NEW YORK, Feb. 26, 2024 /PRNewswire/ -- Argus Research, an independent investment research firm, has launched Equity Research Report coverage on TH International Limited (NasdaqCM: THCH). Click Here to view full Argus Equity Research Report. COMPANY HIGHLIGHTS: Excerpts (as conveyed by Argus Analyst Steve Silver) include: TH International: Expanding China's Fast Growing Coffee Market White Space for Growth: THCH has been expanding in China's Fast Growing Coffee Market since 2019. We see the market for coff ...

Financial Performance - Total revenues reached a record-high of RMB436.4 million (USD59.8 million), representing a 42.7% year-over-year growth from RMB305.7 million in Q3 2022[2]. - Adjusted store EBITDA was RMB29.3 million (USD4.0 million), a 91.5% increase from RMB15.3 million in Q3 2022, with an adjusted store EBITDA margin of 7.5%, up 2.2 percentage points year-over-year[2][3]. - Revenues from company-owned and operated store sales were RMB390.8 million (USD53.6 million), a 34.8% increase from RMB290.0 million in Q3 2022[5]. - Other revenues surged to RMB45.6 million (USD6.3 million), marking a 190.3% increase from RMB15.7 million in Q3 2022, driven by e-commerce expansion and increased franchise fees[6]. - Total revenues increased to RMB 436,402, representing a 43% growth compared to RMB 305,719 in the same period last year[35]. - Revenues from company-owned and operated stores reached RMB 390,798, up 35% from RMB 290,009 year-over-year[35]. Store Expansion - Net new store openings totaled 63, resulting in 763 system-wide stores at quarter-end, with 589 company-owned and operated stores[2][5]. - Total stores increased from 390 in Dec 2021 to 763 as of Sep 2023, representing a growth of 95.9%[18]. - The number of franchised stores rose from 17 in Dec 2021 to 174 in Sep 2023, marking a growth of 923.5%[18]. - The company plans to continue expanding its store network and optimizing its cost structure to achieve profitable growth[28]. Membership and Customer Engagement - Loyalty club membership grew to 16.9 million, reflecting a 90.3% year-over-year increase[2]. - Registered loyalty club members grew from 5,969,000 in Dec 2021 to 16,898,000 in Sep 2023, an increase of 182.5%[18]. - Same-store sales growth for company-owned and operated stores was 20.4% for Jun 2023, a significant recovery from -7.1% in Dec 2022[18]. Losses and Financial Challenges - Operating loss was RMB159.7 million (USD21.9 million) for Q3 2023, compared to RMB150.5 million in the same quarter of 2022[14]. - Adjusted net loss was RMB107.9 million (USD14.8 million) for Q3 2023, compared to RMB87.5 million in Q3 2022, with an adjusted net loss margin of negative 24.7%[15]. - The company reported accumulated losses of 1,944,341,000 RMB as of Dec 31, 2022, which reflects a loss increase of 266,494,000 RMB[30]. - Net loss attributable to shareholders was RMB 160,603, compared to a loss of RMB 194,381 in the same quarter last year[38]. - Total comprehensive loss for the quarter was RMB 166,568, compared to RMB 212,342 in the same period last year[38]. Cash and Assets - As of September 30, 2023, total cash and cash equivalents were RMB461.8 million (USD63.3 million), down from RMB611.5 million as of December 31, 2022[17]. - Total current assets decreased to RMB 703,756 from RMB 796,813, a decline of approximately 12%[32]. - Cash and cash equivalents increased significantly to RMB 461,755 from RMB 239,077, a growth of 93%[32]. - Cash at the end of the period increased from RMB 382,448 in 2022 to RMB 461,755 in September 2023, marking a rise of about 20.7%[40]. - Total assets as of September 30, 2023, were RMB 2,607,218, a slight decrease from RMB 2,642,010 at the end of 2022[33]. Operational Efficiency - Adjusted store EBITDA improved from a loss of 25,011,000 RMB in Mar 2022 to a profit of 29,310,000 RMB in Sep 2023[18]. - Adjusted store EBITDA margin increased from -11.9% in Mar 2022 to 7.5% in Sep 2023, indicating improved operational efficiency[18]. - General and administrative expenses for the three months ended September 30, 2023, totaled RMB 71,071, with an adjusted percentage of total revenue at 14.5%[43]. - The adjusted general and administrative expenses for the nine months ended September 30, 2023, were RMB 275,140, with a percentage of total revenue at 15.7%[43]. Future Outlook - Forward-looking statements indicate potential for further growth and operational improvements, subject to market conditions[28].

