China F&B

EBITDA: RMB 55.5 million in 2016
Number of Employees: 5,303
Sales: RMB 985 million in 2016

China F&B operates two renowned international restaurant chains, Dairy Queen (DQ) and Papa John's Pizza (PPJ) in China, and is the world's largest franchisee of DQ and the largest franchisee of PPJ outside the United States.

Market trends and drivers

The Company was founded in 2003 and is today the largest ice cream restaurant chain and the second largest pizza restaurant chain in China.  As of 31 December 2014, China F&B had a network of 491 DQ outlets and 166 PPJ outlets.

Both the out-of-home ice cream market and pizza restaurant industry in China have grown rapidly in recent years. Such rapid growth is driven primarily by accelerating urbanization, development of lower tier cities, increase in disposable income, as well as inherent market growth from current low level of ice cream and pizza consumption in China compared to developed economies. Going forward, further development of low tier cities and their urbanization will create strong market potential.

Investment potential

The key reasons for EQT’s investment in China F&B were attractive market development and the company’s leading market position as the largest ice cream restaurant chain and the second largest pizza restaurant chain in China. The company has proven itself as a scalable business model with fast payback and proven track record. Additionally, it has a compelling and well-recognized customer value proposition in the mid-end customer segment as well as significant growth prospect fuelled by store footprint expansion and store productivity growth opportunities.