Investment Rating - The report does not provide a specific investment rating for the company [1] Core Insights - The company is implementing a multi-brand strategy to drive revenue growth and diversify dining experiences in response to changing consumer patterns in Hong Kong [2][4] - The current valuation reflects a 50% discount compared to peers, indicating that past earnings declines are already priced in [4] - The company has no bank loans and holds cash of HKD 1.35 billion, which is higher than its market capitalization of HKD 1.091 billion [4] Financial Performance - For the first half of the 2025 fiscal year, revenue increased by 1.2% year-on-year to HKD 1.4 billion, while same-store sales declined by approximately 4% [4] - The company reported a 55.8% year-on-year decrease in net profit attributable to shareholders, amounting to HKD 36.068 million [4] - The company’s restaurant network in Hong Kong increased by nine locations, totaling 198 self-operated restaurants [4] Business Operations - The company operates two flagship brands, "Tan Zai" and "San Ge," with a total of 235 restaurants across Hong Kong, mainland China, Singapore, and Japan [2][5] - The company is expanding its overseas operations through franchising to mitigate investment risks, with plans to open new locations in Australia and Malaysia [4] - The company aims to open four new restaurants under the "Marugame Seimen" and "Yam牛" brands in Hong Kong in the second half of the 2025 fiscal year [4] Valuation Metrics - The company’s price-to-earnings ratio for the 2024 fiscal year is projected at 9 times, with a dividend payout ratio target of 30% [4][5] - The dividend yield is currently at 11%, with a historical payout ratio of 100% over the past two fiscal years [4][5]

Financial Performance - Revenue for the first half of 2024 reached HK$1,403,524, representing a 1.2% increase from HK$1,387,369 in the first half of 2023[12]. - Profit for the period decreased to HK$36,068, down 55.8% from HK$81,629 in the same period last year[12]. - Profit margin for the first half of 2024 was 2.6%, a decline from 5.9% in the first half of 2023[12]. - Basic earnings per share for the first half of 2024 were HK 2.7 cents, compared to HK 6.1 cents in the first half of 2023[12]. - Revenue for the six months ended 30 September 2024 reached HK$1,403.5 million, with a profit of HK$36.1 million, reflecting modest growth despite challenging market conditions[15]. - The Group recorded a profit for the period of HK$36.1 million in 1H2025, down from HK$81.6 million in 1H2024[24]. - Operating profit decreased by 16.4% from HK$257.0 million in 1H2024 to HK$214.8 million in 1H2025, with an operating profit margin decline from 18.5% to 15.3%[81]. - The Group's overall operating profit margin for restaurant operations was 15.3%, down from 18.5% in the previous period[81]. Revenue Sources - The Hong Kong market accounted for 93.9% of the Group's total revenue during the reporting period, despite challenges from a sluggish economy and weak consumer sentiment[24]. - Revenue from restaurant operations in Hong Kong rose modestly by 1.7% year on year to HK$1,318.1 million in 1H2025, demonstrating the Group's agility and resilience[26]. - Revenue from markets outside of Hong Kong was HK$85.4 million in 1H2025, down from HK$91.3 million in 1H2024, with a widened loss[24]. - Revenue from Hong Kong operations increased by 1.7% to HK$1,318.1 million, while revenue from Mainland China and overseas markets decreased by 7.2% to HK$84.7 million[92]. - Revenue from external customers and a joint venture for the six months ended 30 September 2024 was $1,403,524,000, an increase from $1,387,369,000 in the same period of 2023, representing a growth of approximately 1%[199]. Restaurant Operations - The number of restaurants increased to 222 in the first half of 2024, up from 208 in the first half of 2023[7]. - The restaurant network expanded to 235 outlets as of 30 September 2024, demonstrating growth in the company's operational footprint[15]. - The total number of self-operated restaurants reached 198 as of 30 September 2024, following nine net openings during the reporting period[27]. - The Group plans to open five new stores under the "TamJai" and "SamGor" brands in Hong Kong in the second half of FY2025, bringing the total to over 200 restaurants[49]. - The Group plans to open four new restaurants under the "Marugame Seimen" and "Yakiniku Yamagyu" brands in Hong Kong in the second half of FY2025[52]. Cost Management - The cost-to-revenue ratio for food and beverages consumed was relatively stable at 24.0% in 1H2025, compared to 23.6% in 1H2024[24]. - The staff cost-to-revenue ratio increased slightly to 32.8% in 1H2025 from 31.5% in 1H2024[24]. - Handling charges increased by 67.3% compared to the previous year, reflecting a rise in delivery order volume[81]. - The Group implemented enhanced procurement strategies to stabilize food costs amid inflationary pressures in the global supply chain[24]. - The Group will implement rigorous cost control measures to enhance efficiency and optimize costs across all markets[70]. Expansion Plans - The company plans to continue expanding its restaurant network in both Hong Kong and Mainland China[14]. - The company plans to open its first franchise store in Melbourne, Australia in late November 2024, with two additional stores expected in the second half of FY2025, marking a significant milestone in overseas expansion[18]. - The Group has established a strategic partnership with Hextar Retail Berhad in Malaysia, with the first restaurant expected to open in Kuala Lumpur in 2025, marking a significant step in Southeast Asian market expansion[59]. - Franchise arrangements in the Philippines are progressing well, with the first franchise set to debut in 2025, expected to enhance overall profitability[61]. - The Group aims to optimize operations in Japan by expanding the restaurant network and enhancing brand recognition, while consolidating operations in Mainland China and Singapore to improve performance and accelerate breakeven[62]. Employee and Training Initiatives - As of September 30, 2024, the company had 3,522 employees, with remuneration packages including basic salary, discretionary bonuses, and equity settled share-based payments[154]. - Employee remuneration is based on work experience, qualifications, and market salary levels, with bonuses linked to financial performance and mystery shopper scores[154]. - The company provided training for frontline restaurant staff in operational procedures, customer service, food safety, and sanitation[154]. - Management staff received on-the-job training in cost control, complaints handling, and environmental, social, and governance issues[154]. Sustainability and Community Engagement - The Group's sustainability initiatives include launching a reusable cutlery set and educating staff on sustainability through creative video content[41]. - The Group awarded approximately HK$1.5 million in scholarships to 41 employees' children to support their local university education in 1H2025[48]. Financial Position - Non-current assets as of September 30, 2024, were HK$1,108,385, a slight decrease of 0.7% from HK$1,116,291 as of March 31, 2024[12]. - Current assets decreased by 1.2% to HK$1,487,804 from HK$1,506,633 as of March 31, 2024[12]. - Current liabilities remained relatively stable, decreasing by 0.1% to HK$645,771 from HK$646,278 as of March 31, 2024[12]. - Net assets as of September 30, 2024, were HK$1,445,241, down from HK$1,485,501[171]. - Cash and cash equivalents as at 30 September 2024 were HK$1,345.8 million, slightly down from HK$1,351.5 million as at 31 March 2024[141].

