It doesn’t matter what time of the day it is McDonald’s Sai Kung is heaving. Customers are stuffing their faces with burgers and cheap meal packages. The cash registers never stop. Who’s pigging out on the profits? CITIC Capital and the Carlyle Group.
We’re talking truckloads of money. A light was shined on just how much dosh is generated by the burger business when McDonald’s Corp recently sold a shop in Yuen Long for HK$77.4 million. Businesses are usually valued by a multiple of annual profits — 6 to 10 times is common. Therefore we can extrapolate that the Yuen Long McDonald’s makes about $10 million a year. How much is McDonald’s Hong Kong worth: $20,405,000,000 if we assume the Yuen Long store is typical of the 265 others in Hong Kong.
Who are the fat-cat beneficiaries? CITIC is owned by China Investment Corporation, a sovereign wealth fund, state-owned CITIC Group and Qatar Holding. The largest shareholders in the Carlyle Group are founders Daniel D’Aniello 9.1%, William Conway Jr 8.4 per cent and David Rubenstein 8.2 % plus some high-profile funds such as BlackRock. If you watch Bloomberg TV you’ll have the “pleasure” of seeing pundit Rubenstein every day.
If you’ve got deep pockets* you may still be able to snap up a McDonald’s business or two. In July the group announced it wanted to sell eight of its Hong Kong retail properties. Telephone JLL, the former Jones Lang LaSalle which is handling the sale. The seven remaining McDonald’s up for sale are at Tsim Sha Tsui, Causeway Bay, Mongkok, Kennedy Town, Tai Kok Tsui, Tsuen Wan and Tsz Wan Shan.
McDonald’s Hong Kong has said four of the world’s five busiest stores are in the territory.
* One of every 388 households in Hong Kong has assets of US$30 million or more, according to an Altrata study published three months ago.
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