• Helens International (Helen’s), one of the largest bar chain networks in the PRC known for its own branded alcoholic products and unique customer experience, has made its debut in Singapore through a secondary listing under the stock code “HLS”. Helen’s has more than 500 outlets including self-operated bars and franchise operations, and has 3 outlets in Singapore.
   
• Helen’s intends on further expansion, especially into untapped markets through their Franchised Cooperation Model. They plan to achieve this through collaboration with their franchisees and partners, which they believe will allow them to rapidly expand their bar network and strengthen their market position.
   
• Despite the decrease in revenue over the years, Helen’s recorded an adjusted net profit of RMB280.2 million in 2023, with an adjusted net profit margin of 23.3%.
   
• Including the listing of Helens International, SGX now lists 16 Restaurants-related Plays with a total market capitalisation of approximately S$1.5 billion.
   

Market leader in China’s bar industry with over 500 outlets

Helens International Holdings Company Limited (Helen’s) – one of China’s largest bar chain networks – made its debut on the SGX Mainboard through a secondary listing. Helen’s has over 500 bars in their network (including franchised bars) as of 19 Mar 2024, with 3 franchised locations operating in Singapore.

With over 15 years of experience, the Helen’s network of outlets spans over 200 cities within and outside of China. Helen’s aims to satisfy the young generation’s demand for affordable alcoholic drinks, quality service and social ambience. As of noon on 19 July 2024, the company has a market capitalisation of S$461.9 million and has been listed in Hong Kong since 10 September 2021. 
 

Overview & Prospects of the Bar Industry

• Rising Disposable Income: The People’s Republic of China (PRC) has seen a rapid increase in consumer spending and per capita disposable income. From 2022 to 2023, PRC’s per capita disposable income saw a nominal rise of 6.3%, with a real increase of 6.1% after deducting price factors. The growing disposable income is expected to be beneficial towards the growth in bar spendings.
• Development of the Nighttime Economy: This has created an opportunity for the bar industry in the PRC. Certain local provincial governments have also been directly involved in promoting and encouraging this sector’s development through new measures that promote night dining, night shopping, and night tours to promote economic development. When combined with strong travel demand following the reopening of domestic travel in the PRC, the nighttime economy is expected to be further boosted and drive the bar industry.
• Growing market size: The total market size of the PRC bar industry in 2023 is estimated at RMB 148.8 billion, having grown 6.7% year-on-year.
   

Helen’s Revenue Breakdown by Segments

• Helen’s key products include
  • Helen’s branded products: Primarily consists of Helen’s beers and spirituous drinks that are offered in both our self-operated bars, our franchised bars and our “HiBeer Partnership” bars.
  • Third-party brand alcoholic drinks: Well-known brands including Budweiser, Corona, 1664 and Heineken.
     

Highlights from Introductory Document 

1. Competitive Strengths

• Premium quality and value for money product portfolio, with significant pricing advantages over similar products in the market.
• Highly standardised business model: Optimised product portfolio, integrated bar operations, efficient bar management systems and systemised training for store managers.
• Unique style of consumer experience: Decoration style, comprehensive bar events, cordial and efficient service.
• Operational efficiency powered by digitalisation and technological innovation through the use of digital technology and a centralised music management system.
• Led by experienced, professional, and enterprising management team.

2. Business Strategies & Future Plans

• Continue to expand bar network in existing, new, and untapped markets. Majority of Helen’s revenue (99.3% of FY23 revenues) is from the PRC.
• Further enhance awareness of Helen’s brand through bar expansion plans in regions with high concentrations of young customers or in regions identified through expectations and feedback of loyal customers.
• Strengthen the management of Helen’s supply chain and further expand the pool of bar management talent to support the rapid expansion of Helen’s bar network.
• Broaden marketing channels and increase outreach to target customers, utilising the influence of emerging social media and private domain traffic to implement targeted advertising on the popular social platforms of the youth.