Financial Performance - The group's revenue increased by 1.2% to HKD 1,403.5 million for the six months ended September 30, 2024[2]. - Profit for the first half of 2025 was HKD 36.1 million, a decrease of 55.8% compared to HKD 81.6 million in the same period last year[4]. - Total revenue for the first half of fiscal year 2025 reached HKD 1,403.5 million, a slight increase from HKD 1,387.4 million in the same period of fiscal year 2024[12]. - The operating profit for the six months ended September 30, 2024, was HKD 61.7 million, a decrease of 45.0% from HKD 112.6 million in the previous year[74]. - The net profit for the period was HKD 36.1 million, down from HKD 81.6 million in the same period last year, representing a decline of 55.7%[75]. - Basic earnings per share for the six months ended September 30, 2024, were 2.7 cents, compared to 6.1 cents for the same period in 2023[74]. Operational Developments - The company plans to open three new stores in Australia in the second half of 2025 and expand into Malaysia through new franchise agreements[2]. - The total number of restaurants expanded to 235 as of September 30, 2024[7]. - The company successfully opened nine new restaurants, bringing the total number of self-operated restaurants to 198 as of September 30, 2024[15]. - The company plans to open five new stores under its flagship brands "Tam Jai" and "Sam Go" in Hong Kong by the second half of the 2025 fiscal year, aiming to exceed 200 total stores[24]. - The company is actively developing its franchise arrangements in the Philippines, with the first franchise store planned to open in 2025, contributing to future profitability[28]. - The company plans to strategically reduce its restaurant network in Singapore to improve overall profitability, despite potential one-time costs from closing locations[21]. Market Performance - The Hong Kong market contributed 93.9% of total revenue, despite facing challenges from economic downturns and increased competition[13]. - The company recorded a 22.0% year-on-year increase in comparable restaurant revenue in Japan, attributed to successful local food offerings and effective marketing strategies[22]. - Revenue from restaurant operations increased by 1.1% from HKD 1,387.4 million in the first half of 2024 to HKD 1,402.8 million in the first half of 2025, primarily due to an increase in the number of operating restaurants[37]. - Revenue from Hong Kong restaurants was HKD 1,318.1 million, a 1.7% increase from HKD 1,296.1 million in the previous year[36]. Cost and Expenses - The food and beverage cost ratio remained stable at 24.0% for the first half of fiscal year 2025, compared to 23.6% in the same period of fiscal year 2024[14]. - Employee cost ratio slightly increased to 32.8% in the first half of fiscal year 2025, up from 31.5% in the same period of fiscal year 2024[14]. - The cost of goods sold for food and beverages increased by 2.7% to HKD 336,621 thousand compared to HKD 327,793 thousand in the previous period[32]. - The group reported a significant increase in delivery fees by 67.3%, amounting to HKD 75,615 thousand, reflecting the rising costs associated with delivery services[32]. - Other expenses increased by 18.8% from HKD 38.6 million in H1 2024 to HKD 45.9 million in H1 2025, primarily due to an increase in the number of restaurants and higher impairment provisions for underperforming restaurants[52]. Strategic Initiatives - The company is investing in digital transformation, including the development of a new POS system and CRM system, expected to launch before the end of fiscal year 2025[10]. - The introduction of the Japanese beef rice brand "Yamagyu" in Hong Kong has received positive customer feedback and contributed to business performance[15]. - The company aims to enhance its corporate culture by introducing new concepts and values, focusing on employee engagement and performance management[10]. - The company is committed to sustainable development through its ESG initiatives, focusing on community enrichment and environmental advocacy[10]. Dividend and Shareholder Information - The interim dividend declared is HKD 0.0135 per share, with a payout ratio of 50.0%[2]. - The company declared an interim dividend of HKD 0.0135 per share for the six months ended September 30, 2024, compared to HKD 0.030 per share for the same period in 2023[92]. Financial Position - Non-current assets decreased by 0.7% to HKD 1,108.4 million compared to HKD 1,116.3 million in the previous year[4]. - The return on equity decreased to 4.9% from 7.8% in the previous year[4]. - Current assets totaled HKD 1,487.8 million, down from HKD 1,506.6 million as of March 31, 2024[76]. - The net asset value decreased to 1,445,241 thousand HKD from 1,485,501 thousand HKD, indicating a decline of about 2.7%[78]. - The company’s total liabilities include lease liabilities of 438,661 thousand HKD as of September 30, 2024, compared to 425,622 thousand HKD as of March 31, 2024, marking an increase of approximately 5.4%[78]. Governance and Compliance - The company has maintained high levels of corporate governance to protect shareholder interests and enhance corporate value[102]. - The audit committee consists of three independent non-executive directors, ensuring compliance with financial reporting and internal controls[107]. - The financial report was prepared in accordance with the Hong Kong Financial Reporting Standards and has been reviewed by an independent auditor[80].

