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) |

Financial Performance - Total revenues for Q4 2024 were RMB332.6 million (USD45.6 million), a 12.0% decrease from RMB377.9 million in Q4 2023[6] - Total revenues for the year ended December 31, 2024, were RMB 1,391,158 thousand, a decrease of 10.8% compared to RMB 1,560,006 thousand in 2023[43] - Revenues from company-owned and operated stores for the year ended December 31, 2024, were RMB 1,188,293 thousand (US$ 162,796), down from RMB 1,389,641 thousand in 2023, representing a decrease of approximately 14.4%[46] Loss and Margin Improvements - Net loss from continuing operations was RMB138.9 million (USD19.0 million) for Q4 2024, a significant reduction from RMB297.4 million in Q4 2023[16] - Net loss attributable to shareholders for the year ended December 31, 2024, was RMB 463,525 thousand, compared to a net loss of RMB 843,054 thousand in 2023, reflecting a reduction of 45%[44] - The adjusted corporate EBITDA for the year ended December 31, 2024, was RMB (96,396) thousand (US$ 13,206), compared to RMB (261,862) thousand in 2023, indicating a reduced loss of approximately 63.2%[47] - The adjusted net loss for the year ended December 31, 2024, was RMB (281,993) thousand (US$ 38,633), a decrease from RMB (448,123) thousand in 2023, reflecting an improvement of about 37.1%[48] - The company-owned and operated store contribution margin improved to 7.4% for the year ended December 31, 2024, compared to 2.1% in 2023[46] Store Operations and Growth - Net new store openings totaled 76 in Q4 2024, with a total of 1,022 system-wide stores at year-end[1] - Total stores increased from 902 to 1,022, with a net new store opening of 120 stores in the last quarter[20] - The number of franchised stores increased from 283 as of December 31, 2023, to 446 as of December 31, 2024[9] Membership and Customer Engagement - Registered loyalty club members reached 24.0 million, representing a 29.7% year-over-year growth[6] - Registered loyalty club members grew from 18,545,000 to 24,045,000, indicating a 29.5% increase in membership[20] - The inaugural "Timsgiving" campaign in China saw participation from over 1,500 customers, promoting community engagement[23] Cash and Assets - Total cash and cash equivalents as of December 31, 2024, were RMB184.2 million (USD25.2 million), down from RMB219.5 million a year earlier[19] - Cash and cash equivalents as of December 31, 2024, were RMB 152,368 thousand, an increase from RMB 202,315 thousand in 2023[40] - Total assets increased to RMB 2,215,439 thousand as of December 31, 2024, compared to RMB 1,563,534 thousand in 2023, representing a growth of 41.7%[41] Operational Efficiency - Full-year adjusted corporate EBITDA margin improved by 9.9 percentage points year-over-year[5] - Company owned and operated store contribution margin improved by 3.9 percentage points to 4.8% in Q4 2024[6] - General and administrative expenses from continuing operations for the year ended December 31, 2024, were RMB (210,323) thousand (US$ 28,814), down from RMB (325,259) thousand in 2023, a reduction of approximately 35.3%[46] Stock and Compliance - The company completed a 1-for-5 reverse stock split, approved by shareholders, to enhance share price stability[24] - Tims China regained compliance with Nasdaq's "Minimum Bid Price Requirement," ensuring its shares are no longer subject to delisting[25] Product Development - Tims China launched the "Light Bagel Sandwich Lunch Box Series" to cater to urban consumers seeking convenient and healthy meal options[26]

Financial Data and Key Metrics Changes - In Q4 2024, the company-owned and operated store contribution margin improved by 5.3 percentage points year-over-year, while the adjusted corporate EBITDA margin improved by 9.9 percentage points year-over-year [11][22]. - Total revenues and system sales for the full year 2024 dropped by 10.8% and 6.2% year-over-year, respectively, primarily due to the closure of underperforming stores and a 15.8% decrease in same-store sales growth [24]. - The average monthly transacting customers reached 3.01 million in Q4 2024, a 1.0% increase from 2.98 million in the same quarter of 2023 [23]. Business Line Data and Key Metrics Changes - The company launched 92 new products in 2024, contributing approximately 25% of total net revenue [12][60]. - The sub-franchisee business revenues increased by 105.3% as the number of franchised stores grew from 283 to 446 [24]. Market Data and Key Metrics Changes - The registered loyalty club members exceeded 24 million, reflecting a 29.7% year-over-year growth [18]. - The company entered 82 cities by year-end 2024, showcasing its market penetration strategy [17]. Company Strategy and Development Direction - The company aims to open at least 200 stores in 2025, primarily through sub-franchising, while maintaining a focus on operational excellence and profitability [31]. - The strategic focus remains on product innovation, particularly in healthy food offerings, to differentiate from competitors and avoid price wars [64]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving corporate EBITDA breakeven in 2025, emphasizing the importance of sub-franchising for capital efficiency [41]. - The company noted improving trends in same-store sales growth since October 2024, with a goal of achieving positive growth in 2025 [54]. Other Important Information - The company has maintained a stable total drawable bank facility of approximately RMB 400 million and is in the process of obtaining new bank facilities [36]. - The total cash and cash equivalents as of December 31, 2024, were RMB 184.2 million, down from RMB 219.5 million in 2023 [28]. Q&A Session Summary Question: What is the current state of the balance sheet and strategies for managing cash flow? - The total cash and cash equivalents balance was approximately RMB 184 million, with stable bank facilities and improved profitability at both store and corporate levels [36][38]. Question: How are comp store sales trending in 2025? - Same-store sales growth has shown improvement since October 2024, with a goal to achieve positive growth in 2025 [54]. Question: How is the company planning on driving product innovation in 2025? - The company introduced 92 new products in 2024 and will continue to focus on freshness and healthiness in product offerings [60][64]. Question: Can you comment on the liquidity position? - As of the end of 2024, total cash and cash equivalents were about RMB 184 million, with good liquidity expected from potential new bank facilities [56][57].