[First Quarter 2023 Highlights](index=1&type=section&id=FIRST%20QUARTER%202023%20HIGHLIGHTS) Tims China reported strong growth in Q1 2023, with total revenues increasing 49.8% to RMB 336.5 million and achieving positive adjusted store EBITDA of RMB 6.0 million Q1 2023 Key Financial and Operational Metrics | Metric | Q1 2023 | Change (YoY) | | :--- | :--- | :--- | | Total Revenues | RMB 336.5 million | ▲ 49.8% | | Net New Store Openings | 31 | - | | Total System-Wide Stores | 648 | - | | Registered Loyalty Club Members | 12.4 million | ▲ 79.3% | | Adjusted Store EBITDA | RMB 6.0 million | From loss of RMB 25.0 million | | Adjusted Store EBITDA Margin | 1.9% | ▲ 13.8 p.p. | | Same-Store Sales Growth (Company Owned) | 8.0% | - | [Company Management Statement](index=1&type=section&id=COMPANY%20MANAGEMENT%20STATEMENT) Management highlighted record revenue and positive adjusted store EBITDA, driven by post-Chinese New Year recovery and strategic initiatives like 'Coffee Plus' and accelerated franchising - Same-store sales growth for company-owned stores showed strong recovery after January, with **17.1% growth in February** and **19.4% in March 2023**[3](index=3&type=chunk) - The company is accelerating the development of franchised stores, especially the compact 'Tims Express' format with partner Sinopec Easy Joy, and is on track to exceed **1,000 system-wide stores by the end of 2023**[4](index=4&type=chunk) - The 'Coffee Plus' strategy is proving successful, with the percentage of orders including food increasing from **41.0% in Q1 2022 to 44.2% in Q1 2023**[4](index=4&type=chunk) - Digital capabilities are being strengthened to capture growing delivery and takeaway demand, which saw a **74.2% increase in orders YoY**; dine-in customers also increased by **125.8% from March 2022 to March 2023** following the end of 'zero-COVID' measures[4](index=4&type=chunk) [Detailed Financial Results (Q1 2023)](index=3&type=section&id=FIRST%20QUARTER%202023%20FINANCIAL%20RESULTS) Tims China's Q1 2023 total revenues grew 49.8% to RMB 336.5 million, driven by network expansion and same-store sales growth, while improving operational efficiency despite an overall net loss [Revenues](index=3&type=section&id=Revenues) Total revenues increased by 49.8% year-over-year to RMB 336.5 million, driven by strong growth in company-owned stores and a surge in other revenues from franchised store expansion Q1 2023 Revenue Breakdown (vs. Q1 2022) | Revenue Stream | Q1 2023 (RMB) | Q1 2022 (RMB) | Growth (YoY) | | :--- | :--- | :--- | :--- | | Company Owned & Operated Stores | 310.5 million | 211.0 million | ▲ 47.1% | | Other Revenues | 26.0 million | 13.6 million | ▲ 91.2% | | **Total Revenues** | **336.5 million** | **224.7 million** | **▲ 49.8%** | [Costs and Expenses](index=3&type=section&id=Costs%20and%20Expenses) Company operated store costs rose 24.6% to RMB 336.5 million, with significant efficiency gains in payroll and rent as a percentage of revenue, despite higher food and packaging costs Company Owned Store Costs as % of Store Revenue | Cost Category | Q1 2023 (% of Revenue) | Q1 2022 (% of Revenue) | Change (p.p.) | | :--- | :--- | :--- | :--- | | Food and packaging | 35.9% | 33.0% | ▲ 2.9 p.p. | | Rental and property management | 23.0% | 27.7% | ▼ 4.7 p.p. | | Payroll and employee benefits | 23.5% | 34.0% | ▼ 10.5 p.p. | | Other operating expenses | 8.1% | 14.1% | ▼ 6.0 p.p. | - Adjusted general and administrative expenses as a percentage of total revenues decreased by **2.5 percentage points** from **22.5% in Q1 2022 to 20.0% in Q1 2023**[12](index=12&type=chunk) [Profitability and Earnings Per Share](index=4&type=section&id=Profitability%20and%20Earnings%20Per%20Share) The company's operating loss slightly narrowed, and adjusted profitability metrics significantly improved, with adjusted net loss