Financial Performance - The profit for the year, excluding government subsidies, was HK$2,748.4 million, representing a 34.2% increase[4]. - Total revenue for the fiscal year 2023/24 was HK$2,748.4 million, reflecting a year-on-year growth of 5.9%[58]. - Profit for the year decreased to HK$118,649, down from HK$140,953 in 2023, reflecting a profit margin of 4.3% compared to 5.4% in the previous year[66]. - Profit for FY2024, excluding government subsidies, increased by 34.2% year-on-year to HK$117.0 million, while including subsidies, profit was HK$118.6 million, down from HK$141.0 million in FY2023[119]. - The Group achieved a revenue increase of 4.8% year-on-year in FY2024, reaching HK$2,570.9 million, primarily driven by the net addition of 7 restaurants in Hong Kong[158]. - Revenue for the year ended 31 March 2024 increased to HK$2,748,406, representing a growth of 5.9% compared to HK$2,594,613 in 2023[187]. Market Expansion - The company plans to expand its footprint in Asia through joint ventures and franchises, including potential partnerships in the Philippines[39]. - The company plans to expand into Australia and the Philippines through franchising, aiming to bring the "Tam Jai Taste" to a global audience[75]. - A joint venture was established with ST Group in October 2023 to facilitate franchise expansion into Australia and New Zealand[139]. - The company is finalizing a master franchise agreement for entry into the Philippines, aiming to expand into the Southeast Asian market[142]. - The Group's restaurant network in Hong Kong reached a total of 189 self-operated stores as of March 31, 2024[158]. Operational Efficiency - Operating profit in the Hong Kong market was HK$2,570.9 million, while there was an operating loss in markets outside Hong Kong, with a loss margin of 52.5%[4]. - The company reported a decrease in consumables and packaging costs from HK$75.5 million to HK$61.2 million, a reduction of 18.9%[30]. - Other expenses increased by 14.9% from HK$71.1 million to HK$81.7 million, primarily due to the increase in the number of restaurants and expansion of headquarters[15]. - The cost-to-revenue ratio for food and beverages remained stable at 23.6% in FY2024, slightly improved from 23.9% in FY2023, due to strategic price adjustments and enhanced procurement strategies[123]. - Staff cost-to-revenue ratio at the restaurant level remained stable at 25.3% in FY2024, compared to 24.8% in FY2023, while overall staff cost-to-revenue ratio was 32.4% in FY2024, up from 31.9% in FY2023[126]. Customer Engagement and Product Development - The introduction of the "Me More Tea Set" and "Hot Dish" series has successfully increased market penetration and expanded the customer base[71]. - The introduction of innovative limited-time offers has successfully increased market penetration and customer engagement[98]. - The Group's strategic initiatives included joint promotions with aggregators and activating members through its CRM system, significantly driving incremental revenue and customer loyalty[131]. - The company is focusing on digital transformation to enhance IT systems and mobile apps, aiming to improve customer experience and optimize staff productivity[73]. - The Group plans to launch a CRM system by the end of 2024 and explore new opportunities for expanding the "Tam Jai Taste" brand in the Asia Pacific region[199]. Challenges and Market Conditions - The chairman highlighted the impact of weak consumer confidence and changing habits on the restaurant industry, affecting overall performance[77]. - The company faced challenges in overseas markets, particularly in Mainland China and Singapore, while achieving notable progress in Japan[80]. - Average spending per customer in Hong Kong decreased slightly from HK$61.5 in 2023 to HK$61.2 in 2024[88]. - Average daily revenue per restaurant in Hong Kong was HK$38,578 in 2024, down from HK$38,915 in 2023[88]. - Comparable restaurant revenue performance remained stable with a slight increase of 0.3% in FY2024, despite challenges from outbound travelers impacting weekend revenue growth[160]. Sustainability and Corporate Responsibility - The Group's commitment to sustainable development is reflected in its ESG strategy, focusing on "Nourishing Communities," "Uplifting People," and "Preserving Nature"[114]. - The overall employee cost ratio remained at 32.4% in FY2024, slightly up from 31.9% in FY2023, indicating ongoing investment in talent development[156].

