President Chain to pump US$12.5 million into PRC

President Chain Store Corp (統一超商), operator of the nation's largest convenience store chain, yesterday announced plans to increase its investment in China, hoping to expand its retail business in the fast growing market.

The board of the President Chain yesterday approved an investment of 100 million yuan (US$12.5 million) to be used in opening supermarkets in Chengdu, Sichuan Province, according to a filing to the Taiwan Stock Exchange.

The company has not yet made a decision on the specific number of stores to be opened in Chengdu, said Lillian Lin (林立莉), a public relations manager.

The President Chain invested in a supermarket chain in Beijing in 2004, and opened a Unimart (統一優瑪特量販超市) outlet in Nanchong City, Sichuan Province, in November last year.

The board also approved a proposal to increase investment by US$333,000 in its Shanghai Starbucks coffee stores, another company filing said.

Earlier in the shareholder meeting, the board decided to assign a record high NT$3.4 cash dividend to its shareholders, after its marketing strategy of handing out Hello Kitty magnets and brooches struck the right note with consumers.

With its 4,037 7-Eleven stores at the end of last year, the President Chain reported sales of NT$93.7 billion and after-tax earnings of NT$3.65 billion, or NT$3.99 per share. The company saw its highest earnings in 2003, when the earnings-per-share reached NT$4.29.

"We think we can see sales hit the NT$100 billion mark this year," Hsu Chung-jen (徐重仁), head of the President Chain, told shareholders yesterday.

He said that the company planned to expand the number of 7-Eleven stores in the country to 4,300 by the end of the year.

The dilemma over consumer credit defaults did not have a significant impact on the the President Chain's operations, with sales growing 12 percent to NT$39.35 billion for the first five months of the year from the same period a year earlier.

Separately, Taiwan FamilyMart Co (全家便利商店), Taiwan's second-largest convenience store, yesterday approved the distribution of a NT$2.6 stock dividend, which includes a NT$2.2 cash dividend and a stock dividend of NT$0.4, at its annual shareholder meeting, the company said in a press release.

The chain reported revenues of NT$29.68 billion last year, growing by 8.46 percent from a year ago. Pre-tax profits for last year topped NT$890 million, rising by 5.75 percent year-on-year. Earnings per share were NT$3.28.

As of Dec. 31 last year, the chain ran 1,851 stores nationwide, or a net increase of 151 outlets from the previous year, the statement said.

additional reporting by Jackie Lin