China Resources Said to Weigh Sale of Beef Supplier Ng Fung HongZijing Wu
China Resources Enterprise Ltd., the state-backed retail and beer conglomerate, is evaluating options for its meat distribution unit in Hong Kong that could include a sale, said two people with knowledge of the matter.
China Resources may start a strategic review of the business as early as this year, said the people, who asked not to be identified because the information is private. The company took then Hong Kong-listed Ng Fung Hong Ltd. private in 2001 in a deal that valued it at HK$5.1 billion ($658 million).
Ng Fung Hong, started in 1951 in Hong Kong, handles all imports of live cattle from the mainland. The Hong Kong government said in May that it was considering requests to open the import market to competition, citing concerns that “frequent” price increases by Ng Fung Hong was hurting demand for fresh beef.
The company raised wholesale beef prices six times last year, the South China Morning Post reported in December.
Ng Fung Hong imported 23,194 head of cattle last year, according to a January article by the SCMP, which cited figures disclosed by the company. Ng Fung Hong’s gross profit fell 11 percent last year to HK$25 million, on sales of HK$396 million, the newspaper reported.
Vincent Tse, general manager of China Resources’ Strategic Planning and Investors Relations Department, said he was unaware of any potential sale of Ng Fung Hong.
When China Resources bought Ng Fung Hong in 2001, the company also operated businesses including supermarkets and beverages.