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, reported its unaudited financial results for Q4 and full year 2024, highlighting significant operational improvements and strategic growth initiatives [1][4][5]. Financial Performance - Total revenues for Q4 2024 were RMB332.6 million (USD45.6 million), a decrease of 12.0% from RMB377.9 million in Q4 2023 [6][8]. - Full-year total revenues were RMB1,391.2 million (USD190.6 million), representing a 10.8% decrease from 2023 [6]. - Company owned and operated store contribution margin improved by 3.9 percentage points to 4.8% in Q4 2024 compared to the same quarter of 2023 [5][6]. Operational Highlights - The company opened 76 new stores in Q4 2024, bringing the total to 1,022 system-wide stores by year-end [1][6]. - Registered loyalty club members reached 24.0 million, reflecting a year-over-year growth of 29.7% [1][6]. - The company achieved a significant increase in company owned and operated store contribution, which rose by 353.1% to RMB13.0 million (USD1.8 million) in Q4 2024 [6][8]. Cost Management - The company reported a decrease in food and packaging costs by 26.5% in Q4 2024, benefiting from supply chain efficiencies [9][12]. - Payroll and employee benefits expenses decreased by 26.7% in Q4 2024, attributed to optimized staffing arrangements [9][12]. - Marketing expenses were reduced by 35.0% in Q4 2024, reflecting cost optimization measures [12][13]. Strategic Initiatives - The CEO emphasized the company's strategic positioning in "Coffee + Freshly Prepared Food" and the completion of renovations in nearly all company-owned stores [4][5]. - The company received over 6,200 sub-franchisee applications by year-end, indicating strong interest in its franchise model [4]. - Tims China launched new product offerings and marketing campaigns to enhance customer engagement and brand presence [24][27]. Future Outlook - The CFO expressed confidence in achieving full-year corporate EBITDA breakeven, focusing on improving store unit economics and operational efficiencies [7][5]. - The company aims to further enhance its supply chain capabilities and accelerate sub-franchising expansion [7].

Company Participation in Conferences - TH International Limited, the exclusive operator of Tim Hortons coffee shops in China, will participate in the BofA Securities 2025 Consumer & Retail Conference on March 11-12, 2025, with a fireside chat scheduled for March 12 at 10:30am ET [1] - The company will also attend the UBS Global Consumer and Retail Conference on March 13, 2025, with a fireside chat at 2:00pm ET [2] - Key representatives, including Greg Armstrong and Gemma Bakx, will meet with investors during both conferences [2] Company Overview - TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau, and was founded by Cartesian Capital Group and Tim Hortons Restaurants International, a subsidiary of Restaurant Brands International [2] - The company's operational 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, is celebrating its sixth anniversary with significant achievements, including over 1,000 stores across 82 cities and a NASDAQ listing [1][9] - The company is launching new products and promotions to commemorate its anniversary and adapt to local consumer preferences [2][8] Product Innovations - Tims China is reintroducing three classic donuts with 60% less sugar, maintaining their original taste, and offering a promotion of a free Classic Original Donut with any selected coffee purchase during afternoon tea hours [3][5] - The "Rich & Smooth Latte Series" has been introduced, featuring 40% more coffee beans and a blend of premium Arabica coffee with cold-drip creamy milk, tailored for Chinese consumers [7] Market Positioning - Tims China has established a unique "Coffee + Warm Food" strategy, differentiating itself in the competitive coffee market and appealing to evolving consumer preferences [1][8] - The company has garnered a loyal customer base, with over 24 million Club members, reflecting its successful adaptation to the Chinese market [8]

Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, has launched the "Light Bagel Sandwich Lunch Box Series" to enhance its offerings of high-quality, convenient meals targeting urban consumers seeking healthy options [1][8] Product Offering - The Lunch Box series includes a combination of a bagel sandwich, a fresh vegetable salad, and a healthy beverage, available nationwide starting February 18 [2] - Customers can choose from eight bagel sandwich varieties, five side dishes, and eleven beverage options, allowing for customization based on personal tastes and nutritional preferences [2] Pricing and Discounts - The starting price for the Lunch Box is RMB 25.8, especially attractive with a 40% discount available through the "Chibaobao Card," making it a cost-effective option for consumers [3] Health and Quality Focus - The Lunch Box series emphasizes "light and low-calorie" options, with all ingredients meeting strict quality and calorie control standards [4] - Beverages in the series adhere to a "5-Zero" commitment, ensuring no non-dairy creamer, artificial creamer, hydrogenated vegetable oils, trans fats, or instant tea powder [4] Nutritional Composition - The bagel sandwiches feature high-fiber bagels and premium proteins such as chicken breast, tuna, and beef, with specific options like Avocado Chicken and Teriyaki Chicken Thigh [5] - The salads consist of seasonal fresh vegetables, and beverage choices include Americano coffee and low-calorie lemon water, promoting a balanced and satisfying meal [5] Convenience and Packaging - The Lunch Box is designed for both dine-in and takeaway, catering to the needs of urban professionals for flexibility [6] Market Potential - The CEO of Tims China expressed excitement about the market potential of the new Lunch Box series, highlighting its role in expanding the lunch menu and meeting diverse consumer needs [8]