Best Mart 360 shuns 'war zone' Hong Kong for mainland China in growth plan after protesters trash 75 of its 102 stores

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/business/companies/article/3039803/best-mart-360-flees-war-zone-hong-kong-mainland-china-after?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | December 4, 2019 1:45 PM SGT
Best Mart 360, which has had 75 of its 102 shops trashed or firebombed by hardcore protesters in the last six months, said it will expand to mainland China to reduce its reliance on the Hong Kong market and called on the government to launch an independent inquiry into the social unrest devastating the city.
The popular snack-shop chain is establishing a business entity to bring the expansion plan to fruition, with the first store in mainland China expected to open in the coming financial year.
"We are still studying the locations," Lin Tsz-fung, chairman and founder of the beleaguered food vendor, told the Post. He declined to elaborate.
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Lin said the company plans to open 15 to 20 stores in Macau in the next two years, in a separate interview with Bloomberg.
Best Mart's shares have dropped 41 per cent on the Hong Kong stock exchange in the past six months as anti-government protests gripped the city, erasing HK$1.1 billion of the company's market value. The broader Hang Seng Composite Index was little changed in that period. Lin expressed his frustration with the vandalism that has dogged his business and others perceived to have links with mainland China or an allegiance to Beijing.
"I've never seen anything like this. Hong Kong now feels unfamiliar to me. I don't know why Hong Kong has become like this, like a war zone," Lin said. "Now that we've reached this stage, I think the government should set up an independent inquiry to look into the whole issue and to give seven million Hongkongers an explanation.
"I do expect overall business [in the retail industry] to decline by double digits. You did not expect this to happen at all. It never crossed my mind. I still do not understand why. I am innocent."
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He said Best Mart 360 outlets had been attacked more than 180 times, something he described as a "very, very big blow".
Many shops and bank branches have been targeted by hardcore protesters who believe they have links to mainland China or pro-Beijing views.
Lin is from the eastern Chinese province of Fujian, and protesters accuse the business of having ties to "Fujian gangs" that attacked them during a clash in August. Some non-executive directors are also seen by the protesters as having pro-Beijing affiliations.
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Lin defended the Fujian people and denied ties to gangs.
"Hong Kong is home to 1.2 million Fujian people. For every six Hong Kong people, there's one Fujian person," Lin said. "You cannot just tie Fujian people and gangs together because of the clashes in North Point in August. I think that is very irresponsible."
Lin said he had not put any of his staff on unpaid leave, laid anyone off or cut their wages.
Best Mart 360 reported that net profit for the six months ended 30 September was down 6 per cent to HK$13.46 million (US$1.72 million) because of "the outburst of the social movement", though the full impact has not yet been fully reflected in the financial results.
In the six-month period, the group opened 14 new stores and closed five. It planned to open 76 stores in four years when it listed in January this year.
The share price of the company has halved since May 20. It slipped 0.9 per cent on Thursday after the interim results were announced.
At least 153 listed companies have issued profit warnings since October 29, with Hong Kong's economy widely expected to slump next year.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.