Luckin Coffee Scandal Derails Centurium Fund

Investors in Luckin Coffee are making a dash for the exits

An accounting scandal leads the way in Mingtiandi’s roundup of Asia real estate headlines today with the news that a mainland private equity firm that is a major backer of the coffee chain accused of faking its sales has put off plans to raise a $2.5 billion fund.

In other news around the region, a retail association in one Asian financial hub has predicted that 25 percent of shops in the city will close down this year as a result of the current health crisis, while a mainland conglomerate points the finger at its own finance department over a bungled investor meeting.

Elsewhere, the struggling co-working sector is said to be surviving better in Hong Kong than in Singapore.

Luckin Coffee Scandal Derails $2.5B Centurium Fund

The accounting mess at China’s Luckin Coffee has forced one of its top backers to put off its fundraising plans.

Centurium Capital, a three-year-old Chinese private equity firm that has a sizeable investment in Luckin, has put on hold plans to raise a second fund with a target size of $2.5 billion, according to people familiar with the matter. Its decision comes after the coffee chain’s revelation that employees fabricated much of its 2019 sales. Read more>>

25% of Hong Kong’s Shops Expected to Close Down by End of 2020

The Hong Kong Retail Management Association (HKRMA) said on Thursday that about 25 percent of retail stores in the Asian financial hub were expected to close by end of the year despite fresh government relief measures against the fallout from the coronavirus pandemic.

Some 2,000 stores are seen closing in the February-April period, with 3,200 shops expected to shut down in May, according to a survey by HKRMA, conducted before the government announced the new relief measures for smaller firms. Read more>>

ARA H-Trust Closes Two-Thirds of Hotels, Slashes Workforce

In response to the acceleration of the coronavirus pandemic, ARA US Hospitality Trust (ARA H-Trust) has turned to a series of measures including the temporary closures of about two-thirds of its hotels, slashing its workforce and pay cuts for senior managers.

The stapled group shut 15 hotels during the last week of March as well as 13 other hotels in the first week of April, due to their low occupancy rates, its managers said on Thursday night in an investor update. Read more>>

HNA Blames Finance Department for Mishandling Investor Meeting

HNA, which owns stakes in businesses from airlines to insurance, publicly criticised its own finance department for its handling of an investor meeting that prompted a suspension of stock market trading in the group’s debt.

An unsigned letter posted from one of the company’s verified Chinese social media accounts said HNA had raised “harsh criticism” of the head of finance and other related executives, without naming individuals. Read more>>

Mainland China Housing Market Showing Signs of Recovery

China’s housing market is seeing signs of slow recovery based on latest price data, and may see more significant growth in the next two months, particularly for larger cities, according to S&P Global.

Liu Xiaoliang, director of corporate ratings at S&P China, told CGTN that the firm estimates a 30 percent year-on-year drop in property sales in the first quarter for China, but is seeing signs of recovery based on price data. Read more>>

Poly Developments Posts 48% Net Profit for 2019

Major Chinese real estate developer Poly Developments and Holdings Group posted a 47.9 percent year-on-year net profit increase in 2019 following steady property sales growth.

The Guangzhou-based property developer said in its annual report that its net profit reached RMB 27.96 billion ($4 billion), or RMB 2.35 per share, last year. Read more>>

Co-Working Doing Better in Hong Kong than in Singapore

On a recent Friday afternoon, dozens of people sat hunched over laptops at TheDesk’s six-story co-working space near Hong Kong’s Central business district, while others chatted over snacks at tables on the outdoor terrace – all of them ignoring government advice to work from home to stop the spread of coronavirus.

Whether escaping tiny apartments that aren’t conducive to work, or less concerned by a virus that has infected around 1,000 residents compared to more than 110,000 New Yorkers, the surprise result is co-working providers are thriving in Hong Kong, even as much of the world remains in lockdown. Read more>>

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