Crosby Research: Tai Hing (6811 HK): Introducing more new brands this year
Tai Hing’s FY19 revenue increased by 4% YoY to HK$3.3bn, with revenues from HK/China markets +6.3%/-3.9% YoY to HK$2.6bn/HK$671m. GPM remained stable at 71.3% (FY18: 71.6%) despite rising food prices, as the company have further leveraged on its centralized procurement and food processing to contain costs. Staff cost ratio remained stable at 33.7% (FY18: 33.1%) due to control in recruitments and better workflows. After taking out listing expense and other one-off items, adjusted NP decreased by 11.9% YoY to HK$135m. By end of FY19, Tai Hing has 205 restaurants under 11 casual dining brands across HK, China, Macau and Taiwan. The company declared a full-year DPS of HK$0.0504, representing a payout ratio of 65.3%.