TamJai International profit drops by 30%, but group remains bullish

TamJai International's profit for latest financial year has dropped by about 30%. However, its adjusted profit for FY2022, excluding the impact of listing expenses and government subsidies, was HK$165.5 million, representing a surge of HK$25 million or 17.8% as compared with FY2021, according its latest annual results.  The group's revenue increased by 26.8% from HK$1,794.7 million in FY2021 to HK$2,275.3 million in FY2022 due to the increase in the number of restaurants in operation and growth in comparable restaurants revenue as evidenced by the increase in average daily revenue per restaurant, average daily number of bowls served per seat and average spending per customer. 

In the first three quarters of FY2022, the group's performance, driven by the results of Hong Kong restaurants, had recovered to the same level as or was better than the level before the outbreak of COVID-19 in early 2020, due to its extensive restaurant network and food being highly suitable for takeaway and delivery orders.

The company said the revenue of its Hong Kong comparable restaurants in the first three quarters of FY2022 had already recovered to the pre-COVID-19 level due to wide recognition of the brand, marketing campaigns, the introduction of premium toppings, and the continued support from customers. In February, the group made a price adjustment, leading to an increase in the average spending per customer, and the average daily number of bowls served per seat, which includes both dine-in, takeaway and delivery orders.

In Q1 2022, Hong Kong was hit by the fifth wave of the pandemic. The demand for food and beverages services in the city dropped significantly and its comparable restaurants revenue growth was consequently narrowed in the last quarter in FY2022.

"People say that gold is tested and refined by the furnace. I believe that we have demonstrated the strength of our group’s fundamentals and our DNA. Looking forward, I am confident of the group’s future growth momentum. I believe in our ability to generate sustainable cash flow as we adapt our business to the changing market environment and thrive," said Lau Tat-man, chairman of the board and CEO of TamJai International. 

As of 31 March 2022, the group had a total of 175 restaurants across Hong Kong, Mainland China, Japan and Singapore. There were 81 TamJai SamGor restaurants and TamJai Yunnan Mixian stores in Hong Kong respectively. 

Moving forward, the group expects Hong Kong to continue to be the main revenue and profit engine for the company. For the mainland China market, the group still hold high hopes for its great potential. The initial revenue and customers responses of the new restaurants in Shenzhen and Guangzhou had been favourable until the sudden downturn due to the pandemic. "We believe that our business will pick up as soon as social activities resume since there is a strong recognition of our brand and products," the group said. 

Meanwhile, in a bid to grow its brand presence through advertising, TamJai International Group appointed Society as its advertising agency to handle the creative duties for its brands including TamJai Yunnan Mixian and TamJai SamGor. The group said Society is responsible for creating through-the-line advertising campaigns for both TamJai Yunnan Mixian and TamJai SamGor. Agnes Lung, CMO of TamJai International Group said the appointment was the result of Society's success in the 2021 Marketing Excellence Award in Hong Kong, in which the agency won three golds, two silvers and three bronzes. 

"Connecting brands with the target audience through insights and messages is what Society does best to set themselves apart from other agencies. We believe a true collaboration between the brand and the agency requires communication and mutual understanding. That's why we think that making a pitch may not be the best way for us to recruit the best partner," Lung said. 

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