Core Points - Tims China announced its first quarter 2025 financial results, which are available on the company's Investor Relations website [2][3] - The earnings call features remarks from the CEO Yongchen Lu and CFO Albert Li, followed by a question-and-answer session [3] Financial Highlights - The company provided operational and financial highlights in a press release and accompanying presentation [2] - Forward-looking statements were included in the earnings presentation, indicating potential future events and uncertainties [4][5]

Financial Data and Key Metrics Changes - The company achieved a 3.5% increase in system sales year over year in Q1 2025, with profits from other revenues increasing by 34.5% year over year [9][16] - Adjusted corporate EBITDA margin improved by 6.1 percentage points year over year, while company-owned and operated store contribution margin improved by 5.9 percentage points [8][13] - Monthly average transacting customers reached 2,920,000, a 4.3% increase from the same quarter in 2024 [14] Business Line Data and Key Metrics Changes - Revenue from franchised and retail businesses increased by 28.6% year over year, while company-owned and operated store revenue dropped by 14% year over year [15][16] - The number of franchised stores increased from 302 to 455 year over year [16] Market Data and Key Metrics Changes - The company expanded its store footprint into 84 cities, including Fujian and Nantang, during Q1 [10] - The largest loyalty club members reached 25,200,000, reflecting a 25.7% year over year growth [10] Company Strategy and Development Direction - The company is focusing on a differentiated strategic positioning in coffee and freshly prepared food, launching new products like the light and fit lunch box to reshape consumer perceptions [5][7] - The strategy includes moving from singular coffee consumption to all-day healthy dining, embedding a café experience into a health-focused lifestyle [8] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic volatility and intense market competition but highlighted significant profitability improvements due to operational efficiencies and cost controls [8][9] - The company remains optimistic about achieving positive same store sales growth in 2025, especially in the second half of the year [37] Other Important Information - The company has received over 7,000 applications for its individual franchisee program since its launch in December 2023, successfully converting nearly 200 stores by March 2025 [10] - The company is enhancing its digital capabilities, with digital orders as a percentage of total orders rising from 85.4% to 86.3% year over year [15] Q&A Session Summary Question: Outlook for new store openings and franchise applications - Management indicated that Q1 is typically slow, but they aim to open around 200 made-to-order stores this year, with most openings expected in the second half [23][25] Question: Current state of the Chinese consumer and government stimulus - Management noted that consumer morale has not significantly improved post-Chinese New Year, and they are waiting to see the effects of government policies on consumption [26][27] Question: Competition and market growth - Management emphasized that the market has become more rational, focusing on differentiation rather than price competition, and highlighted the success of their new product offerings [29][31]

Financial Data and Key Metrics Changes - The company achieved a 3.5% increase in system sales year over year in Q1 2025, with profits from other revenues increasing by 34.5% year over year [11][16] - Adjusted corporate EBITDA margin improved by 6.1 percentage points year over year, while company-owned and operated store contribution margin improved by 5.9 percentage points [10][15] - Monthly average transacting customers reached 2,920,000, a 4.3% increase from the previous year [16] Business Line Data and Key Metrics Changes - Revenue from franchised and retail businesses increased by 28.6% year over year, while company-owned and operated store revenue dropped by 14% year over year [16][19] - The number of franchised stores increased from 302 to 455 year over year [16] Market Data and Key Metrics Changes - The company expanded its store footprint into 84 cities, including Fujian and Nantang, and received over 7,000 franchise applications since launching the individual franchisee program [12][21] - The largest loyalty club members reached 25,200,000, reflecting a 25.7% year over year growth [12] Company Strategy and Development Direction - The company is focusing on a differentiated strategic positioning in coffee plus freshly prepared food, launching new products like the light and fit lunch box to reshape consumer perceptions [6][8] - The company aims to open around 200 made-to-order stores in 2025, with most openings expected in the second half of the year [27] Management's Comments on Operating Environment and Future Outlook - Management noted that the Chinese consumer sentiment remains cautious, with the economy struggling, but they