HONG KONG, February 28, 2017 – Welkin Capital Management (“Welkin”), a leading mid-market growth equity firm in China, is pleased to announce that growth equity funds advised by it have invested RMB 120 million in Hunan Guitaitai Camellia Oil Technology Co., Ltd. (“Guitaitai” or “the Company”), China’s largest camellia oil specialty brand, to expand the Company’s production capacity, distribution channels and marketing programs.
Founded in 2008 by Chief Executive Officer Xuewen Xu and headquartered in Hunan, Guitaitai specializes in the production, distribution, sales and marketing of edible camellia oil to businesses and consumers under the Guitaitai brand. Its retail products are available across the nation at over 13,000 locations. The Company is listed on China’s National Equities Exchange and Quotation (“NEEQ”) in the Innovation Level under ticker “834352”.
Xuewen Xu, commented, “We are thrilled to be working in partnership with Welkin as we undergo our ambitious expansion plan in China. Welkin’s investment reflects the confidence it has in our brand, our competitive strengths and the potential of the camellia oil market. We will leverage Welkin’s financial support, its operating expertise and extensive networks in China, as we continue to grow our business and strengthen our reputation as the leading brand for camellia oil in China.”
Christopher Fong, Managing Director of Welkin, said, “Guitaitai has a leading market position in an industry with vast growth potential amid consumption upgrade in China and growing health awareness among consumers. We are excited to be a part of Guitaitai’s future growth .”
Guitaitai will issue 12 million shares at a price of RMB10 per share on NEEQ. The funds raised will be used for the construction of a new camellia oil production facility at Suining in Hunan province and to enhance the Company’s working capital. Upon completion of the share subscription, growth equity funds advised by Welkin will hold a 15% stake in Guitaitai. Jiang Pu, Principal at Welkin, will join Guitaitai’s board of directors.
Camellia oil is one of the healthiest forms of edible oil, with low saturated fat content, high unsaturated fat content and high nutrition value. Its high smoke point also makes it an ideal cooking oil for Chinese cuisine. Currently, camellia seed production in China’s southern provinces is expanding rapidly. China’s State Council published a Notice on the Development of Woody Oilseed Plants in December 2014 which aims to boost the production of oil from woody plants to 1.5 MMT by 2020 from the estimated 450,000 tons in 2013. It also plans to develop woody oilseed plants in 800 counties and increase planted areas to 13.3 MHa from the current 8 MHa. The significant increase in camellia seed production due to support from national and provincial governments has made camellia oil an affordable edible oil for middle class families in China.
Jiang Pu of Welkin said, “With Chinese consumers increasingly focused on health and quality consumer products, camellia oil is well-positioned for high growth and is quickly becoming a mainstream edible oil category. We believe that with support from Welkin, Guitaitai is well positioned to benefit from this trend, given its advanced oil processing technology, state-of-the-art manufacturing facility and solid financial position.”
Guitaitai primarily makes camellia oil using the cold press method, which helps to retain nutrients and flavor otherwise destroyed by heat in refined oil extraction, ensuring the highest quality in terms of nutritional value and food safety. Through actively expanding its customer base and market share, as well as improving brand recognition, Guitaitai recorded revenue of RMB312 million and net profit of RMB41.7 million for the six months ended 30 June 2016, representing a y-o-y growth of 63.56% and 112.62%, respectively. The Company’s total assets reached RMB493 million as at 30 June 2016 and grew by 44.6% as compared to the beginning of 2016.
Founded in 2009 by key members of four influential business families in Greater China, and led by Johnny Kong, Welkin seeks to invest in fast growing, mid-market companies in China and create substantial value by leveraging the deep networks, industry knowledge and operating expertise built by Welkin and its founding families. Welkin has built a successful track record of helping portfolio companies grow and become successful. Its previous investments include, but are not limited to, Juneyao Airlines and Precise Packaging, which are listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange, respectively.
About Guitaitai
Guitaitai is the largest camellia oil specialty brand in China. Founded in 2008 and headquartered in Hunan, the Company processes, manufactures, packages and markets edible camellia oil under the Guitaitai brand to consumer and businesses. Its popular retail products are available for sale at over 13,000 locations in China, including at retailers such as Suguo, Vanguard, Hypermart, Jiarunduo, Lotus, and 200+ retail chains. It is listed on NEEQ in the Innovation Level under ticker 834352. For additional information, please visit Guitaitai’s website at www.guitaitai.com.
About Welkin
Welkin is a China-focused mid-market growth equity investment firm with a distinguished family heritage and strong entrepreneurial roots. Founded in 2009, Welkin invests in niche-leading, growth stage companies in China on behalf of global institutional investors and the firm’s employees. Welkin deploys its local resources, industry knowledge, and operating expertise, to drive impactful value creation and help companies achieve their full growth potential. For more information, please visit www.welkincapital.com.
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