Investment Rating - The report maintains a "Buy" rating for Tam Jai International (02217 HK) with a target price of HK$1.40 [1][54]. Core Insights - The company is expected to achieve stable revenue growth from FY2025 to FY2027, with projected revenues of HK$3.034 billion, HK$3.345 billion, and HK$3.595 billion, representing a compound annual growth rate (CAGR) of 9.4% [12][71]. - The company plans to expand its business into Australia and the Philippines, leveraging a joint venture and franchise agreements to capture new growth opportunities [16][54]. - The impact of Hong Kong residents traveling to mainland China for consumption is expected to be relatively minor for the company, as its fast-casual brand is less affected compared to other dining sectors [6][54]. Summary by Sections Financial Performance - For FY2024, the company reported a revenue increase of 5.9% to HK$2.748 billion, with a net profit of HK$119 million, a decrease of 15.8% year-on-year [54][59]. - Adjusted net profit, excluding government subsidies, showed a significant increase of 34.2% year-on-year [54][59]. - The operating profit margin is expected to remain around 6% from FY2025 to FY2027, despite ongoing employee cost pressures [13][54]. Market Expansion - The company is actively pursuing international expansion, with plans to open its first restaurant in Melbourne, Australia, in 2024 and a restaurant in the Philippines by March 2025 [16][54]. - The franchise model will allow the company to introduce more brands in Hong Kong, enhancing its growth potential [18][54]. Revenue Breakdown - Revenue from Hong Kong accounted for 93.5% of total revenue in FY2024, with a year-on-year growth of 4.8% [58][52]. - Revenue from mainland China and overseas markets is projected to grow significantly, with a 25.1% year-on-year increase in FY2024 [58][67]. Future Projections - The report forecasts net profit growth for FY2025 to FY2027, with expected net profits of HK$129 million, HK$139 million, and HK$149 million, respectively, indicating a CAGR of 8.0% [71][54]. - The company aims to diversify its brand portfolio through franchise agreements, targeting the opening of 50 different restaurant brands in the medium to long term [18][54].

Financial Performance - The company's revenue increased by 5.9% to HKD 2,748.4 million, benefiting from a net addition of 14 restaurants and slight growth in comparable restaurant revenue in Hong Kong [3] - Annual profit, excluding government subsidies, rose by 34.2% to HKD 117.0 million [3] - Revenue from markets outside Hong Kong increased by 25.1% year-on-year, with significant performance in Japan [16] - Revenue from the Hong Kong market increased by 4.8% year-on-year to HKD 2,570.9 million, driven by the net addition of several new restaurants [39] - The group recorded total revenue of HKD 2,748.4 million for the fiscal year 2024, an increase of 5.9% compared to fiscal year 2023 [37] - The group achieved a compound annual revenue growth rate of 11.0% over the past five fiscal years, despite challenges from COVID-19 and intense competition in the restaurant industry [39] - The company's total revenue from Hong Kong was HKD 2,145.5 million, showing a slight increase of 0.3% compared to the previous year [105] - The company's revenue increased by 5.9% from HKD 2,594.6 million in FY2023 to HKD 2,748.4 million in FY2024, driven by an increase in the number of operating restaurants [109] Profitability and Margins - The company's operating profit margin, excluding government subsidies, improved to 4.3% from 3.4% year-on-year [4] - The operating profit (non-HKFRS measure) for the year was HKD 459,044, reflecting a 3.1% increase from HKD 445,424 in the previous year [82] - The operating profit margin (non-HKFRS measure) decreased to 16.7% from 17.2% in the previous year [102] - The operating profit in Hong Kong remained stable at HKD 473.2 million, compared to HKD 475.2 million in the fiscal year 2023 [69] - The annual profit, excluding government subsidies, rose by 34.2% year-on-year to HKD 117.0 million, while including subsidies, the profit was HKD 118.6 million (FY2023: HKD 141.0 million) [37] Dividends and Shareholder Returns - The board recommended a final dividend of HKD 0.059 per share, resulting in a total annual dividend of HKD 0.089 per share, with a payout ratio of 100% [3] - The total dividend for fiscal year 2024 is proposed at 8.9 HKD cents per share, down from 10.5 HKD cents in fiscal year 2023, maintaining a payout ratio of approximately 100% [29] - The proposed final dividend is HKD 0.059 per share, down from HKD 0.105 per share in the previous year [195] Cost Management - The restaurant employee cost as a percentage of revenue for the fiscal year 2024 is maintained at a stable level of 25.3%, compared to 24.8% in fiscal year 2023 [18] - Overall employee cost as a percentage of revenue for fiscal year 2024 is 32.4%, up from 31.9% in fiscal year 2023 [18] - The group maintained the cost of food and beverage as a percentage of revenue at 23.6%, a slight improvement from 23.9% in the fiscal year 2023, through strategic pricing adjustments and enhanced procurement strategies [66] - Employee costs increased by 7.3% to HKD 889,506, up from HKD 828,579 in the previous year [95] - The cost of food and beverages rose by 4.5% to HKD 648,136, compared to HKD 620,318 in the previous year [82] Strategic Initiatives - The company is optimistic about its franchise business in the Philippines, which is seen as a key entry point into the Southeast Asian market [11] - The company aims to optimize profitability through brand building, marketing promotion, menu localization, and store upgrades in overseas markets [16] - The company has established an ESG strategy focused on community support, employee welfare, and environmental initiatives [14] - The company plans to invest in management teams and talent development to achieve growth targets, while enhancing its POS and CRM systems for digital transformation [33] - The company has established a joint venture with ST Group Food Industries Holdings Limited to expand its franchise business, leveraging ST Group's extensive network in Australia and New Zealand [32] Market Expansion - The company strategically closed 4 underperforming restaurants in Shenzhen and shifted expansion focus to Guangzhou and second-tier cities in the Greater Bay Area, where operating costs are lower [21] - The company opened 10 new restaurants in the Greater Bay Area during fiscal year 2024, with better profitability compared to those in Shenzhen, indicating