Biscuit maker co-founded by former Miss Hong Kong applies for IPO, plans to expand to Canada and Taiwan

Cookies Quartet ranked second in Hong Kong in terms of revenue last year

PUBLISHED : Tuesday, 04 September, 2018, 1:50pm
UPDATED : Tuesday, 04 September, 2018, 1:50pm

Hong Kong biscuit producer Cookies Quartet, co-founded by a former Miss Hong Kong, has applied for an initial public offering in the city.

Co-founded by Miss Hong Kong 1985 Tse Ning, food and lifestyle writer Yuen Tung Kwan and pastry chef Yiu Man Wong in 2008, the company owns eight stores offering 30 flavours across Hong Kong. It manufactures all its products in San Po Kong, in northern Kowloon.

In a document submitted to Hong Kong Exchanges and Clearing on Monday evening, the company said it aimed to expand overseas and was already in agreement with two distributors to sell products in Canada and Taiwan. Expansion of online sales in China – where the company has been active since 2016 – through e-commerce platforms would also be an area of focus in the future.

In 2017, Cookies Quartet ranked second in terms of revenue out of the 32 biscuit retailers encompassing a total of 80 stores in Hong Kong, with its revenue of HK$80.7 million making up 13.6 per cent of the market, according to independent market research company Ipsos, which was commissioned by Cookies Quartet.

A top, unnamed, retailer had HK$206.9 million in revenue, a 34.8 per cent market share, while the top five retailers together accounted for 66 per cent of the market, according to Ipsos.

Cookies Quartet reported a profit of HK$24.7 million (US$3.14 million) for this year, HK$29.5 million in 2017 and HK$22.4 million in 2016. The company said in the document rising operational costs, including wages and rental prices, and an increase in selling and distribution expenses accounted for this year’s fall in profit. The industry’s relative dependence on a fluctuating tourism industry was also noted as a challenge.

According to Ipsos, Hong Kong’s biscuit retailer industry will rise over the next five years along with a constant growth in demand. The industry’s total sales value amounted to HK$593.6 million in 2017, which represents a 2.6 per cent compound annual growth rate over 2013-2017. This is forecast to grow from HK$635.8 million in 2018 to HK$725.5 million in 2022, a 3.4 per cent growth.

The industry is also expected to experience a year-on-year growth rate of 7.1 per cent in 2018, driven by tourism and local demand.

According to Hong Kong’s Census and Statistics Department, retail sales of bread, pastry, confectionery and biscuits recorded a 7.9 per cent growth in the first half of 2018, compared with the same period in 2017.

Cookies Quartet’s sole sponsor for the deal is Innovax Capital, a Hong Kong-based financial and securities services provider.