3. Key Risk Factors (Refer to page 40 of the Introductory Document for a complete list of Risk Factors)

• Helen’s relies on a stable and sufficient supply of quality raw material, which could be affected by price fluctuations and other risks.
• Reliance on Helen’s branded products to generate a significant portion of revenue contribution.
• Counterfeit brands or products and their quality issues may significantly damage Helen’s reputation and brand image, diverting potential customers.
• Helen’s is dependent largely on the awareness of their brands, and any failure to maintain or enhance them could adversely and materially affect Helen’s business.

4. Financials

• Helen’s FY23 total revenue stood at RMB1.21 billion, down 22.5% from RMB1.56 billion in FY22, primarily due to a reduction in the number of self-operated bars (255 bars in end 2023 vs 653 bars in end 2022) and a strategic transformation of the Company towards a platform-based company by implementing an asset-light model.
• Despite the decrease in revenue over the years, Helen’s recorded an adjusted net profit of RMB280.2 million in 2023, with an adjusted net profit margin of 23.3%.

• 99.3% of Helen’s revenues are generated from the PRC, although revenue generated outside the PRC has increased steadily from 0.1% in FY21 to 0.7% in FY23.
• Helen’s branded products’ contribution to revenues has decreased from 78.0% in FY21 to 71.1% in FY23. However, revenue from franchising cooperation service has increased from negligible to 5.9% in FY23.
• In FY23, total dividends declared is approximately RMB545.9 million. The Board will review the dividend policy as appropriate from time to time, and there is no assurance that dividends will be paid in any particular amount for any given period.
   

Restaurants-related Plays on the SGX

After the listing of Helen’s, SGX now lists 16 Restaurants-related plays with a total market capitalisation of approximately S$1.5 billion. Here are the top 5 by market cap:

Source: SGX, Refinitiv, Bloomberg (data as of 12pm, 19 July 2024).

• Helens International Holdings Company Limited operates bar chain networks, selling its own craft beer, fruit beer, milk beer, and others.
• Kimly Limited operates and manages coffee shops and food courts. The company offers prepared foods and drinks for on-premises consumption, and only operates in Singapore.
• Jumbo Group Ltd is a seafood restaurant group offering multiple dining concepts catering to all types of consumers. The company offers restaurants in Singapore, China and Japan.
• RE&S Holdings Limited offers multi-brand dining concepts catering to different types of consumers. The company provides customers with Japanese cuisine and dining experiences in Singapore and Malaysia.
• ABR Holdings Limited manufactures ice cream and operates Swensen’s ice cream parlors and restaurants and other specialty restaurants. The company also manufactures and sells confectionary and pastry products, operates pubs, discotheques, and restaurants.
   

Additional Information from the Introductory Document

Overview of Helens International

Helen’s was established in 2009 by Mr. Xu Bingzhong, it’s Chairman and CEO to date. In 2018, Helen’s started launching its own alcoholic drinks, such as their now-iconic Milk Beer, fruit-flavoured beers and craft beers. As of 31 December 2023, Helen’s operates 255 self-operated bars, down from a peak of 782 self-operated bars as of 31 December 2021. The initial decline from FY2021 to FY2022 was due to the Covid-19 pandemic, and the further decline from end FY2022 to 19 March 2024 is largely due to the unfavourable economic conditions and weakening of consumers purchasing power. Today, Helen’s is transitioning to a franchisee operating model and as of 19 Mar 2024, Helen’s has a total of 84 franchised bars and 183 “HiBeer Partnership” bars in the PRC.
 

Shareholding Information

As at the latest practicable date (17 Jun 2024), the percentage of shareholding in Helen’s is:

• 68.04% held by Chairman and CEO Mr. Xu Bingzhong
• 0.68% held by Executive Director & Human Resources Director Ms. Cai Wenjun
• 0.09% held by Executive Director & Chief Financial Officer Ms. Yu Zhen
• 0.01% held by Executive Director & Director of Legal Inspection and Audit Mr. He Daqing
• 31.18% held by other shareholders
   

Did you know?

Helen’s has 3 self-operated bars in Singapore, with their first outlet opening at Orchard Central back on 18 May 2023. Aside from the usual brands of alcohol, Helen’s also offers up their own brand of drinks that have been a focal point of attraction. These include their own Craft and Draft Beer, Milk Beer, Whiskey Coke Bucket and more.

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