TH International (US:THCH) Hua Er Jie Jian Wen·2025-06-25 13:50Core Insights - Tims China is experiencing challenges in the domestic market despite its expansion efforts over the past six years [1] Group 1: Financial Performance - In Q1, Tims China achieved system sales of 376.3 million yuan, a year-on-year increase of 3.5% [2] - The company's actual revenue for Q1 was 301 million yuan, a decline of 9.5% year-on-year, with adjusted EBITDA losses of 29.3 million yuan compared to a loss of 52.3 million yuan in the same period last year [4] - Same-store sales decreased by 7.8%, with a 6.5% drop in single-store sales for direct-operated stores, and a 14% decline in order volume [9][10] Group 2: Store Expansion and Structure - The number of franchise stores has rapidly increased, with a net addition of over 120 stores in the past year, raising their proportion in the store structure from 37% to 44% [3] - In Q1, Tims China closed 7 direct-operated stores while adding 9 franchise stores, bringing the total number of stores to 1,024 [5] - In the previous quarter, there was a net addition of 76 stores, including 12 direct-operated and 64 franchise stores [6] Group 3: Competitive Landscape and Strategy - Tims China is facing intense competition in first- and second-tier cities, with competitors like Starbucks and Manner introducing baked goods and other brands promoting energy bowls [11] - The company is focusing on a differentiated competition strategy by expanding its product categories, particularly with bagels, to maintain an average transaction value of around 30 yuan [7] - Tims China has started to target the lunch market by launching new products such as hot bagel sandwiches and energy bowls [8] Group 4: Future Goals - The CEO has set a goal for Tims China to achieve positive cash flow profitability and same-store sales growth by 2025 [11] - Achieving these goals is considered challenging given the current market conditions, including aggressive pricing competition in the coffee and tea sectors [12]