Tsui Wah Holdings Limited Announces details of the

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[For Immediate Release]
Tsui Wah Holdings Limited
Announces details of the proposed listing on the Main Board of
Hong Kong Stock Exchange
* * *
Global Offering of 333,334,000 shares
Proceeds Ranging from HK$1.89 to HK$2.27
Investment Highlights
Tsui Wah is the leading Cha Chaan Teng chain owner and operator in Hong Kong 1 targeting the
mid-range to high-end Cha Chaan Teng market. It is an iconic brand which offers an innovative
menu, and quality and safe cuisines at authentically Hong Kong-style.
According to the Frost and Sullivan Report, Tsui Wah outperforms its industry peers in many
major operating data categories including market share, turnover rate and annual sales per
restaurant.
1 Based on the revenue and no. of seats in 2011 according to the Frost & Sullivan Report
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Tsui Wah Announces details of the proposed listing on the Main Board of HKSE
13 November 2012
Centralised purchasing, central kitchen, standardised restaurant outlet management and a
modern IT system ensure high overall operational efficiency
Strong track record – CAGR of turnover between FY2010 and FY2012 reached 31.7%, and that
of net profit was even higher at 38.8%
Business in Mainland China continues to grow rapidly. Revenue contribution from the China
market increased from 8.1% in FY2010 to 14.9% in the three months ended 30 June 2012.
Comparable restaurants sales and daily average revenue per restaurant in Mainland China grew
by 33%, while the average spending per invoice in China is about 2.5 times that in Hong Kong.
Plans to expand the existing restaurant network from 26 restaurants to nearly 60 restaurants in
Greater China region during the next three years. Among these, about 22 new restaurants will be
opened in China to capture the strong growth potential in China’s catering market.
(Hong Kong, 13 November 2012) – Tsui Wah Holdings Limited (“Tsui Wah” or the “Group”), the
leading Cha Chaan Teng chain owner and operator 1 in Hong Kong, today announced the details of
its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited (“HKSE”).
A total of 333,334,000 shares (subject to the over-allotment option) will be issued as part of its Share
Offer, of which approximately 90% are for the International Placing and approximately 10% are for
the Hong Kong Public Offering. The indicative offer price range is between HK$1.89 and HK$2.27
per share. Assuming the over-allotment option is not exercised, total issue value is estimated at
between approximately US$81 million and US$98 million.
The Hong Kong Public Offering will begin on 14 November 2012 (Wednesday) and end at noon on
19 November 2012 (Monday). The final offer price and allotment results will be announced on 23
November 2012 (Friday). Trading of Tsui Wah’s shares will commence on the Main Board of the
HKSE on 26 November 2012 (Monday) under the stock code 1314. The shares will be traded in
board lots of 2,000 shares.
Within the International Placing, LT Growth Investment XV Limited, a wholly-owned subsidiary of
Capital Today China Growth Fund II, L.P. (“Capital Today group”) and Prax Capital China Growth
Fund III, L.P. (“Prax”) are the two cornerstone investors, each having agreed to subscribe at the Offer
Price for an aggregate amount of approximately US$10 million. Capital Today Group currently has
over US$680 million of assets under management; its principal investment focus is to make
growth-stage investments in businesses serving middle class consumers in China and help them
build leading brands in the PRC. Prax focuses on private equity investments in the PRC. It has a
proven track record investing in the restaurant and consumer services industries.
Deutsche Securities Asia Limited is the Sole Sponsor, and Deutsche Bank AG, Hong Kong Branch is
the Sole Global Coordinator, Sole Bookrunner and Sole Lead Manager of the listing.
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Tsui Wah Announces details of the proposed listing on the Main Board of HKSE
13 November 2012
The largest Cha Chaan Teng chain in Hong Kong with leadership position in the Cha Chaan
Teng casual dining market
With a history of 40 years, “Tsui Wah” brand has developed into an iconic and prestigious Cha
Chaan Teng brand which targets the mid-range to high-end casual dining segment. According to
Frost & Sullivan Report, Tsui Wah is the leading Cha Chaan Teng chain owner and operator in Hong
Kong based on revenue and number of seats in 2011, giving it a leading position in that market
segment. It also outperforms other industry peers in terms of major operating data including market
share, turnover rate and annual sales per restaurant, according to the Frost & Sullivan Report.