the effectiveness of the new strategy [21] - The group plans to open 50 franchised brand restaurants in Hong Kong over the next five to seven years to adapt to changing consumer preferences [49] - The group has entered into a joint venture agreement to expand into the Australian and New Zealand markets, with plans to open its first restaurant in Melbourne in 2024 [50] - The group is exploring franchise opportunities in the Philippines to establish a strong foothold in the Southeast Asian market [77] Operational Efficiency - The group has successfully improved cost efficiency through various measures, including using alternative ingredients and reducing food waste [46] - The company plans to continue investing in technology to enhance POS systems, CRM systems, and supply chain management systems to improve customer experience and operational efficiency [80] - The company aims to strengthen its global procurement strategy to reduce material costs while adhering to ESG strategies [102] Customer Insights - Average customer spending in Hong Kong was HKD 38,578, while in mainland China it was HKD 8,974, and in Japan it was HKD 24,023 [62] - The group aims to enhance market penetration by expanding its product offerings, including the launch of innovative afternoon tea and hot pot series [68] - The group plans to strengthen partnerships with banks and food delivery platforms to launch more promotional activities and enhance brand awareness [72] Financial Position - The company maintains a strong financial position with ample cash reserves to explore potential investment and partnership opportunities for faster growth [34] - Cash and bank balances remained relatively stable, decreasing from 1,375,650 thousand HKD in 2023 to 1,351,523 thousand HKD in 2024, a decline of about 1.8% [137] - The company had no interest-bearing bank and other borrowings as of March 31, 2024, consistent with the previous year [199] - The company's lease liabilities increased from 351,590 thousand HKD in 2023 to 377,829 thousand HKD in 2024, an increase of approximately 7.4% [137] Governance and Compliance - The company has maintained a high level of corporate governance and has complied with the applicable codes under the Hong Kong Stock Exchange [178] - The company has confirmed compliance with the standard code for securities trading by all directors during the fiscal year [179]

Revenue Performance - Revenue for 1H2024 increased by 9.9% to HK$1,387.4 million compared to HK$1,261.7 million in 1H2023[39] - In 1H2024, the Group's revenue increased by 10.0% year-on-year to HK$1,387.4 million, with a net increase of 14 restaurants, bringing the total to 222 restaurants[45] - Revenue from Hong Kong increased by 8.2% year-on-year to HK$1,296.1 million in 1H2024, driven by a 2.9% increase in comparable restaurant revenue[64] - The Group opened 7 new restaurants in Mainland China during 1H2024, leading to a 58.6% increase in revenue from this market compared to 1H2023[70] - Revenue from the Group's Japan operations grew by 22.2% year-on-year in 1H2024, supported by the addition of delivery channels and improved operational standards[102] - Revenue from Mainland China and overseas markets surged by 44.1% to HK$91.3 million in 1H2024 from HK$63.3 million in 1H2023[197] Profitability - Profit excluding government subsidies for 1H2024 surged by 153.1% year-on-year to HK$81.4 million, while the profit for the period was HK$81.6 million[62] - Operating profit for Hong Kong increased by 12.9% to HK$262.4 million, while Mainland China and overseas markets reported a loss of HK$5.3 million, a decrease of 68.3%[153] - Total operating profit rose by 19.3% to HK$257.0 million compared to HK$215.5 million in the previous year[153] - Operating profit margin for the Group's Hong Kong business improved to 20.2% in 1H2024, up from 19.4% in 1H2023, reflecting enhanced operational efficiency and effective cost control[97] - The operating profit margin improved from 17.1% in 1H2023 to 18.5% in 1H2024, attributed to reduced costs of consumables and food ingredients[153] Expenses and Costs - Income tax expense rose from HK$18.6 million in 1H2023 to HK$20.0 million in 1H2024 due to an increase in taxable profits[7] - Other expenses increased by 21.1% from HK$31.9 million in 1H2023 to HK$38.6 million in 1H2024, primarily due to headquarters and office expansion[14] - Finance costs increased by 22.2% from HK$9.0 million in the first half of 2023 to HK$11.0 million in the first half of 2024 due to increased interest on lease liabilities[132] - The overall staff costs increased by 7.8% from HK$405.2 million in 1H2023 to HK$436.9 million in 1H2024, with staff costs as a percentage of revenue decreasing from 32.1% to 31.5%[186] - Cost of food and beverages consumed rose by 8.5% from HK$302.1 million in 1H2023 to HK$327.8 million in 1H2024, representing 23.9% of revenue in 1H2023 and 23.6% in 1H2024[184] Dividends and Shareholder Returns - An interim dividend of HK3.0 cents per share was declared for 1H2024, representing a payout ratio of approximately 49.2%[28] - The interim dividend for 1H2024 was declared at HK$0.03 per share, with a payout ratio of approximately 49.2%[65] Operational Efficiency - The operating profit margin in Hong Kong reached approximately 20.2%, reflecting strong operational efficiency[45] - The staff cost-to-revenue ratio remained stable, indicating effective cost control and operational efficiency despite challenges in the F&B sector[62] - Average daily revenue per restaurant in Hong Kong increased to HK$39,137 in 1H2024 from HK$38,581 in 1H2023[181] Expansion and Market Strategy - The company plans to expand its restaurant network through joint ventures and franchising arrangements in selected overseas markets[1] - A joint venture has been established with ST Group Food Industries Holdings Limited to enter the Australian market, aiming for lower initial investment and reduced risks[49] - The Group is implementing a multi-branding strategy in Hong Kong, including a franchise agreement with Toridoll Holdings Corporation for the "Marugame Seimen" brand[52] - The Group plans to slow down expansion in Mainland China, focusing on Guangzhou and second-tier cities in the Greater Bay Area, while enhancing brand competitiveness through localization[148] - The Group's entry into the Australian market will utilize a joint venture and franchising model to reduce capital input and risk, aiming for rapid expansion and market penetration[158] Sustainability and Corporate Responsibility - The Group's