are optimistic about achieving positive same store sales growth in 2025, especially in the second half [29][40] - The company is committed to sustainable profitable growth and generating long-term value for shareholders [21] Other Important Information - The company has implemented strategic marketing initiatives to drive traffic and increase average transaction value, including co-branded collaborations and a brand birthday campaign [13][14] - Operational efficiencies and cost controls have been emphasized, leading to a reduction in food and packaging costs as a percentage of revenues [18][19] Q&A Session Summary Question: Outlook for new store openings and franchise applications - Management indicated that Q1 is typically slow, but they plan to accelerate store openings in the second half of the year, aiming for around 200 made-to-order stores [24][27] Question: Current state of the Chinese consumer and government stimulus - Management noted that consumer morale has not significantly improved post-Chinese New Year, and they are waiting to see the effects of government policies on consumption [28][29] Question: Competition and market growth - Management stated that the market has become more rational, focusing on differentiation rather than price competition, and emphasized their unique coffee plus food combo offerings [31][33]

Business Performance - Tims China's total store count reached 1,024 in Q1 2025, a 13% increase year-over-year compared to 906 in Q1 2024[13] - The company opened 2 net new stores in Q1 2025, a 50% decrease compared to 4 in Q1 2024[13] - Registered loyalty club members increased to 251 million in Q1 2025, a 257% increase year-over-year from 200 million in Q1 2024[13] - Digital orders accounted for 863% of revenues from company-owned stores in Q1 2025, a 27 percentage point increase from 836% in Q1 2024[13] - Total revenues decreased by 95% to RMB 3007 million in Q1 2025, compared to RMB 3321 million in Q1 2024[13] - System sales increased by 35% to RMB 3763 million in Q1 2025, compared to RMB 3635 million in Q1 2024[13] - Revenues from company-owned stores decreased by 14% to RMB 2548 million in Q1 2025, compared to RMB 2964 million in Q1 2024[13] - Same-store sales growth for company-owned stores was -65% in Q1 2025, a 52 percentage point increase from -117% in Q1 2024[13] Financial Metrics - Company owned and operated store contribution margin improved to 67% in Q1 2025, compared to 08% in Q1 2024[12] - Adjusted corporate EBITDA margin improved to -97% in Q1 2025, compared to -158% in Q1 2024[12] Franchise Expansion - Revenues from sub-franchise business were RMB 424 million in Q1 2025[42]

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, reported a 3.5% year-over-year increase in system sales to RMB376.3 million (USD51.9 million) for Q1 2025, despite a 9.5% decrease in total revenues to RMB300.7 million (USD41.4 million) [1][6][4] - The company achieved a significant improvement in its company-owned and operated store contribution margin, which increased by 5.9 percentage points to 6.7% [4][6] - The registered loyalty club members grew by 25.7% year-over-year, reaching 25.1 million by the end of Q1 2025 [1][6] Financial Performance - Total revenues for Q1 2025 were RMB300.7 million (USD41.4 million), down from RMB332.1 million in Q1 2024, marking a 9.5% decrease [6][7] - System sales increased to RMB376.3 million (USD51.9 million), reflecting a 3.5% growth compared to the same quarter of the previous year [6][7] - The company-owned and operated store contribution was RMB17.2 million (USD2.4 million), a significant increase from RMB2.3 million in Q1 2024 [6][7] Cost Management - The company successfully reduced various costs, including food and packaging costs by 24.6% year-over-year, and payroll and employee benefits expenses by 23.3% [8][10][11] - Marketing expenses decreased by 11.8% to RMB17.4 million (USD2.4 million) [10] - General and administrative expenses were reduced by 4.9% to RMB51.8 million (USD7.1 million) [11] Operational Developments - The company opened 2 new stores, resulting in a total of 1,024 stores as of March 31, 2025, with 569 being company-owned and operated and 455 franchised [20][6] - The launch of the "Light & Fit Lunch Box" product line aimed to enhance sales and improve store unit economics [3][4] - The company plans to focus on operational efficiencies and supply chain optimizations in the upcoming quarters [4][3] Market Position - Tims China was recognized in the 2025 China Restaurant Franchise Brand Top 100 list, highlighting its growing brand presence [24] - The company continues to expand its franchise business, increasing the number of franchised stores from 302 to 455 year-over-year [8][6]

