Club Cubic operator goes into restaurant business

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A subsidiary of Luk Hing Entertainment Group Holdings, operator of Club Cubic in the MSAR, has entered into a joint venture for the operation of a Chinese restaurant and bar located in Harbour City, in Kowloon district of Hong Kong, according to a filing with the Hong Kong Stock Exchange.
The venue of the restaurant and bar will be rented.
The subsidiary of the company, L&B Betula, will invest HK$17.75 million of the aggregate HK$25 million total invested in the joint venture – holding 71 per cent of the joint venture. The other investors in the project are Brilliant Hero and Guangdong Weikedor, holding 20 per cent and 9 per cent ownership, respectively.
Given its entry into the business segment, the group notes that it ‘incurred and expects to continue to incur substantial start-up and pre-opening costs, including but not limited to additional staff costs, rentals, commission and professional fees, as well as promotion expenses’.
The group expects an ‘adverse impact’ on its 2017 results, noting that as a result of the venture ‘the operating expenses increased and are expected to continue to increase significantly in 2017’.