TamJai International looks to expand into western market despite drop in profit

Tam Jai International (TJI) is looking to expand into the western market despite its net profit for FY2023 recorded a drop by 30.6% year-on-year to HK$141 million.

According to the release, the drop in profit was due to the economic downturn during the pandemic and increasing operating costs caused by inflation. However, the group’s Hong Kong business started picking up gradually since the reopening of the border between Hong Kong and China, as evidenced by the improvement in comparable restaurants’ revenue performance from the first half of FY2023.

The revenue of the group achieved solid growth of 14.0% to HK$2,594 million, driven by the implementation of a expansion plan that saw the opening of 40 new restaurants across Hong Kong, mainland China, Singapore and Japan.  During FY2023, the group opened 20 new restaurants in Hong Kong across shopping malls, commercial and residential areas, which should complement its existing network and lay a solid foundation for further recovery in FY2024.

In mainland China, the group’s business was severely impacted by the strict COVID-19 measures and lockdowns in major cities during the year. Nonetheless, financial performance in the last quarter of FY2023 gradually improved since the lifting of social distancing measures and border restrictions. Upon reflecting on the uncertainties over COVID-19, the group carefully reviewed its pipeline and has since further refined its expansion strategy by accelerating the penetrations into the tier 2 cities in the GBA, where operating costs are lower and competition is less severe.

In Singapore, despite the challenge of local labour shortage in the second half of FY2023, average daily number of bowls served per seat for FY2023 increased by 32.1% year-on-year to 3.7. With the openings of six new restaurants, revenue in Singapore reached HK$64.2 million, representing a 149.8% year-on-year increase when compared with FY2022. 

During FY2023, the group cooperated with a food delivery platform in Singapore as the additional food aggregator, enabling it to expand its customer base in new areas. With the aim to strike a balance in maintaining staff cost control, reasonable capital expenditure investment and growth momentum, the group also explored alternative models, such as the express model, to boost operational efficiency.

On top of its existing presence, TJI will look to expand into other potential markets, such as the western market, to broaden its business footprint further and derive greater synergies and efficiency. It will explore the possibility of strategic collaborations with local partners to help tap into those markets, by leveraging their local experience and resources. It is targeting to open approximately 50 new restaurants across regions in FY2024, including accelerating the process of resuming the expansion plan in the Greater Bay Area. 

The group will also continue to devote great amounts of resources to enhance its product and service qualities, deliver exceptional dining experience through its digitalisation journey and innovative products development.

With regards to the China market, the group is confident that the revenue performance will improve after the border re-opening and the relaxation of COVID-19 restrictions, as demonstrated by the notable improvement in the last quarter of FY2023. It has accelerated the process to resume its expansion plan in the GBA region and will implement various marketing campaigns to capture the opportunities from the stabilising economy in FY2024. The group also looks to advance its business operations in Singapore and Japan, enhancing the operation efficiency and service quality while adapting its brand into the local markets.

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Daren Lau, chairman, executive director and chief executive officer of TJI, said: “Over the past few years, we have shown a high sense of agility in our operations to cope with the uncertainties, and demonstrated our commitment of investing into brand building and systems enhancement to optimise our business processes. Now as we see light at the end of the tunnel, with the solid foundation we have established, we are more than prepared for the business opportunities on the road to market recovery.”

Back in January, TamJai Yunnan Mixian joined hands with 12 local illustrators to launch TamJai-themed drawings in its latest creative campaign. This came as the brand hoped to further commit to its corporate social responsibilities through creative campaigns, with “TamJai Jeh Jeh” (TamJai waitresses) and “TamJai-ese” becoming familiar cultural artifacts of Hong Kong.

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