FY2025 Interim Revenue Grows 1.2% Despite Market Headwinds Profit for the Period Reaches HK$36.1 million

14th November 2024

Results Highlights

• The Group’s revenue grew by 1.2% to HK$1,403.5 million, despite challenging environment.
• Profit for the Period amounted to HK$36.1 million.
• Hong Kong remained the core profit contributor to the Group, generating an operating profit⁽¹⁾ of HK$223.8 million.
• Overseas franchise is set to realise with 3 store debuts in Australia in 2H2025, along with a newly signed license agreement for Malaysian entry.
• The Group is consolidating Mainland China and Singapore operations to improve overall profitability.
• The Board has resolved to declare an interim dividend of HK1.35 cents per share (1H2024: 3.0 cents), representing a dividend payout ratio of 50.0% (1H2024: 49.2%).

Notes:

1. This is a non-HKFRS measure, defined as revenue less restaurant and central kitchen costs and excluding costs attributable to headquarters and office.

(Hong Kong, 14 November 2024) – Tam Jai International Co. Limited (“TJI” or the “Company”, and together with its subsidiaries, the “Group”; HKEX stock code: 2217), one of the leading and renowned restaurant groups in Hong Kong, today announced its interim results for the six months ended 30 September 2024 (‘‘1H2025’’ or the “Period”).

Despite a challenging operating environment in its core markets characterised by economic slowdowns and intensified competitions, the Group achieved a modest 1.2% growth in revenue year-on-year to HK$1,403.5 million in 1H2025 (1H2024: HK$1,387.4 million) and recorded a net profit of HK$36.1 million in 1H2025 (1H2024: HK$81.6 million), with an extensive network of self-operated restaurants expanding to 235 outlets across Hong Kong, Mainland China, Singapore and Japan.

In its core market of Hong Kong, as the Group timely implemented a series of measures to attract footfall and stimulate customer spending, and continued to expand its restaurant network during the Period, its revenue from restaurant operations in Hong Kong grew modestly by 1.7% year-on-year to HK$1,318.1 million in 1H2025. Operating profit in Hong Kong in 1H2025 reached HK$223.8 million.

With respect to its business outside of Hong Kong, Japan has continued to achieve notable revenue growth and significant loss reduction. As for the Mainland China and Singapore operations, the Group believes it is the right time to consolidate the two businesses, aiming at improving operational performance and accelerating their paths towards breakeven, though one-off closure expenses may be incurred in the second half of the financial year ending 31 March 2025 (“2H2025”).

The board of directors of the Company (the “Board”) has resolved to declare an interim dividend of HK1.35 cents per share of the Company for 1H2025 (1H2024: HK3.0 cents), representing a payout ratio of approximately 50.0% (1H2024: 49.2%).

Mr. Daren Lau, Chairman, Executive Director and Chief Executive Officer of TJI, said, “Our efforts in creating better values for our customers on our products offerings and services have successfully retained our customers under an adverse trading environment. This has proven our resilience and our commitments to our stakeholders. The highly sought-after products and brands have enabled us to further expand our restaurant network in Hong Kong and achieve revenue growth despite the weak consumption sentiment. In terms of our overseas development, we have set our sights on improving overall profitability by consolidating our self-operated operations in Mainland China and Singapore, while our franchise partnerships in new markets such as Australia, Malaysia and the Philippines offer exciting opportunities for future expansion and growth.”

Agility and resilience demonstrated in growing Hong Kong network

In 1H2025, the Group had to contend with a challenging business environment in Hong Kong, where the general public became more cautious in their consumption with an increasing number of local residents to Mainland China and overseas for leisure.

The Group launched more value offerings to address the growing demand for value-for-money dining options. Besides, the Group revamped its breakfast menus and expanded their availability to additional restaurants, while also launching more dinner sets, all aimed at stimulating consumption during periods with relatively low business volume. In addition, the Group’s intensified customers relationship management (“CRM”) campaigns led to notable increases in membership base, active users, and revenue generated from its CRM system in 1H2025.

