100 million (RMB 691 million) to USD 150 million. Alibaba holds a nearly 20% stake in Suning, while Tencent is invested in Bianlifeng.
Last year, Suning said it planned to open at least 1,500 Suning Xiaodian stores after launching the first in Shanghai in January, followed by 3,000 in 2019, and 5,000 in 2020. The company was halfway to reaching its target in August 2018, with 878 stores opened at the time.
Editor: Nadine Freischlad