per share improving to RMB 0.84 Q1 2023 Profitability Metrics (vs. Q1 2022) | Metric | Q1 2023 (RMB) | Q1 2022 (RMB) | | :--- | :--- | :--- | | Operating Loss | (130.4 million) | (134.9 million) | | Net Loss | (174.5 million) | (151.3 million) | | Adjusted Corporate EBITDA | (74.6 million) | (83.5 million) | | Adjusted Net Loss | (117.1 million) | (116.7 million) | | Adjusted Basic & Diluted EPS | (0.84) | (0.93) | [Liquidity](index=5&type=section&id=Liquidity) The company maintained a stable liquidity position with RMB 613.6 million in cash and short-term investments as of March 31, 2023, supported by bank borrowings - Total cash, cash equivalents, and short-term investments were **RMB 613.6 million (USD 89.3 million)** as of March 31, 2023[16](index=16&type=chunk) [Key Operating Data](index=5&type=section&id=KEY%20OPERATING%20DATA) The company significantly expanded its store network to 648, with rapid growth in franchised stores, and achieved positive adjusted store EBITDA and strong loyalty club membership growth Key Operating Data Trends | Metric | Mar 31, 2023 | Mar 31, 2022 | Growth (YoY) | | :--- | :--- | :--- | :--- | | Total stores | 648 | 424 | ▲ 52.8% | | Company owned and operated stores | 551 | 403 | ▲ 36.7% | | Franchised stores | 97 | 21 | ▲ 361.9% | | Same-store sales growth (company owned) | 8.0% | 5.5% | ▲ 2.5 p.p. | | Registered loyalty club members (thousands) | 12,386 thousand | 6,907 thousand | ▲ 79.3% | [Supplementary Information](index=5&type=section&id=Supplementary%20Information) This section defines key performance indicators and non-GAAP measures used by management to evaluate performance, alongside a recent warrant exchange offer to simplify capital structure [Key Definitions & Non-GAAP Measures](index=5&type=section&id=KEY%20DEFINITIONS%20%26%20USE%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) The company defines key operating metrics and non-GAAP financial measures to provide investors with a clearer understanding of its performance and for internal decision-making - The report defines key metrics including: Same-store sales growth, Net new store openings, Adjusted store EBITDA, Adjusted corporate EBITDA, and Adjusted net loss[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - The company uses non-GAAP measures to enhance investors' understanding of financial performance and for internal decision-making, with reconciliations provided to the nearest U.S. GAAP measures[23](index=23&type=chunk)[24](index=24&type=chunk) [Recent Business Developments](index=6&type=section&id=RECENT%20BUSINESS%20DEVELOPMENTS) On May 12, 2023, Tims China initiated a warrant exchange offer to simplify its capital structure and mitigate potential dilution, providing greater flexibility for future financing - In May 2023, the company commenced a warrant exchange offer to simplify its capital structure and reduce potential dilution[22](index=22&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2023 detail the company's financial position, reflecting a net loss on increased revenues and a net increase in cash from financing activities [Unaudited Condensed Consolidated Balance Sheets](index=10&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2023, total assets stood at RMB 2.68 billion, with total liabilities increasing to RMB 2.58 billion, primarily due to higher short-term bank borrowings and derivative financial liabilities Balance Sheet Summary (as of Mar 31, 2023 vs. Dec 31, 2022) | Account | Mar 31, 2023 (RMB) | Dec 31, 2022 (RMB) | | :--- | :--- | :--- | | Total Current Assets | 811.6 million | 796.8 million | | Total Assets | 2,679.4 million | 2,642.0 million | | Total Current Liabilities | 1,260.8 million | 1,318.3 million | | Total Liabilities | 2,577.4 million | 2,531.7 million | | Total Shareholders' Equity | 102.0 million | 110.3 million | [Unaudited