The planets are aligned. The “qi” is positive. The yin and yang are favourable. Short of a sudden reversal of fortune, the London stock market will welcome its first Chinese fortune-telling and feng shui consultancy this month.
New Trend Lifestyle Group intends to float on the junior market AIM, raising £1.5 million through a placing of shares at 8p — a number regarded as particularly lucky in China.
New Trend operates seven outlets in Singapore, selling consulting sessions to personal and corporate customers as well as products such as bracelets, ornaments, crystals and gem stones.
Customers pay upwards of £100 for a consulting session in which they can be advised on feng shui — the aligning of furniture and buildings — or have their fortunes told according to an astrological practice known as Zi Wei Dou Shu.
Astrology and feng shui are popular in China and territories with large Cantonese populations such as Hong Kong and Singagore, but the industry is typically offered by sole traders.
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Lawrence Cheung, the finance director, said: “We are the first to do a chain store. This industry is full of corner shops. We’re the first Sainsbury’s.”
The business is the brainchild of Phang Song Hua, a minor TV celebrity in Singapore who, according to the prospectus, is a “master” with 20 years’ experience in geomancy and feng shui. He founded the business in 2005, opening shops in train stations and shopping malls.
He has also started to test the water in mainland China, signing a licence agreement with a local business, which has opened six shops in the southern city of Guangzhou.
The fresh capital from the flotation, on June 28, will fund expansion. Mr Cheung, a former finance director of the Shanghai branch of the advertising agency J. Walter Thompson, believes that the business could spawn a social networking site. “Online communities are really crazy about this,” he said. By 2015, New Trend hopes to have 50 shops across China.
The company made pre-tax profits last year of $2.28 million (£1.15 million) on revenues of $11.97 million. It says that 70 per cent of turnover came from repeat business. As well as low-spending customers it claims bigger clients including Standard Chartered and Citibank. Of the new shares, £1 million-worth have been subscribed for by Asian investors, the company says. After the flotation, Mr Phang will own 60 per cent of shares, other senior management 20 per cent and outside investors 20 per cent. At the 8p issue price, the company will be valued at £7.5 million. The chairman is Robert Goddard, a former senior executive of Burmah Castrol, who is also chairman of AIM-listed Hardide and Universe Group.
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New Trend’s decision to float in London is in contrast to the traffic eastwards by Western companies attracted by the high valuations put on some companies. Mr Cheung said that London was chosen because the listing costs were much lower than in Singapore or Hong Kong and governance standards were higher.
The company is careful not to claim that feng shui works or that the company’s fortune tellers have any ability to predict the future. “I’m not superstitious myself,” Mr Cheung said.