Pacific Coffee, which introduced the coffee shop concept to Hong Kong, said each new store would require an investment of HK$1 million to HK$3 million and be expected to produce a return on investment after a year to 18 months.

CiTL, a computer trading company, purchased the coffee chain for HK$205 million in April in response to revenue deterioration in some of its other businesses. Pacific Coffee, which sells about 12,000 cups of coffee in Hong Kong each day, now generates revenue of about HK$160 million per year, of which 90 percent from its retail operations.

On the mainland, Pacific Coffee will target big cities like Shanghai and Beijing.

It plans to open dozens of stores in China within the next five years, pushing the total number of its shops in Asia to over 100.

Pacific Coffee is now operating a total of 39 outlets in Hong Kong and five in Singapore. Its main rival, Seattle-based Starbucks, has 50 stores in Hong Kong and 120 in the mainland.

CiTL executive director Oscar Chow said Monday that Pacific Coffee had not yet decided whether to adopt a franchise, wholly owned or joint venture business model in the mainland.

Chow said the company would continue to monitor the specialty coffee business in other parts of Asia Pacific, including Macau. Starbucks said it planned to expand at the rate of 10 cafes a year in Hong Kong, but Chow said the size of the coffee drinking population would continue to grow, making market saturation unlikely.

Though Pacific Coffee may decide to quicken its pace of expansion, its goal is not to outstrip Starbucks in store numbers, he said.

Meanwhile, CiTL said it expects its information technology revenue to be about HK$600 million this year, steady with last year. It said it has no plans to sell, reorganize or spin off any part of the company.

Following the Pacific Coffee acquisition, CiTL has over HK$100 million cash on hand.

It will continue to look for investment opportunities in the food and beverage industry, Chow said.

grace.lam@singtaonewscorp.com