Condensed Consolidated Statements of Operations](index=12&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q1 2023, total revenues increased 49.8% to RMB 336.5 million, but total costs and expenses led to an operating loss of RMB 130.4 million and a net loss of RMB 174.5 million Statement of Operations Summary (Q1 2023 vs. Q1 2022) | Account | Q1 2023 (RMB) | Q1 2022 (RMB) | | :--- | :--- | :--- | | Total Revenues | 336.5 million | 224.7 million | | Total Costs and Expenses, net | (466.9 million) | (359.6 million) | | Operating Loss | (130.4 million) | (134.9 million) | | Net Loss | (174.5 million) | (151.3 million) | | Net Loss attributable to shareholders | (174.9 million) | (150.6 million) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q1 2023, net cash used in operating activities improved to RMB 85.4 million, with a significant net cash provided by financing activities of RMB 164.0 million, resulting in a net increase in cash of RMB 125.5 million Cash Flow Summary (Q1 2023 vs. Q1 2022) | Activity | Q1 2023 (RMB) | Q1 2022 (RMB) | | :--- | :--- | :--- | | Net cash used in operating activities | (85.4 million) | (119.1 million) | | Net cash provided by/(used in) investing activities | 50.2 million | (124.3 million) | | Net cash provided by financing activities | 164.0 million | 64.7 million | | **Net increase/(decrease) in cash** | **125.5 million** | **(181.0 million)** | [Reconciliation of Non-GAAP Measures](index=14&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURES) This section provides detailed reconciliations of GAAP measures to the company's non-GAAP metrics, showing adjustments for non-cash and non-recurring items to reflect core operational results [Adjusted Store EBITDA Reconciliation](index=14&type=section&id=Adjusted%20store%20EBITDA) Adjusted Store EBITDA for Q1 2023 was RMB 6.0 million, a significant improvement from a loss in Q1 2022, resulting in a positive Adjusted Store EBITDA Margin of 1.9% Reconciliation to Adjusted Store EBITDA (Q1 2023) | Account | Amount (RMB) | | :--- | :--- | | Fully-burdened gross loss - company owned stores | (35,912 thousand) | | Add: Store depreciation and amortization | 32,974 thousand | | Add: Store pre-opening expenses | 8,940 thousand | | **Adjusted Store EBITDA** | **6,002 thousand** | | **Adjusted Store EBITDA Margin** | **1.9%** | [Adjusted Corporate EBITDA Reconciliation](index=15&type=section&id=Adjusted%20corporate%20EBITDA) Adjusted Corporate EBITDA for Q1 2023 was a loss of RMB 74.6 million, an improvement from the prior year, calculated by adjusting operating loss for non-cash and non-recurring items Reconciliation to Adjusted Corporate EBITDA (Q1 2023) | Account | Amount (RMB) | | :--- | :--- | | Operating loss | (130,417 thousand) | | Add: Store pre-opening expenses | 8,940 thousand | | Add: Depreciation and amortization | 38,357 thousand | | Add: Other adjustments (SBC, Impairment, etc.) | 8,475 thousand | | **Adjusted Corporate EBITDA** | **(74,645 thousand)** | | **Adjusted Corporate EBITDA Margin** | **-22.2%** | [Adjusted Net Loss Reconciliation](index=15&type=section&id=Adjusted%20net%20loss) Adjusted Net Loss for Q1 2023 was RMB 117.1 million, nearly flat year-over-year, with the Adjusted Net Loss Margin showing substantial improvement to -34.8% Reconciliation to Adjusted Net Loss (Q1 2023) | Account | Amount (RMB) | | :--- | :--- | | Net loss | (174,451 thousand) | | Add: Adjustments (Pre-opening, SBC, Fair Value Changes, etc.) | 57,348 thousand | | **Adjusted Net loss** | **(117,103 thousand)** | | **Adjusted Net loss Margin** | **-34.8%** |

Table of Contents | --- | |-------------------------------------------------------------------------------------| | UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 | | FORM 20-F | (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SE ...

