Restaurant operator Tai Tong Food & Beverage Group (TTFB, 瓦城泰統集團) is to step up expansion by the end of this year, a move that is expected to see its consolidated sales increase by a percentage in the high teens in the second half of the year compared with about 4 percent growth in the first half, KGI Securities Investment Advisory Co (凱基投顧) said on Wednesday.
TTFB operates six restaurant chains — Thai Town Cuisine (瓦城泰式料理), Very Thai Restaurant (非常泰), 1010 Hunan Cuisine (1010湘), Very Thai Noodles (大心新泰式麵食), Rice Bar (時時香) and Ten Ten Hunan Bistro (十食湘).
After opening two new stores in the first half, TTFB plans to launch 16 stores in Taiwan and four in China by the end of this year, boosting the numbers to 129 and 11 respectively.
The plans in Taiwan will focus on its flagship brand, Thai Town Cuisine, while Rice Bar outlets and a South Asian cuisine brand are expected to be introduced later this year, KGI analysts Liu Tse-en (劉昃恩) and Angus Chuang (莊政翰) said in a research note.
The analysts said the company's move in China is lagging behind market expectation.
“TTFB entered the Chinese market in 2013, but as of the end of the second quarter, the seven outlets in China contributed merely 6 percent to its total earnings,” they said.
“The company aims to increase brand awareness by accelerating store expansion in China in the second half, but in the face of a large but competitive market in China, we believe it would take time for the company to see a substantial contribution there,” they said.
In the first half, TTFB’s net profit increased 9.42 percent year-on-year to NT$189.53 million (US$6.16 million), with earnings per share of NT$8.14, driven by store launches and an improvement in operating margin, which increased 0.6 percentage points from a year earlier to 10.95 percent.
From January to last month, consolidated revenue grew 4.44 percent to NT$2.92 billion, company data showed.
Liu and Chuang said that TTFB’s guidance showed operating margin would stay between 10 and 12 percent from the second half to next year.
That, coupled with accelerated expansion, means EPS for this year could grow to NT$15.3, compared with NT$14.12 last year, they said.
TTFB shares closed unchanged at NT$236 in Taipei trading on Friday, down 0.42 percent from last week, but rising 2.61 percent this year.
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