The Tai Tong Food & Beverage Group (瓦城泰統集團), the operator of three restaurant chains with 40 outlets, yesterday saw its shares rally 15 percent on its debut on the GRETAI Securities Market.
The stock closed at NT$253, climbing NT$33 from its listing price of NT$220 and outperforming the GRETAI’s 0.16 percent rise and the tourism sub-index’s 0.03 percent drop, stock exchange data showed.
The stock, which used to trade on the smaller Emerging Stock Market — a preparatory board for Taiwan’s two main bourses — issued 2.81 million new shares for its listing on the GRETAI Securities Market and raised about NT$617.16 million (US$20.99 million).
“The company will continue its expansion plan to maintain its profitability after listing [on the GRETAI Securities Market],” group chairman Charles Hsu (徐承義) told a press conference yesterday.
Tai Tong operates three restaurant chains specializing in Asian cuisine: Thai Town Cuisine (瓦城泰式料理), Very Thai Restaurant (非常泰) and 1010 Hunan Cuisine (1010湘辣料理).
The company is to set up its fourth cuisine chain — Chinese — in the first quarter of next year, Hsu said.
The group is also scheduled to launch its first Thai Town Cuisine outlet in China in the first half of next year, marking the company’s first venture into an overseas market, Hsu added.
He said the group plans to boost its number of outlets to 70 by the end of next year, with a longer-term aim of transforming the group into a global food-and-beverage giant with 100 outlets by 2014.
Fubon Securities Investment Services Co (富邦投顧) analyst George Chu (朱家麟) said the group had found the right strategy by setting up outlets in department stores.
Out of its current 40 outlets, 29 are located inside department stores, with 11 ranking among the top-grossing restaurants and 17 among the top-three restaurants in these department stores, Chu said in a research report.
However, Tai Tong’s gross margins could come under pressure from higher food and labor costs, Chu said.
Tai Tong posted a gross margin of 52.05 percent in the first half of this year, down 3.49 percentage points from a year earlier, the company’s financial statement showed.
However, the group said it expected its gross margin to return to the 54 to 55 percent level in the second half of this year after it started downsizing its staff in the past few months.
Tai Tong posted a first-half profit of NT$86.51 million, or NT$4.87 a share, up 8 percent from a year earlier, company data showed.