Financial Performance - Total revenues for Q4 2022 were RMB301.5 million (USD43.7 million), a 34.6% increase year-over-year[2] - Total revenues for the full year 2022 were RMB1,011.1 million (USD146.6 million), a 57.2% increase from 2021[4] - Total revenues for the year ended December 31, 2022, were RMB 1,011,064,000, compared to RMB 643,372,000 in 2021, marking a year-over-year increase of 57.1%[36] - For the three months ended December 31, 2022, revenues from company-owned and operated stores were RMB 272,509, an increase of 27.6% compared to RMB 213,653 for the same period in 2021[40] - The adjusted store EBITDA for the year ended December 31, 2022, was RMB (40,676), compared to RMB 19,776 for the year ended December 31, 2021, indicating a significant decline[40] - The adjusted corporate EBITDA margin for the year ended December 31, 2022, was -30.4%, compared to -29.1% for the year ended December 31, 2021[42] Store Expansion - The company opened 131 net new stores in Q4 2022, reaching a total of 617 system-wide stores by year-end[2][4] - The company plans to surpass 1,000 system-wide stores by year-end 2023 as part of its growth strategy[5] - Total stores increased from 159 in Mar 2021 to 617 in Dec 2022, representing a growth of 287%[20] - The company opened its 600th coffee shop in January 2023, marking significant expansion in its store network[25] - The total number of franchised stores increased from 9 in Mar 2021 to 70 in Dec 2022, a growth of 677%[20] Membership and Sales Growth - Registered loyalty club members grew to 11.3 million by year-end 2022, representing an 88.5% increase year-over-year[4] - Same-store sales growth for company-owned and operated stores was 17.1% in February 2023, indicating a recovery trend[1][7] - Same-store sales growth for company-owned and operated stores was -7.1% for the three months ended Dec 31, 2022, compared to 8.8% in the same period of 2021[20] - The percentage of orders with food increased from 38.5% in Q4 2021 to 47.1% in Q4 2022, reflecting the success of the 'Coffee Plus' strategy[5] - The company reported a same-store sales growth of 8.1% for the three months ended Sep 30, 2022, indicating recovery from previous declines[20] Financial Position and Losses - Net loss attributable to shareholders of the Company for 2022 was RMB 742,645,000, compared to RMB 381,721,000 in 2021, indicating a significant increase in losses[36] - The company reported a comprehensive loss attributable to shareholders of RMB 761,388,000 for the year ended December 31, 2022, compared to RMB 385,159,000 in 2021[36] - Adjusted net loss attributable to shareholders for the year ended December 31, 2022, was RMB 456,794, compared to RMB 263,013 for the year ended December 31, 2021, reflecting a 73.7% increase[44] - The net cash used in operating activities for the year ended December 31, 2022, was RMB (286,928), compared to RMB (244,966) for the year ended December 31, 2021, reflecting an increase in cash outflow[38] - Accumulated losses grew from RMB 637,528,000 in 2021 to RMB 1,380,173,000 in 2022, indicating a worsening financial position[34] Assets and Liabilities - Total assets increased from RMB 1,284,893,000 in 2021 to RMB 2,642,010,000 in 2022, representing a growth of 106%[34] - Total current liabilities rose from RMB 567,290,000 in 2021 to RMB 1,318,262,000 in 2022, an increase of 132.5%[34] - Total non-current liabilities increased from RMB 378,508,000 in 2021 to RMB 1,213,444,000 in 2022, reflecting a growth of 220.5%[34] - Cash and short-term investments decreased from RMB 390,837,000 and RMB 0 in 2021 to RMB 239,077,000 and RMB 372,376,000 in 2022, respectively[34] Shareholder Information - The number of ordinary shares issued and outstanding increased from 124,193,929 shares in 2021 to 140,938,555 shares in 2022[34] - The weighted average shares outstanding increased from 124,193,929 in Q4 2021 to 139,179,231 in Q4 2022, indicating potential dilution of shares[44] - Adjusted basic and diluted net loss per share remained stable at (0.73) for both Q4 2021 and Q4 2022, suggesting consistent performance on a per-share basis despite overall losses[44] Expenses and Financial Strategies - Adjusted general and administrative expenses for the three months ended December 31, 2022, were RMB (55,315), a decrease from RMB (66,460) for the same period in 2021[41] - Share-based compensation expenses rose to RMB 11,145 in Q4 2022 from zero in Q4 2021, indicating the introduction of new compensation strategies[44] - Changes in fair value of ESA derivative liabilities increased significantly to RMB 116,666 in Q4 2022 from zero in Q4 2021, highlighting a shift in financial strategy[44] - Loss on disposal of property and equipment was recorded at RMB 8,835 for the year ended December 31, 2022, compared to RMB 1,546 for the year ended December 31, 2021, reflecting increased asset disposals[44] - The company reported a significant increase in commission fees for Cantor shares, amounting to RMB 21,521 for the year ended December 31, 2022, compared to zero in the previous year, indicating new financial arrangements[44]