commitment to sustainability and generating stable returns for stakeholders remains a priority[54] - The company has made significant progress in sustainability by implementing a new takeaway utensil policy to phase out disposable plastic utensils starting October 2023[159] Market Conditions and Challenges - Comparable restaurant revenue in Mainland China experienced a slight decline due to challenging market conditions in Shenzhen, leading to reduced customer spending[98] - The Group's business in Singapore saw a total revenue increase of 38.8% in 1H2024 compared to 1H2023, despite a decrease in comparable restaurant revenue due to labor shortages[101] - In Singapore, comparable restaurant revenue decreased due to labor shortages, despite total revenue increasing by 38.8% in the first half of 2024 compared to the same period in 2023[126] - The average nominal salary in the accommodation and food services sector in Hong Kong increased by 4.1% year-on-year as of June 2023[65] Asset Management - Right-of-use assets increased from HK$768.6 million as of March 31, 2023, to HK$858.3 million as of September 30, 2023, reflecting more tenancy agreements[9] - Lease liabilities increased from HK$787.8 million to HK$881.6 million, primarily due to new lease agreements for restaurants in the first half of 2024[111] - Trade and other receivables remained stable at HK$215.1 million as of March 31, 2023, and HK$213.8 million as of September 30, 2023[11] - Cash and cash equivalents decreased from HK$1,375.7 million to HK$1,339.0 million as of September 30, 2023[113]

Revenue Growth - For the six months ended September 30, 2023, the revenue from Hong Kong increased by 8.2% year-on-year to HKD 1,296.1 million, driven by improved comparable restaurant performance since Q4 of the previous fiscal year [4]. - The Singapore market's total revenue for the first half of 2024 increased by 38.8% compared to the same period in 2023, despite a decline in comparable restaurant revenue due to labor shortages [5]. - Revenue increased by 10.0% from HKD 1,261.7 million in the first half of 2023 to HKD 1,387.4 million in the first half of 2024, primarily due to an increase in the number of operating restaurants and growth in comparable restaurant revenue in Hong Kong [24]. - Revenue for the first half of 2024 reached HKD 1,387.4 million, a 10.0% increase from HKD 1,261.7 million in the same period of 2023 [62]. - Revenue from external customers for the six months ended September 30, 2023, was HKD 1,387,369,000, an increase from HKD 1,261,721,000 in the same period last year, representing a growth of 9.9% [175]. Profitability - The operating profit for the first half of 2024 was HKD 257.0 million, representing a 19.3% increase from HKD 215.5 million in the same period of 2023 [16]. - The operating profit margin improved from 17.1% in the first half of 2023 to 18.5% in the first half of 2024, attributed to a decrease in the percentage of costs related to materials and food [17]. - The company's profit for the period was HKD 81.6 million, slightly down from HKD 82.8 million in the previous year, while profit excluding government subsidies increased by 153.1% to HKD 81.4 million [74]. - Profit for the period decreased by 1.4% to HKD 81.6 million, while profit excluding government subsidies increased by 153.1% to HKD 81.4 million [198]. Operating Performance - The operating loss in markets outside Hong Kong narrowed by 68.3% to HKD 5.3 million, attributed to improved performance in mainland China and Japan [73]. - The operating profit margin for Hong Kong operations improved from 19.4% in the first half of 2023 to 20.2% in the first half of 2024, reflecting successful business strategies and effective cost control [22]. - Comparable restaurant revenue in Hong Kong rose by 2.9% to HKD 1,096.0 million, while comparable restaurant revenue in mainland China and overseas markets decreased by 5.7% to HKD 38.1 million [35]. Expansion Plans - The company plans to continue expanding its business network in existing and overseas markets, including a joint venture with ST Group in Australia, where it holds a 49% stake [13]. - The company plans to expand into the Philippines through a franchise agreement with Suyen Corporation, leveraging their strong business network in the local market [30]. - The company is expanding into the Australian market using a joint venture and franchising model to reduce capital investment and risk [50]. - The company is exploring franchising opportunities in Australia and the Philippines while promoting brand diversification in Hong Kong [198]. Cost Management - The cost of food and beverages rose by 8.5% to HKD 327.8 million in the first half of 2024, accounting for 23.6% of revenue [63]. - Employee costs increased by 7.8% to HKD 436.9 million, representing 31.5% of revenue in the first half of 2024 [63]. - The company's financing costs increased by 22.2% from HKD 9.0 million in the first half of 2023 to HKD 11.0 million in the first half of 2024 due to the expansion of the restaurant network [46]. - The company's electricity and water expenses rose by 27.3% to HKD 45.2 million, accounting for 3.3% of revenue in the first half of 2024 [43]. Dividend Declaration - The company declared an interim dividend of HKD 0.03 per share for the first half of 2024, with a payout ratio of approximately 49.2% [20]. - The board declared an interim dividend of HKD 0.03 per share, compared to no dividend in the first half of 2023 [198]. Strategic Initiatives - The company is enhancing localization efforts in mainland China, including launching food that caters to local tastes and conducting marketing activities on popular social media platforms [10]. - The company is focusing on developing new product varieties for its top brands, "Tam Jai Yunnan Noodles" and "Sam Go," to attract more customers and enhance customer relationship management [14]. - The company is focusing on enhancing brand awareness and adapting to local markets in mainland China, Singapore, and Japan as part of its second development phase [51]. Financial Position - Cash and cash equivalents amounted to HKD 1,339.0 million as of September 30, 2023, down from HKD 1,375.7 million as of March 31, 2023 [105]. - Non-current assets totaled HKD 1,225,531 as of September 30, 2023, an increase from HKD 1,161,080 [141]. - The company's net asset value decreased to HKD 1,481,535,000 from HKD 1,541,848,000, indicating a decline of about 3.9% [142]. - Total assets less current liabilities were HKD 2,045,287, slightly up from HKD 2,044,473 [141].