Company Overview - TH International Limited, known as "Tims China," is the exclusive operator of Tim Hortons coffee shops in mainland China, Hong Kong, and Macau [2] - The company was established by Cartesian Capital Group and Tim Hortons Restaurants International, a subsidiary of Restaurant Brands International [2] Upcoming Financial Results - Tims China plans to release its first quarter results on June 24, 2025, before market opening [1] - A conference call will follow at 8:00 AM EST or 8:00 PM China Standard Time, which will be webcast and accessible on the company website [1] Company Philosophy - The company's philosophy emphasizes world-class execution, data-driven decision making, local relevance, continuous innovation, community engagement, and convenience [3]

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, has launched its new Loaded Power Bowls nationwide, expanding its healthy lunch options [1][9] - The Loaded Power Bowls feature a "2 + 8 + 8" configuration, including two portions of protein, eight grains, and eight vegetables, catering to health-conscious consumers [2][3] - The introduction of these bowls aligns with a national health initiative in China focused on weight management, reflecting a growing consumer demand for healthier meal options [6][9] Product Details - Each Loaded Power Bowl contains 18 ingredients, including premium proteins like tuna and chicken, a variety of grains, and colorful vegetables, all freshly oven-heated to maintain flavor [2][3][4] - The bowls are offered at an accessible price point, starting from RMB 30 with discounts available, making them a value-driven choice for consumers [5][9] Strategic Positioning - Tims China is redefining the café experience by integrating warm meals with coffee offerings, positioning itself as a destination for healthy dining [10][11] - The company emphasizes a commitment to fresh and healthy eating, as evidenced by its calorie counts and grading systems for beverages, enhancing consumer awareness of dietary choices [7][11]

Core Viewpoint - Tims China is struggling to maintain competitiveness in the rapidly growing Chinese coffee market, facing significant financial challenges and competition from both international and local brands [1][2][12] Financial Performance - In 2024, Tims China reported a revenue decline of 10.8% to 1.391 billion yuan, with a net loss of 409 million yuan, although the loss narrowed by 53% year-on-year [3][12] - The company has total assets of 1.564 billion yuan and total liabilities of 2.397 billion yuan, indicating a state of insolvency [3][4] - Tims China received a total of $65 million in financing from its parent company and shareholders to support operations [4][5] Market Position and Competition - The Chinese coffee market is projected to grow at a compound annual growth rate of 17.14%, reaching 265.4 billion yuan by 2024, with strong competition from Starbucks, Luckin Coffee, and other local brands [1][2] - Tims China has been unable to achieve the scale necessary to compete effectively, with a total of 1,022 stores as of December 31, 2024, falling short of its expansion targets [6][11] Strategic Initiatives - To improve profitability, Tims China is increasing its focus on franchise operations, having opened franchise opportunities in major cities and launched a "county-level franchise" plan [6][8] - The company is also adjusting its product offerings to include lower-cost items to attract consumers in lower-tier cities, although this strategy may compress margins [8][10] Challenges and Risks - Tims China faces challenges in differentiating its product offerings, as its "coffee + warm food" model is easily replicable by competitors [10][12] - The company has raised prices on some products, which has led to consumer dissatisfaction and potential loss of market share [9][10] - The long-term viability of Tims China is in question, with concerns about whether its parent company, RBI, will continue to provide financial support if profitability does not improve [11][12]

Introduction [Discontinued Operations and Basis of Presentation](index=7&type=section&id=Discontinued%20Operations%20and%20Basis%20of%20Presentation) Financial statements reflect Popeyes China as discontinued operations and a 1-for-5 reverse stock split effective December 31, 2024 - On June 28, 2024, the company sold its **100% equity interest in Popeyes China**, which is now treated as a discontinued operation in the financial statements[17](index=17&type=chunk)[18](index=18&type=chunk) - A **1-for-5 reverse stock split** of ordinary shares became effective on December 31, 2024. Historical share and per-share data have been retrospectively adjusted to reflect this change[19](index=19&type=chunk) PART I [ITEM 3: KEY INFORMATION](index=8&type=section&id=ITEM%203%3A%20KEY%20INFORMATION) The company's Cayman Islands holding structure and PRC operations present unique risks, including regulatory oversight, cash transfer restrictions, and HFCAA delisting concerns - THIL is a Cayman Islands holding company, and its operations are conducted entirely through its PRC Subsidiaries. This structure presents unique risks to investors, as they hold securities of the holding company, not the operating entities in China[30](index=30&type=chunk) - The company faces risks from PRC government oversight, which could restrict the ability of its PRC subsidiaries to transfer