Chinese Consortium invests $400m in CFG

chesterguy said:
To anyone who doubts the idea of being in with the President wont be good for business

Chinese demand for IPA up 1,600% after Xi Jinping visit
Greene King’s export team putting extra effort into building contacts with importers of British beer to China

Greene King is shipping 50,000 cases of India pale ale to China following a surge in demand after President Xi Jinping drank a pint of the beer with David Cameron on his state visit to the UK.

The Suffolk brewer said demand for IPA from China had increased by 1,600% after Xi’s visit to Greene King’s pub The Plough at Cadsden in October. He and Cameron drank beer and ate fish and chips at the pub, close to the prime minister’s Chequers country residence.

Beer importers in China reported a spike in demand for IPA after pictures of the pair appeared on social media. The Chinese Communist party liked the image because it is seeking to portray Xi as a man of the people.

Rooney Anand, Greene King’s chief executive, said the order boom coincided with Chinese new year in February. He said: “If the British prime minister chooses to drink IPA that’s normal but if the president of China chooses to drink a certain drink it attracts lots of interest. We’ve had a sixteen-fold increase in orders from China for IPA in the last few weeks and 50,000 cases are on a boat now to arrive in time for Chinese new year.”

Anand said his export team were putting extra effort into building contacts with importers of British beer to China, where the year of the monkey starts on 8 February. Greene King’s beers, which also include Abbot and Old Speckled Hen, mainly go to markets with a longer tradition of drinking British beer, he said. “I’m very hopeful that China will see the merits of English beer and IPA in the same way that they have about red wine.”

In its first half results, the brewer and operator of more than 3,000 pubs reported sales up 2% at its owned pubs and restaurants open a year or more. Pre-tax profit, excluding operations added through its purchase of 1,200 Spirit pubs, rose 5.9% to £87.5m in the 24 weeks to 18 October.

The first-half dividend increased 6.3% to 7.95p a share, and Greene King, based in Bury St Edmunds, increased its estimate for savings from the Spirit acquisition by £5m to £35m.

Greene King shares rose 8.5% to 925p in early trading on Wednesday, their highest since July 2007.

http://www.theguardian.com/business...nd-greene-king-ipa-up-1600-percent-xi-jinping
Click to expand...

And the Chinese will teach us you can only have 100% of something.
 
ColinLee said:
Little piece about the Chinese investment in football in general on the BBC website, although there's nothing new there. In fact they could have picked all of their facts from this thread: http://www.bbc.co.uk/news/business-35019718
Click to expand...

Here's a couple of links showing what's been happening locally here (does that look familiar?), unfortunately Dalian Aerbin finished in 3rd place so they are stuck in the lower league for another season, I was hoping that they would be promoted back to the top flight in time for CFG to be sniffing around...
I haven't been to the new stadium yet, the old one was only around 20 minutes away by bus, the new stadium is around 90 minutes by buses but that will improve when the new Metro line opens.

Needless to say, the Chinese do take football seriously, at least in this part of China.

Btw, the local Dalian TV (channel 4) shows City games live and it's free to air, the downside is being GMT +8 a lot of games are shown at 4AM.

http://www.psam.uk.com/introducing-chinas-1-5bn-dalian-sports-centre

http://footballtripper.com/dalian-aerbin-sports-center-stadium/
 
Dalian Blue said:
Here's a couple of links showing what's been happening locally here (does that look familiar?), unfortunately Dalian Aerbin finished in 3rd place so they are stuck in the lower league for another season, I was hoping that they would be promoted back to the top flight in time for CFG to be sniffing around...
I haven't been to the new stadium yet, the old one was only around 20 minutes away by bus, the new stadium is around 90 minutes by buses but that will improve when the new Metro line opens.

Needless to say, the Chinese do take football seriously, at least in this part of China.

Btw, the local Dalian TV (channel 4) shows City games live and it's free to air, the downside is being GMT +8 a lot of games are shown at 4AM.

http://www.psam.uk.com/introducing-chinas-1-5bn-dalian-sports-centre

http://footballtripper.com/dalian-aerbin-sports-center-stadium/
Click to expand...
'Bloody hell' was my first response to that lot, wow.
 
Clearly the major reason for this is the links it could create and the opportunity for both sides to benefit from the expertise each other has (China benefits from City's expertise in developing a football brand, City benefit from China's expertise in growing a business in their home market).

But it's also worth mentioning that the investment in itself is a canny one. It sounds a lot of money, and many people in this thread have asked how the investors hope to recoup their outlay based on annual profit that is far below this. But that misses the point. Investors don't invest in order to make their money back in a share of profits (dividends) - that's just a nice annual pay back. The whole point in this is that the Chinese investors believe they have invested at the bottom of the "value curve". In other words, as CFG's value grows, the investors investment grows. Whether or not they eventually cash this in at a much higher value remains to be seen, but it is certainly a canny way to kill three birds with one stone!
 
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