Revenue and Profit - Revenue increased by 14.0% to HK$2,594.6 million year-on-year, mainly attributable to the increased number of restaurants in operation[25] - Profit for the year decreased by 30.6% to HK$140.9 million, with a profit margin of 5.4% compared to 8.9% in the previous year[10] - Revenue from takeaway and delivery services contributed 45.3% of total revenue in FY2023[18] - Revenue for the fiscal year 2023 was HK$2,594.6 million, with a comparable restaurant revenue of HK$1,980.3 million, reflecting a decrease of 2.0% from HK$2,020.2 million in fiscal year 2022[70][72] - Operating profit decreased by 6.6% to HK$445.4 million in FY2023, with an operating profit margin of 17.2%, down from 20.9% in FY2022[84] Expansion and Growth - In Singapore, revenue reached HK$64.2 million in FY2023, representing a 149.8% year-on-year increase[27] - The company aims to open approximately 50 new restaurants in various regions in FY2024 as part of its expansion strategy[52] - The company accelerated its expansion strategy in Mainland China, opening 12 new restaurants in tier 2 cities of the Greater Bay Area during FY2023[37] - In FY2023, the company opened 20 new restaurants in Hong Kong, enhancing its restaurant network for recovery in FY2024[36] - The total number of self-operated restaurants increased from 86 in FY2022 to 104 in FY2023, with significant growth in Hong Kong and Singapore[86] Operational Efficiency and Costs - The cost of food and beverages consumed increased by 19.7% from HK$518.3 million in fiscal year 2022 to HK$620.3 million in fiscal year 2023, representing 23.9% of revenue[78] - Staff costs rose by 14.6% from HK$722.8 million in fiscal year 2022 to HK$828.6 million in fiscal year 2023, accounting for 31.9% of revenue[79] - Depreciation of owned property, plant, and equipment increased by 33.4% from HK$92.2 million in fiscal year 2022 to HK$123.0 million in fiscal year 2023[80] - Utilities expenses increased by 37.9% from HK$53.0 million in FY2022 to HK$73.1 million in FY2023, driven by the growth in the number of restaurants and rising charge rates[125] - Other expenses grew by 39.1% from HK$51.1 million in FY2022 to HK$71.1 million in FY2023, mainly due to the increase in the number of restaurants and expansion of headquarters[106] Marketing and Brand Development - The company aims to promote the "Tam Jai" brand in overseas markets as part of its international expansion plan[35] - The company is committed to building strong customer loyalty and brand recognition through innovative marketing strategies[32] - The company launched a series of branding and promotion campaigns in Japan, including the "Spicy Challenges" campaign, to build brand awareness[41] - The company successfully conducted brand-building activities in Mainland China and Singapore, enhancing brand awareness[61] - The company aims to integrate its brand into local markets through various promotional activities and social media engagement[61] Financial Position and Assets - Non-current assets increased by 10.0% to HK$1,161.1 million[10] - Current liabilities rose by 10.2% to HK$630.5 million[10] - Cash and cash equivalents as of 31 March 2023 were HK$1,375.7 million, slightly up from HK$1,365.2 million as of 31 March 2022[113] - Right-of-use assets increased from HK$700.8 million as of 31 March 2022 to HK$768.6 million as of 31 March 2023 due to more tenancy agreements for restaurants and offices[131] - Trade and other payables and accruals increased from HK$199.4 million as of 31 March 2022 to HK$238.4 million as of 31 March 2023, resulting from operational expansion[133] Employee and Staffing - The company had 3,363 employees as of March 31, 2023, an increase of 12.3% from 2,990 employees on March 31, 2022[160] - Employee costs totaled HK$828.6 million in FY2023, up from HK$722.8 million in FY2022, reflecting an increase in restaurant and office staff[122] - The basic salary for employees is generally based on their work experience and prevailing market salary levels[160] Future Outlook - The company expects business recovery in Hong Kong to continue, driven by the lifting of border restrictions and social distancing measures[48] - The company plans to close two under-performing restaurants in Mainland China in Q1 FY2024 to enhance efficiency[37] - The company is enhancing operational efficiency and service quality in Singapore and Japan while adapting its brand to local markets[50] - The company has shown agility in operations despite economic challenges, positioning itself for future business opportunities[63] Miscellaneous - The first-ever Charitable NFT, "Souper Hero," was launched during FY2023, achieving a 10-times over-subscription during the whitelisting stage[45] - The company does not have a currency hedging policy, and fluctuations in Renminbi, Singapore dollars, and Japanese Yen against Hong Kong dollars may affect results[136] - The company will continue to monitor foreign currency exposure and take appropriate measures to minimize risks when necessary[136] - As of March 31, 2023, capital commitments amounted to HK$2.3 million, a decrease of 72.6% from HK$8.4 million on March 31, 2022[160]

