Restaurant chain operator Wowprime Corp (王品) last week announced a venture plan to expand its operations in China, as the company moves cautiously amid the higher costs and tough business environment there.
The company, the nation’s largest restaurant chain with 11 brands such as Wang Steak (王品台塑牛排), Tasty (西堤) and Tokiya (陶板屋) across the Taiwan Strait, said on Wednesday it had decided to team up with Jollibee of the Philippines to establish a joint venture in China, that would operate the hotpot restaurant chain 12 Sabu (石二鍋) in China, Hong Kong and Macau.
In a statement sent to the Taiwan Stock Exchange, Wowprime said it and Jollibee would own a 48-percent stake each in the joint venture, with the remaining 4 percent share held by a third party with experience in developing channels in China.
This is the first time that Wowprime has decided to form a joint venture to expand its business reach.
Hot-Pot Market
The company said the joint venture would target the popular and low-priced hot pot market in China, aiming to open the first 12 Sabu store in Shanghai in the fourth quarter. In Taiwan, Wowprime runs 29 such stores.
Fubon Securities Investment Services Co (富邦投顧) analyst George Chu (朱家麟) praised Wowprime’s partnership with Jollibee, citing the latter’s established logistics system and mass-market pricing.
Jollibee is the largest restaurant chain operator in the Philippines, operating more than 2,500 stores around the world under a number of brands, including Jollibee, Chow King, Greenwich and Red Ribbon. In China, Jollibee operates 367 stores under three brands, namely Yonhe King (永和大王), Hong Zhuang Yuan (宏狀元) and San Pin Wan (三品王).
“Jollibee’s logistics will be a plus for the new 12 Sabu in China, as 12 Sabu’s high volume and low average selling price business model is incompatible with Wowprime’s existing logistics which serves 43 steak houses in China,” Chu said in a note on Thursday.
However, Wowprime has seemed to open stores at a slower-than-expected pace.
At the company’s Taiwan Stock Exchange share-listing ceremony on March 6, chairman Steve Day (戴勝益) said the firm aimed to add 65 new stores to the 244 in Taiwan and add 27 stores to the 71 in China by the end of this year. Currently, Wowprime has 210 stores in Taiwan, 46 in China and two stores in Thailand.
Slow Expansion
“The slow speed of expansion is much more conservative than Wowprime’s earlier outlook and is an indication of the higher costs and tough market in China,” Chu said.
“With the high costs of doing business in China, this slower expansion could avoid margin dilution and help the company’s bottom line in 2012, but will lead to less growth in 2013,” he said.
In the second quarter, Wowprime saw its net income narrow by 17.91 percent to NT$229.918 million (US$7.67 million), or earnings per share of NT$3.35, from NT$280.096 million, or NT$4.39 per share, in the first quarter, although the company still posted a 19 percent increase in first-half net income to NT$510.014 million, or NT$7.74 per share, from NT$428.194 million, or NT$7.13 per share, a year earlier, according to a stock exchange filing on Friday.
Revenue in the April-to-June period grew 1.47 percent quarter-on-quarter to NT$2.281 billion, rising 25 percent year-on-year, and revenue in the first six months increased 27.99 percent to NT$4.596 billion, the company’s filing showed.
Profit
This quarter, the company is expected to see profit increase by more than 20 percent sequentially and about 40 percent annually, thanks to higher profit contributions from its China operations, Chu forecast.
Fubon forecast the company’s net income to grow 43.9 percent to NT$1.11 billion this year, or NT$16.4 per share, and increase by a slower pace of 12.5 percent next year to NT$1.25 billion or NT$18.4 per share.
The company’s share price has risen 35.44 percent to NT$460.5 on Friday, since its March 6 debut with a listing price of NT$340.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”