The management team of Tsui Wah has substantial experience within the industry in tireless pursuit
of serving delicious and fresh Cha Chaan Teng cuisine. This has enabled it to build the ‘‘Tsui Wah ’’
brand into a Cha Chaan Teng cuisine icon offering appetising, safe and fresh food of the best quality.
The Group currently offers approximately 170 dishes and drinks. It insists on using excellent food
ingredients and implementing strict food preparation, supervision and control procedures, as well as
constantly seeking to incorporate other regional flavors and international elements to introduce new
menu delights.
The Group ensures high efficiency in overall operation through standardised controls in centralised
purchasing, and central kitchen and restaurant management, as well as through a modern
information technology system. The computerised point-of-sale system at the Group’s restaurants
also captures consumer spending data, which aids the Group in expanding its business to new
markets more rationally. Its standardised and highly efficient operations have enabled the Group to
replicate its successful business model in Hong Kong to the Greater China region for rapid
expansion and to maintain satisfactory profit.
Tsui Wah currently owns and operates 26 restaurants, including 21 in Hong Kong, 4 in China and 1
in Macau. The Group ventured into the Mainland China market during FY2009 and business there
has been growing rapidly in the past three years. Revenue contribution from the China market
increased from 8.1% in FY2010 to 10.8% in FY2012. For the three months ended 30 June 2012,
revenue contribution from China accounted for 14.9% in total turnover. Comparable restaurants
sales and daily average revenue per restaurant in Mainland China grew by 33%, while the average
spending per invoice in China is about 2.5 times that in Hong Kong.
Future development strategy
To drive future growth, Tsui Wah plans to expand the existing restaurant network from 26 restaurants
to nearly 60 outlets across Greater China region within the next three years. Among these, about 22
new restaurants will be opened in China to capture the strong growth potential in China’s catering
market.
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Tsui Wah Announces details of the proposed listing on the Main Board of HKSE
13 November 2012
The Group plans to take the first mover advantage and expand its presence in prime locations within
major cities such as Shanghai, Shenzhen, Guangzhou and Wuhan in Yangtze River Delta, Southern
China and Central China regions through its “hub-and-spoke” strategy. This will help it generate
brand recognition and establish a solid customer base. Tsui Wah is also actively preparing to set up
a central kitchen occupying about 30,000 sq. ft. in Shanghai with operations scheduled to begin
before 31 March 2014. In addition, to support its expansion in Southern China, the Group also plans
to set up a central kitchen to be located in or near Shenzhen or Guangzhou. The facility is expected
to cover 15,000 sq. ft. and start operation before 31 March 2015.
In Hong Kong, the Group plans to open 11 new restaurants by 31 March 2015, and also push for
diversified development through multiple channels. It will strengthen its delivery service and open 7
new centres in Hong Kong during the next three years to reach more customers. Furthermore, the
Group is developing a new catering service under the “Supreme Catering” brand in a bid to enlarge
market share and its customer base within Hong Kong. To meet growth requirements and ensure
consistent food quality, the Group’s second central kitchen in Hong Kong will begin operation before
31 March 2014, which promises enhanced efficiencies and economies of scale.
Mr LEE Yuen Hong, Chairman and Executive Director of Tsui Wah Holdings Limited, said, “We
are delighted to announce details of the Group’s listing on the Main Board of the Hong Kong Stock
Exchange today. This is a major milestone for Tsui Wah, further enhancing our dedication to
innovation in its business strategies and stringent quality control so as to provide customers with
high quality food that is safe, fresh and delicious. Boasting a highly effective and standardised
operations model and leadership of a seasoned management team, we will continue to lead the
culinary trend and strive to replicate our success model in Hong Kong in the Greater China market.
Our goal is to become a leading Cha Chaan Teng chain in Greater China and deliver satisfactory
returns to shareholders.”
