China’s newest billionaire made his fortune on greasy food and cold beers.
Xu Bingzhong, the CEO and Chairman of Helens International Holdings, the largest chain of bars in China, guided his company through a stellar Initial Public Offering on the Hong Kong Stock Exchange Friday.
The stock surged nearly 23 percent on its first trading day, making Xu’s 861 million shares in the company worth HK$20.9 billion, or about $2.7 billion.
Xu launched the first “Helen’s” bar in 2009, according to the company’s Chinese-language prospectus.
The Shenzhen-based $3.9 billion company has since grown to 528 directly-operated bars across China in addition to others operated by franchisees — and the company even has one location in Manhattan’s meatpacking district.
The company has seen rapid growth, opening 161 new locations since the end of March alone, according to company data.
Helens sells some of its own beers, fruit drinks and wines, as well as products manufactured by other companies.
It bills itself on its website as “an offline social platform for young people” and says that it features themes in its bars of “Southeast Asian and Chinese ethnic styles.”
But some of the company’s locations in areas like Beijing’s WuDaoKou district are best known for hosting rowdy nights that attract foreign students and Chinese millennials alike.
In 2020, the company made $11 million in profit off revenue of $127 million, up 37 percent from 2019 when it made $87.7 million in sales. 2020 sales were up a staggering 151 percent from 2018, when it did $17.8 million in revenue, according to its prospectus.
In the first three months of 2021, Helens profit swung to a loss of $10.1 million on $57.1 million in revenue.
The majority of Helens bars are in China’s second- and third-tier cities, according to the latest data available. The company has 296 and 165 bars in second- and third-tier cities, respectively, the company says, making up 87.4 percent of their bars.
Helens warned in its prospectus that it was forced to close as many as 161 bars last month as China grappled with a resurgence of COVID-19 cases, but the company said it doesn’t that will have a “material adverse effect” on the business.
It also hailed the Chinese government for taking “swift and effective counter measures to successfully control the COVID-19 recurrence.”