cash to the parent company for dividends or other purposes. As of the report date, **US$329.9 million** has been transferred to its Hong Kong subsidiary, which in turn transferred **US$282.5 million** to its PRC subsidiaries[34](index=34&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk) - The company's auditor is based in mainland China. While the PCAOB vacated its previous determination of being unable to inspect firms in China on December 15, 2022, there is a risk that this could change. If the PCAOB is unable to inspect the auditor for two consecutive years, the company's securities could be delisted from U.S. exchanges under the HFCAA[40](index=40&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) [Risk Factors](index=11&type=section&id=D%20Risk%20Factors) Key risks include limited operating history, intense competition, PRC regulatory uncertainty, potential HFCAA delisting, and three material weaknesses in internal controls - The company has a limited operating history in China, having opened its first store in February 2019 and grown to **1,022 system-wide stores by December 31, 2024**[49](index=49&type=chunk) - PRC regulations, such as the Cybersecurity Review Measures, may require approval for foreign listings for internet platform operators with over one million users' personal data. The company believes it is not currently subject to this review but acknowledges the uncertainty in regulatory interpretation[109](index=109&type=chunk)[111](index=111&type=chunk)[142](index=142&type=chunk) - The company received a Nasdaq non-compliance notice on July 19, 2024, for failing the minimum bid price requirement. After a **1-for-5 reverse stock split**, it regained compliance on January 28, 2025[194](index=194&type=chunk)[233](index=233&type=chunk)[236](index=236&type=chunk) - Three material weaknesses in internal controls over financial reporting were identified as of December 31, 2024, related to (i) lack of sufficient U.S. GAAP/SEC expertise, (ii) inadequate financial closing procedures, and (iii) ineffective IT general controls in the SAP system[222](index=222&type=chunk)[224](index=224&type=chunk)[636](index=636&type=chunk) [ITEM 4: INFORMATION ON THE COMPANY](index=55&type=section&id=ITEM%204%3A%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, rapid expansion in China, strategic focus on localization and digital innovation, and the Popeyes China divestiture [History and Development of the Company](index=55&type=section&id=A%20History%20and%20Development%20of%20the%20Company) THIL became publicly traded on Nasdaq in September 2022 and regained Nasdaq compliance in January 2025 after a 1-for-5 reverse stock split - The company completed a business combination with Silver Crest Acquisition Corporation and listed on Nasdaq in **September 2022**[232](index=232&type=chunk) - A **1-for-5 reverse stock split** was effective on December 31, 2024, and the company regained compliance with Nasdaq's minimum bid price requirement on January 28, 2025[234](index=234&type=chunk)[236](index=236&type=chunk) [Business Overview](index=56&type=section&id=B%20Business%20Overview) As the exclusive Tim Hortons franchisee, the company operates 1,022 stores in China, focusing on localization, digital innovation, and divested Popeyes China in June 2024 System-Wide Store Count Growth | Year | Company-owned and operated Stores | Franchise Stores | Total | | :--- | :--- | :--- | :--- | | 2019 | 31 | 3 | 34 | | 2020 | 128 | 9 | 137 | | 2021 | 373 | 17 | 390 | | 2022 | 547 | 70 | 617 | | 2023 | 619 | 283 | 902 | | 2024 | 576 | 446 | 1,022 | Loyalty Program Membership Growth | As of December 31 | Members (in millions) | | :--- | :--- | | 2022 | 11.3 | | 2023 | 18.5 | | 2024 | 24.0 | - Digital orders (delivery and mobile self-pickup) constituted **86.1% of revenues** from company-owned and operated stores in 2024, up from 82.1% in 2023 and 80.1% in 2022[241](index=241&type=chunk)[249](index=249&type=chunk) - The company sold its **100% equity interest in Popeyes China** on June 28, 2024, to focus on the Tim Hortons brand[240](index=240&type=chunk) [Organizational Structure](index=74&type=section&id=C%20Organizational%20Structure) THIL is a Cayman Islands holding company that conducts all its business operations in mainland China through its PRC subsidiaries. Investors hold shares in the Cayman entity, not the operating companies directly - The company operates under a holding company structure, with the parent company incorporated in the Cayman Islands and all substantive business operations conducted through subsidiaries in the People's Republic of China[317](index=317&type=chunk) [ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=76&type=section&id=ITEM%205%3A%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) The company's 2024 revenue decreased by 10.8%, net loss narrowed, but liquidity remains stressed with a 'going concern' warning due to recurring losses and negative cash flow [Operating Results](index=76&type=section&id=A%20Operating%20Results) Total revenues decreased by 10.8% to RMB 1,391.2 