Use of proceeds
Assuming the over-allotment option is not exercised and the offer price is fixed at HK$2.08 per share
(being the mid-point of the indicative range of the Offer Price of HK$1.89 to HK$2.27 per Share), net
proceeds are estimated to be HK$631.1 million and will be used as follows:
Approximately
New restaurant openings in China 35%
Open new restaurants, and delivery centres as well as launch a catering
service in Hong Kong 20%
Construction of new central kitchens in Shanghai and Southern China 20%
Construction of a new central kitchen in Hong Kong 10%
Upgrade information technology systems 5%
Additional working capital and for other general corporate purposes 10%
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Tsui Wah Announces details of the proposed listing on the Main Board of HKSE
13 November 2012
Dividend policy
The Group intends to recommend that dividends of not less than 30% of its net profit for each year
after the listing (that is, commencing from the year ending 31 March 2013) would be available for
distribution to shareholders after the Global Offering.
Financial Performance
HK$’000 For the Year Ended 31 March For the 3 Months Ended 30 June
2010 2011 2012 CAGR (%) 2011 2012 Growth
(%)
Revenue 440,010 598,047 762,791 +31.7% 167,250 223,623 +33.7%
Net Profit 57,319 68,024 110,429 +38.8% 20,149 25,648 +27.3%
EBITDA 18.9% 17.7% 20.5% -- 17.2% 18.1% --
Margin
Net Profit
Margin
13.0% 11.4% 14.5% -- 12.0% 11.5% --
Operating Data
Comparable Restaurants FY2010 FY2011 FY2012 CAGR
in Hong Kong (1)
Comparable restaurants sales 385,850 433,990 488,220 12.5%
(HK$’000)
Daily average revenue per
96 108 122 12.7%
comparable restaurant
(HK$’000)
Average number of invoices 21 24 25 9.1%
per table per day
Average spending per invoice
(HK$)
66 68 74 5.9%
For the Year
Ended 31 March (2)
For the 3 Months
Ended 30 June (3)
Comparable Restaurants 2011 2012 Growth 2011 2012 Growth
in Mainland China
Comparable restaurants sales 47,724 55,449 16.2% 18,648 24,789 32.9%
(HK$’000)
Daily average revenue per 131 152 16.0% 102 136 33.3%
comparable restaurant
(HK$’000)
Average number of invoices 7 8 14.3% 6 7 16.7%
per table per day
Average spending per invoice 169 190 12.4% 193 190 (1.6%)
(HK$)
(1) Based on 11 comparable restaurants in Hong Kong
(2) Based on 1 comparable restaurant in China
(3) Based on 2 comparable restaurants in China
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Tsui Wah Announces details of the proposed listing on the Main Board of HKSE
13 November 2012
About Tsui Wah Holdings Limited (stock code: 1314)
Tsui Wah Holdings Limited is the leading Cha Chaan Teng ( 茶 餐 廳 ) restaurant chain owner and
operator in Hong Kong 2 which owns and operates all of its 26 restaurants under its renowned “Tsui
Wah 翠 華 ” brand, including 21 outlets in Hong Kong, 4 in China and 1 in Macau. Targeting the
mid-range to high-end segment of the market, Tsui Wah offers a distinct, yet authentically Hong
Kong-style cuisine that combines a traditional Cantonese menu with Western and Asian elements.
Tsui Wah also operates a quick service restaurant at Hong Kong International Airport under the “Tsui
Wah EATery” sub-brand and has introduced a new restaurant under another sub-brand “Tsui Wah
Concept 翠 華 Concept” targeting a younger market demographic segment. Tsui Wah has also
launched a new brand, “Supreme Catering,” in October 2012 to expand into the catering services
industry.-
Media Enquiries
Strategic Financial Relations Limited
Iris Lee +852 2864 4829 iris.lee@sprg.com.hk
Mandy Go +852 2864 4812 mandy.go@sprg.com.hk
Maggie Au +852 2864 4815 maggie.au@sprg.com.hk
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www.sprg.com.hk
2 Based on revenue and number of seats in 2011, according to the Frost & Sullivan Report
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