Financial Performance - The company's revenue for the fiscal year ending March 31, 2023, was HKD 2,594.6 million, representing a 14.0% increase from HKD 2,275.3 million in the previous year[9]. - Operating profit decreased by 6.6% to HKD 445.4 million, down from HKD 476.7 million, resulting in an operating profit margin of 17.2%, down from 20.9%[11]. - The company reported a pre-tax profit of HKD 176,005, a decrease of 28.2% from the previous year, and an annual profit of HKD 140,953, down 30.6%[23]. - The profit margin for the fiscal year was 5.4%, reflecting the challenges faced in the market[23]. - The net profit for the fiscal year 2023 was HKD 141.0 million, down from HKD 203.0 million in the fiscal year 2022, with basic earnings per share at HKD 0.105 compared to HKD 0.175 in the previous year[48]. - The company’s profit attributable to ordinary equity shareholders for the year was HKD 140,953,000, a decrease of 30.5% from HKD 202,960,000 in the previous year[171]. Revenue Breakdown - The revenue from Hong Kong was HKD 2,452,667, up 10.4% from HKD 2,221,773, while revenue from mainland China and overseas markets surged by 165.2% to HKD 141,946 from HKD 53,525[15]. - For the fiscal year 2023, the company's revenue reached HKD 2,594.6 million, representing a 14.0% increase compared to HKD 2,275.3 million in the fiscal year 2022[46]. - The comparable restaurant revenue in Hong Kong decreased by 9.0% in the first half of the fiscal year 2023, but the overall decline for the year was only 2.2% due to improvements in the second half[49]. - In Singapore, the company achieved revenue of HKD 64.2 million in FY2023, a year-on-year growth of 149.8%, with average bowls sold per seat increasing by 32.1% to 3.7[62]. Cost and Expenses - The cost of food and beverages increased by 19.7%, while employee costs rose by 13.2%, contributing to the decline in operating profit margin[11]. - Employee costs rose to HKD 828,579, an increase of 14.6% from HKD 722,808 in the previous year[164]. - Food and beverage costs increased by 19.7% from HKD 518.3 million in fiscal year 2022 to HKD 620.3 million in fiscal year 2023, representing 23.9% of total revenue[94]. - Utilities expenses rose by 37.9% from HKD 53.0 million in fiscal year 2022 to HKD 73.1 million in fiscal year 2023, representing 2.8% of total revenue[101]. - Depreciation and related expenses for right-of-use assets increased by 19.3% from HKD 418.4 million in fiscal year 2022 to HKD 499.3 million in fiscal year 2023[98]. - Advertising and promotional expenses rose by 30.9% from HKD 46.6 million in fiscal year 2022 to HKD 61.0 million in fiscal year 2023, driven by brand-building activities in new markets[116]. Expansion and Growth Strategy - The company plans to open approximately 50 new restaurants in various regions during the fiscal year 2024, aiming to expand its market presence[6]. - The company opened a total of 20 new restaurants in Hong Kong, mainland China, Singapore, and Japan during the fiscal year 2023, bringing the total to 215 restaurants by March 31, 2023[46]. - The company plans to expand its brand internationally, with a focus on Western markets starting in the fiscal year 2024, despite challenges from the macroeconomic environment[41]. - The company is investing in automation technology to enhance operational efficiency and support future expansion[85]. Marketing and Customer Engagement - The company is focusing on enhancing product and service quality to maintain its brand value in Hong Kong, especially after the lifting of border restrictions[5]. - Marketing activities are planned in the Greater Bay Area to capitalize on economic recovery opportunities following the reopening of borders[6]. - New marketing initiatives, including the launch of mobile apps and promotional campaigns, have been implemented to drive customer engagement and sales[50]. - The company successfully attracted approximately 450,000 independent members to its CRM system within a few months, demonstrating the effectiveness of its digital transformation strategy[38]. Community and Social Responsibility - The company has expanded its scholarship program, increasing the total amount from HKD 1.0 million to HKD 3.0 million, supporting 60 awardees[1]. - The company has established the "Tam Jai Charity Fund" to support ESG initiatives, focusing on community enrichment, people-centric projects, and green initiatives[39]. - The company introduced a charity NFT called "Souper Hero," which achieved a 10x oversubscription during its whitelist phase[14]. Operational Efficiency - The company implemented cost control measures and improved operational efficiency despite challenges, maintaining employee costs at a similar level compared to the previous fiscal year[68]. - The company is expanding its supplier network to mitigate rising food costs and improve supply chain efficiency[85]. - The company aims to enhance its CRM and mobile app functionalities to improve operational excellence and customer experience, which will contribute to brand value and revenue growth[38]. Assets and Liabilities - The non-current assets increased by 10.0% to HKD 1,161,080 from HKD 1,055,739, while current assets remained relatively stable with a slight increase of 0.1%[25]. - The current ratio decreased to 2.4 from 2.6, indicating a slight decline in liquidity[25]. - Cash and cash equivalents amounted to HKD 1,375.7 million as of March 31, 2023, compared to HKD 1,365.2 million as of March 31, 2022, with no interest-bearing bank or other borrowings[134]. - Total non-current liabilities increased to HKD 502,625 from HKD 443,050, representing a rise of 13.4%[146].