PE-backed Country Style Cooking, Tuhu file for HK listings

SIG Asia and Sequoia Capital China first invested in CSC in 2007 and took it public three years later. They then supported co-founders Hong Li and Xingqiang Zhang in a take-private that valued the business at approximately USD 140m. SIG and Sequoia remain the largest external shareholders, with 14.36% and 7.88%, respectively, according to a prospectus.

Established in 1996, CSC claims to be one of the largest Chinese quick service restaurant groups in the country, managing 1,145 self-operated outlets. There are 606 restaurants under the core CSC brand, which offers Sichuan dishes, and 543 under Rice Space, which is inspired by several provincial cuisines, including those of Hunan, Jiangsu, Zhejiang, and Guangdong.

CSC's footprint nearly doubled in size between 2019 and 2021, but the business was impacted by COVID-19 control measures in 2020. Revenue for the year reached CNY 3.16bn (USD 497m), down from CNY 3.26bn in 2019, while a net profit of CNY 82.7m became a net loss of CNY 2.42m.

Business rebounded in 2021, with revenue hitting CNY 3.42bn in the first nine months, up 56.4% year-on-year. Net profit was CNY 162.8m compared to a loss of CNY 13.8m for the same period in 2020. The revenue contribution from delivery rose from 26% in 2019 to 36% in 2020. Even with the return of dining in, it remains 34%.

Sequoia is also an investor in Tuhu, having co-led a USD 450m Series E round in 2018 alongside Tencent Holdings and The Carlyle Group. It also reportedly featured in a USD 300-400m round with Tencent and FountainVest Partners in early 2021 at a valuation of USD 3.8bn. Sequoia owns 5.49%, while Tencent, Carlyle, and FountainVest own 21.28%, 3.15%, and 5.98%, respectively.

The second-largest external investor with 9.85% is Joy Capital, which has been in Tuhu's cap table since 2015, AVCJ Research's records show. The company's other backers include Atom Ventures, Legend Capital, Qiming Venture Partners, Hillhouse Investment, Starquest Capital, CICC Capital, Baidu, Goldman Sachs, B Capital Group, Cathay Capital, ZWC Capital, and Fidelity.

Founded in 2011, Tuhu provides a platform through which car owners can identify offline after-sales services providers, using the website or mobile app to purchase goods or make appointments for tyre replacements, vehicle check-ups, and oil changes. As of September 2021, its network includes 3,300 own-brand workshops and 33,000 partner stores.

The company had 72.8m registered users, 13.9m transacting users over the prior 12 months, and 10m monthly active users. "By aggregating sporadic automotive service demands onto one platform, customer engagement is significantly increased as compared to the traditional offline automotive service model that is highly dependent on localised service demands," the prospectus said.

China Insights Consulting estimates that China's automotive service market – comprising auto repair and maintenance, car wash and detailing, and installation-required accessories – was worth CNY 1trn in 2020. It is expected to reach CNY 1.7trn by 2025.

Tuhu generated CNY 8.75bn in revenue in 2020, up from CNY 7.04bn the previous year. Its net loss widened from CNY 3.43bn to CNY 3.93bn. Revenue came to CNY 8.44bn in the first nine months of 2021, while the net loss was CNY 4.44bn.

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• Topics
• Greater China
• IPO
• Consumer
• Technology
• China
• TMT
• SIG
• Sequoia Capital
• Joy Capital
• The Carlyle Group
• Fountainvest Partners
• Tencent
• automobiles