Taiwan FamilyMart Co (
The company, controlled by FamilyMart Co, Japan's third-largest convenience store operator, sold 10 million shares to investors at NT$25 apiece. About three-quarters of the shares were reserved for individual investors.
Taiwan FamilyMart, No. 2 in a market where 7-Eleven outlets outnumber its stores by more than two to one, is fighting for customers amid the first recession in the island's history.
"There's still some room for growth," Yeh Jung-ting, a company director, said in a phone interview. "If you look at Japan's example, there's one store for every 2,400 people. In Taiwan, there's about one store for every 3,400 people."
The company plans to add 144 stores to the 1,161 it is already operating in a nation of 23 million people. That number will rise to 1,600 by 2004, Yeh said.
Like President Chain, Taiwan FamilyMart has introduced ready-to-eat packaged food such as lunchboxes and sandwiches, catering to the eat-and-run crowd and delivering higher profit margins. It also increased its services to utilities bills payments.
Still, it's a tough battle. Family-Mart's 17 percent market share pales next to President Chain's 44 percent.
"FamilyMart may be No. 2 in Taiwan, but it lags far behind President Chain in terms of market share and competitiveness," said Bryan Chiang, who helps manage NT$1.8 billion of equities for Invesco Taiwan Ltd. "The market is becoming saturated, and we would have to see whether these companies have new developments."
Taiwan FamilyMart, which was founded in 1988 and has 1,400 employees, sold about 6.5 percent of its shares, which will trade on the over-the-counter exchange.
The shares were priced at 20 times estimated earnings for last year, compared with a multiple of about 24 for President Chain and an average current multiple of 19 for the 560 companies on the TAIEX Index.
"This will allow us to raise capital for future expansion and to give us a higher profile, which would help us attract potential franchisees," Yeh said.
National Securities Corp (
After the sale, Japan FamilyMart's stake dropped to 40 percent from 46 percent. A stake held by Japan's Itochu Corp fell to 7.4 percent from 8.4 percent.
Taiwan FamilyMart said it expects profit to rise to NT$260 million this year from unaudited net of NT$220 million last year.
Sales are forecast to climb 16 percent to NT$20.8 billion, Yeh said.
President Chain posted a one-third gain in profit last year, to NT$2.4 billion, on a 13 percent increase in sales to NT$64.8 billion. The company's shares rose 6.6 percent to close NT$65.
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