million in 2024, while net loss significantly improved to RMB 409.0 million, reflecting a shift towards franchising Key Financial Results (in thousands RMB) | Metric | 2023 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | 1,560,006 | 1,391,158 | -10.8% | | Operating Loss from Continuing Operations | (667,925) | (349,081) | -47.7% | | Net Loss | (872,926) | (408,985) | -53.1% | - The decrease in 2024 revenue was primarily driven by a reduction in the number of company-owned and operated stores from 619 to 576 and a **14.6% decrease in same-store sales** for these stores[361](index=361&type=chunk) - Other revenues, mainly from the expanding franchise business, increased by **19.1% in 2024** as the number of franchised stores grew from 283 to 446[361](index=361&type=chunk) - The company presents several non-GAAP financial measures, including adjusted corporate EBITDA, which was a loss of **RMB 96.4 million** in 2024, improving from a loss of RMB 261.9 million in 2023[393](index=393&type=chunk) [Liquidity and Capital Resources](index=93&type=section&id=B%20Liquidity%20and%20Capital%20Resources) Recurring losses and negative operating cash flows raise substantial doubt about the company's going concern, necessitating external financing and expense reduction - The company has incurred recurring losses and net operating cash outflows, leading to substantial doubt about its ability to continue as a going concern[397](index=397&type=chunk)[398](index=398&type=chunk)[673](index=673&type=chunk) Cash and Cash Flow Summary (in thousands RMB) | Metric | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents (end of period) | 239,077 | 202,315 | 184,237 | | Net cash used in operating activities | (286,929) | (196,130) | (39,667) | - In June 2024, the company entered into a securities purchase agreement to issue new Series A and Series A-1 Convertible Subordinated Notes to raise capital and settle existing obligations[402](index=402&type=chunk)[568](index=568&type=chunk) [Critical Accounting Estimates](index=101&type=section&id=E%20Critical%20Accounting%20Estimates) Critical accounting estimates involve significant judgment for share-based compensation and convertible notes, using models like the Binomial Option Pricing Model - Share-based compensation is a critical estimate, with the fair value of options determined using the Binomial Option Pricing Model. Key assumptions for 2024 grants included **24% expected volatility** and a **4.60% risk-free rate**[441](index=441&type=chunk)[442](index=442&type=chunk) - The fair value of convertible notes is another critical estimate. The company uses a Binomial Option Pricing Model with assumptions such as **82% expected volatility for the senior notes** and **22% for the junior notes** as of December 31, 2024[449](index=449&type=chunk)[452](index=452&type=chunk) [ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=104&type=section&id=ITEM%206%3A%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section outlines leadership, compensation, board structure, and employee base, noting Chairman Peter Yu's 48.6% ownership makes it a controlled company - As of December 31, 2024, the company had **1,568 full-time employees**, with **87.4% (1,370) in operations**[497](index=497&type=chunk)[498](index=498&type=chunk) - For the year ended December 31, 2024, the aggregate cash compensation and benefits paid to executive officers was **RMB 3.08 million (US$0.42 million)**[472](index=472&type=chunk) - Chairman Peter Yu beneficially owns approximately **48.6% of the company's outstanding ordinary shares**, qualifying the company as a "controlled company" under Nasdaq rules[216](index=216&type=chunk)[506](index=506&type=chunk) [ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=113&type=section&id=ITEM%207%3A%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) Major shareholders and significant related party transactions are detailed, including agreements and payments with THRI and Cartesian-affiliated entities Transactions with THRI and Affiliates (in millions RMB) | Transaction | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | | Continuing Franchise Fees to THRI | 31.9 | 51.7 | 47.5 | | Upfront Fees to THRI | 23.6 | 27.3 | 10.1 | | Coffee Bean Purchases from TDL Group Corp. | 49.1 | 63.4 | 44.5 | - The company has an Amended and Restated Master Development Agreement with THRI, granting exclusive rights to operate Tim Hortons in mainland China, Hong Kong, and Macau, with a development target of at least **1,700 restaurants by August 31, 2028**[513](index=513&type=chunk) - In June 2024, the company and THRI entered into a Second Amendment to the Master Development Agreement to amend the development schedule and requirements for sub-franchising[516](index=516&type=chunk)[520](index=520&type=chunk) [ITEM 10: ADDITIONAL INFORMATION](index=117&type=section&id=ITEM%2010%3A%20ADDITIONAL%20INFORMATION) Corporate structure, material contracts, and tax considerations are detailed, including share rights, key agreements, and PFIC risk for investors - All outstanding warrants