TH International (THCH) - 2023 Q1 - Quarterly Report

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]