Oceanus to Buy 2 Companies, Spin Off Restaurant Unit

Jan. 11 (Bloomberg) -- Oceanus Group Ltd., the world’s largest operator of abalone farms, plans to buy two companies this year to expand its food business and sell shares of its restaurant unit as early as 2012.

Oceanus may buy a Taiwan food-packager by mid-2010 and an Australian company later in the year to boost its supply of wild abalones, Chairman Ng Cher Yew said. Ah Yat Tian Xia, its chain of restaurants, will sell shares in Taiwan or Hong Kong, he said. Oceanus stock rose by the daily limit in Taipei.

The company is expanding to ride on China’s growing consumer market as the central bank estimates the economy will grow 9 percent this year.
Oceanus became the first foreign company to list shares in Taiwan last year as ties between the island and the mainland reached their warmest since the two were separated after a civil war six decades ago.

“We want to see how we can basically acquire at least one Taiwanese packaging and processing entity and look at the Chinese market,” Ng, 50, said in a Jan. 8 interview in Taipei. The Taiwan listing “gives us a better profile with the government and an image in the market that will help the business.”

The company is based in Singapore, while its operations are mainly in China, where 137.9 million abalones are grown in 24,000 tanks along the country’s southern coast.

Stock Surges

Oceanus stock surged by the 7 percent daily limit to NT$12.30 at the close of Taipei trading, increasing the advance to 29 percent since the Taiwan depositary receipts were sold at NT$9.5 apiece in December. The benchmark Taiex index has added 2.6 percent since then. The shares in Singapore are unchanged today, and 7.7 percent since the Taipei listing on Dec. 31.

“The proposed acquisition would help the company save costs and increase profit,” said Monika Yang, who helps oversee $2 billion at Hamon Asset Management Ltd. in Hong Kong. “Investors probably heard about the listing plan and are positive about it.”

Oceanus has 20 restaurants in markets including Singapore and China, according to Ah Yat’s Web site. The company aims to increase the number to 170 next year, with at least 120 on the mainland, Ng said.

The restaurant business may be worth as much as 2 billion yuan ($293 million) in two years, said Jeffrey Lau, an analyst at Polaris Capital (Asia) Ltd. in Hong Kong.

“It will be positive for Oceanus, as investors are in favor of Chinese catering companies,” Lau said.

Oceanus is considering the listing in Hong Kong or Taiwan because of demand for abalones from consumers in the two markets, Ng said. The restaurant chain may become profitable by the end of the year, said Ng, declining to give details.

“The restaurant has a different risk profile, so eventually if it’s independent, it makes more sense,” Ng said.

To contact the reporter on this story: Weiyi Lim in Taipei at Wlim26@bloomberg.net

Last Updated: January 11, 2010 04:46 EST