Revenue Growth - Total revenues increased by 67.9% to RMB305.7 million (USD43.0 million) for Q3 2022, compared to RMB182.1 million in Q3 2021[1] - Total revenues for the three months ended September 30, 2022, increased to RMB 305,719, representing a 68% growth compared to RMB 182,131 for the same period in 2021[31] - For the three months ended September 30, 2022, revenues from company-owned and operated stores increased to RMB 290,009, up from RMB 173,703 in the same period of 2021, representing a growth of 67%[36] Store Expansion - Net new store openings totaled 46, bringing system-wide stores to 486 as of September 30, 2022, up from 440 as of June 30, 2022[2] - Total stores increased from 159 on Mar 31, 2021, to 486 on Sep 30, 2022, representing a growth of 205%[17] - The number of company-owned and operated stores increased from 150 on Mar 31, 2021, to 454 on Sep 30, 2022, reflecting a growth of 202%[17] - The company opened its 500th coffee shop on October 17, 2022, highlighting its expansion strategy in new cities across China[21] Same-Store Sales Growth - Same-store sales growth for company-owned and operated stores was 7.5% for Q3 2022, compared to 6.6% in Q3 2021[2] - Same-store sales growth for systemwide stores was 8.1% for Sep 30, 2022, compared to 41.6% for Mar 31, 2021, indicating a significant decline in growth rate[17] Loyalty Program - Registered loyalty club members reached 8.9 million, representing an 85.8% year-over-year growth from 4.8 million[2] - Registered loyalty club members grew from 2,947,000 on Mar 31, 2021, to 8,862,000 on Sep 30, 2022, an increase of 200%[17] Financial Performance - Net loss was RMB195.0 million (USD27.4 million) for Q3 2022, compared to RMB113.1 million in Q3 2021[14] - The operating loss for the nine months ended September 30, 2022, was RMB 449,822, compared to an operating loss of RMB 245,118 for the same period in 2021, indicating a deterioration in performance[32] - The net loss attributable to shareholders of the Company for the nine months ended September 30, 2022, was RMB 518,778, compared to RMB 243,390 for the same period in 2021, indicating a substantial increase in losses[32] - The company reported a basic and diluted loss per ordinary share of RMB 4.17 for the nine months ended September 30, 2022, compared to RMB 2.02 for the same period in 2021[32] - Total comprehensive loss for the nine months ended September 30, 2022, was RMB 548,523, compared to RMB 246,698 for the same period in 2021, indicating a significant increase in comprehensive losses[32] Cash and Investments - Total cash and cash equivalents and short-term investments increased to RMB759.9 million (USD106.8 million) as of September 30, 2022, up from RMB285.1 million as of June 30, 2022[16] - Cash and short-term investments as of September 30, 2022, totaled RMB 759,939, a decrease from RMB 390,837 in December 2021[29] - The cash at the end of the period for the three months ended September 30, 2022, was RMB 382,448, significantly higher than RMB 134,399 at the beginning of the period[34] - The company incurred net cash used in investing activities of RMB 431,081 for the three months ended September 30, 2022, compared to RMB 99,767 in the same period of 2021, indicating increased investment activity[34] Expenses - Company operated store costs and expenses were RMB299.9 million (USD42.2 million), a 36.3% increase from RMB219.9 million in Q3 2021[8] - General and administrative expenses rose by 122.0% to RMB109.6 million (USD15.4 million) in Q3 2022, primarily due to increased payroll and share-based compensation[12] - Adjusted general and administrative expenses for the three months ended September 30, 2022, were RMB 48,370, a decrease from RMB 49,364 in the same period of 2021[37] Profitability Metrics - Adjusted store EBITDA margin increased by 4.1 percentage points to 6.7% in Q3 2022, up from 2.6% in Q3 2021[3] - Adjusted store EBITDA was RMB19.4 million (USD2.7 million) for Q3 2022, a 336.6% increase from RMB4.4 million in Q3 2021[2] - Adjusted store EBITDA for Sep 30, 2022, was RMB 19,352,000, a recovery from a loss of RMB 40,279,000 in Jun 30, 2022[17] - The adjusted corporate EBITDA margin improved to -15.6% for the three months ended September 30, 2022, compared to -31.2% in the same period of 2021[39] - The adjusted net loss margin for the nine months ended September 30, 2022, was -50.5%, compared to -41.6% for the same period in 2021, reflecting a decline in overall profitability[40] Future Strategies - Future growth strategies include geographic expansion, new product development, and enhancing customer loyalty through partnerships and innovative offerings[24] Partnerships and Product Development - A partnership with Freshippo was announced on November 18, 2022, to introduce co-branded coffee products in over 300 stores across 27 cities[22] - The company launched two co-branded ready-to-drink coffee products with Sinopec's Easy Joy on September 7, 2022, enhancing its product offerings[21]