To advance its multi-brand strategy, the Group introduced the renowned Japanese beef rice brand, “Yakiniku Yamagyu”, to Hong Kong through a licensing agreement with its controlling shareholder, Toridoll Holdings Corporation (“Toridoll Japan”). Including this store debut in April 2024, the Group’s Hong Kong restaurant network experienced nine net openings during the Period, bringing the total number of self-operated restaurants to 198 as at 30 September 2024.

Outlook: Foster steady development in Hong Kong

As the Hong Kong food and beverage (“F&B”) industry is expected to remain under the cloud of various unfavourable factors in the near term, the Group will fortify the value-for-money positioning of its two flagship brands by introducing more combination value offerings to attract customers.

Despite facing a challenging environment, the Group has successfully expanded into a new trade area by opening its first university campus-based outlet during the Period, paving the way for further expansion opportunities. In 2H2025, the Group will prudently expand its store network, targeting to open a total of five stores under the two flagship brands, “TamJai Yunnan Mixian” and “TamJai SamGor Mixian”.

The Group will also leverage a multi-brand strategy to capture a greater share of the fast-casual segment. Following the grant of the franchise rights to the Japanese udon noodle brand “Marugame Seimen” by Toridoll Japan to the Group in 2023, the Group has progressed further by acquiring its nine existing restaurants in Hong Kong in early November, integrating them into its self-operating network.

Meanwhile, the overwhelmingly positive response to the ‘‘Yakiniku Yamagyu” brand since its debut in April 2024 bodes well for the prospect of its further expansion in Hong Kong. The great improvements of the “Marugame Seimen” business and the initial success of “Yakiniku Yamagyu” have solidified the new arm in realising faster expansion. The Group plans to open a total of four new restaurants under the “Marugame Seimen” and ‘‘Yakiniku Yamagyu’’ brands in Hong Kong in 2H2025.

Steady progress in overseas franchise ventures

Outside of Hong Kong, the Group has not only developed products that appeal to customers around the world, but has also been able to successfully engage local partners in its ventures. Leveraging the local market knowledge, expertise and resources of its local partners, the Group can mitigate risks faced by its international operations as a whole, as well as derive benefits that bolster the performance of the Group in general.

In Malaysia, the Group has established a strategic partnership with Hextar Retail Berhad (“Hextar”), a member of the Malaysian conglomerate, Hextar Group of Companies, for market entry, with the first restaurant expected to open in Kuala Lumpur in 2025.

With regard to the development in Australia, the Group’s first franchise restaurant will open in Melbourne in late November 2024 under the new “TamJai Mixian” (譚仔香港米線) brand, with two more stores scheduled to follow by the end of the financial year ending 31 March 2025. It is poised to demonstrate the successful implementation of the joint venture and franchise models for overseas expansion. In the Philippines, arrangements for establishing a franchise restaurant in the country are also progressing well.

Optimise self-operated overseas operations

During the Period, Japan continued to be the best performing market for the Group outside of Hong Kong, with both comparable restaurant revenue and overall revenue in 1H2025 increasing by 22.0% year-on-year. The increase in revenue, combined with an improvement in operational efficiency, resulted in a substantial reduction in operating loss in 1H2025, putting the business on track to achieving breakeven as it reaches an optimal network scale. The Group will seek to build on its current growth momentum by further expanding the restaurant network, enhancing its brand recognition and strengthening its restaurant operations.

The Group, however, faced stiffer headwinds in Mainland China and Singapore, leading to a decline in revenue and operational performance in 1H2025. The Group will strive to consolidate the operations of the Mainland China and Singapore businesses, with the main objectives of improving operational performance and accelerating their paths towards breakeven.

Digitalisation to improve efficiency and profitability

Regarding its digitalisation initiatives, the Group is set to launch new point of sales (“POS”) and CRM systems in 2H2025. The upgraded POS system is designed to streamline the workflow of frontline staff, helping to enhance their productivity. As for the CRM system, which will be upgraded in tandem with the POS revamp, will facilitate more interactive features, targeted promotions and gamification elements, thereby increasing the stickiness of customers. Furthermore, the Group has strategically diverted its channel sales towards the its new CRM system, improving the overall profitability of the Group.