were exchanged for ordinary shares in **June 2023**, simplifying the capital structure. No warrants remain outstanding[345](index=345&type=chunk)[555](index=555&type=chunk) - In June 2024, the company executed a series of transactions including the sale of Popeyes China and a Securities Purchase Agreement for the issuance of new Series A and Series A-1 Convertible Notes to investors including entities controlled by Cartesian and RBI[563](index=563&type=chunk) - The company does not believe it was a Passive Foreign Investment Company (PFIC) for the 2024 taxable year, but notes that this is a factual determination made annually and is subject to uncertainty[609](index=609&type=chunk) [ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=130&type=section&id=ITEM%2011%3A%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risks include foreign currency fluctuations, with a 5% USD depreciation impacting comprehensive loss by RMB 41.5 million, and concentrated credit risk in bank deposits - The company's main market risk is foreign currency risk, as its operations are in RMB but it has transactions in other currencies. A **5% depreciation of the USD against the RMB** would increase comprehensive loss by **RMB 41.5 million (US$5.7 million)** for 2024[620](index=620&type=chunk) - Credit risk is concentrated in bank deposits held in mainland China and Hong Kong, which exceed government-insured limits. As of December 31, 2024, insured deposits amounted to **RMB 12.3 million (US$1.7 million)**[621](index=621&type=chunk) PART II [ITEM 15: CONTROLS AND PROCEDURES](index=131&type=section&id=ITEM%2015%3A%20CONTROLS%20AND%20PROCEDURES) Management concluded internal controls over financial reporting were ineffective as of December 31, 2024, due to three material weaknesses, with remediation plans outlined - Management concluded that internal control over financial reporting was **not effective** as of December 31, 2024[632](index=632&type=chunk) - Three material weaknesses were identified: (i) lack of sufficient competent financial reporting and accounting personnel with U.S. GAAP and SEC reporting knowledge; (ii) inadequate period-end financial closing policies and procedures; and (iii) deficiencies in general information technology controls in the SAP system[636](index=636&type=chunk) - Remediation plans include hiring additional qualified personnel, enhancing training and policies, and engaging specialists to improve processes and system controls[637](index=637&type=chunk) [ITEM 16K: CYBERSECURITY](index=134&type=section&id=ITEM%2016K%3A%20CYBERSECURITY) The company's cybersecurity risk management program is overseen by the board committee, with no material incidents reported to date - The nominating and corporate governance committee of the board of directors is responsible for overseeing cybersecurity risk management[658](index=658&type=chunk) - A data management team at the management level, led by the head of IT and general counsel, handles daily cybersecurity matters and reports to the board committee quarterly[658](index=658&type=chunk) - As of the report date, the company has not experienced any material cybersecurity incidents that have materially affected its business or financial condition[657](index=657&type=chunk) PART III [ITEM 18: FINANCIAL STATEMENTS](index=135&type=section&id=ITEM%2018%3A%20FINANCIAL%20STATEMENTS) Audited consolidated financial statements for 2022-2024 are presented, with the auditor highlighting a going concern uncertainty due to recurring losses and negative cash flow - The independent auditor's report includes a paragraph highlighting substantial doubt about the company's ability to continue as a going concern due to recurring losses, net operating cash outflow, and net current liabilities[673](index=673&type=chunk)[744](index=744&type=chunk) Consolidated Balance Sheet Data (in thousands RMB) | Metric | Dec 31, 2023 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | 458,620 | 417,081 | | Total Assets | 2,215,439 | 1,563,534 | | Total Current Liabilities | 1,395,833 | 1,535,932 | | Total Liabilities | 2,637,868 | 2,396,549 | | Total Shareholders' Deficit | (422,429) | (833,015) | Consolidated Statement of Operations Data (in thousands RMB) | Metric | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | | Total Revenues | 1,011,064 | 1,560,006 | 1,391,158 | | Operating Loss from Continuing Operations | (581,184) | (667,925) | (349,081) | | Net Loss | (744,748) | (872,926) | (408,985) | | Basic and Diluted Loss per Share (RMB) | (28.99) | (28.41) | (12.70) |

Exhibit 99.1 FOURTH QUARTER 2024 HIGHLIGHTS FULL YEAR 2024 HIGHLIGHTS COMPANY MANAGEMENT STATEMENT Mr. Yongchen Lu, CEO & Director of Tims China, commented, "2024 marked a pivotal year for the Company, we solidified our differentiated strategic positioning in "Coffee + Freshly Prepared Food", completed the made-to-order renovation of almost all company owned and operated stores, surpassed 24 million registered loyalty club members, and received over 6,200 individual sub- franchisee applications by year-end. ...