NEW YORK,
Feb. 26,
2024 /PRNewswire/ -- Argus Research, an
independent investment research firm, has launched Equity Research
Report coverage on TH International Limited (NasdaqCM:
THCH).
Click Here to view full Argus Equity
Research Report.
COMPANY HIGHLIGHTS: Excerpts
(as conveyed by Argus Analyst Steve
Silver) include:
TH International: Expanding China's Fast Growing
Coffee Market
- White Space for Growth: THCH has been expanding in
China's Fast Growing Coffee Market since 2019. We see the market
for coffee consumption in China as
still in the early-stages of a generational category shift from a
previously tea drinking culture.
- Adding Locations: In our view, THCH is executing a
strategic plan that aims to expand to over 2,700 locations in 2026,
nearly tripling from its current footprint.
- Investment Phase Largely Completed: THCH has completed
much of its investment towards building an infrastructure,
including a scalable supply chain and technology system that can
support the target footprint.
- Differentiated Product Offering: We think that
Tims China is well positioned to
fill the role of a differentiated player in the Chinese market; by
providing value on price compared with entrenched market leaders,
while still offering a locally adapted food menu. Thus, we expect
Tims China to grow without needing
to displace or take share from other entrenched players.
- Expanding Margins: We are encouraged by several
operating trends in Tims China's
business, including store EBITDA margin expansion to 7.5% in the
third quarter of 2023, up from 5% in the previous quarter, and
growth in its loyalty program base to over 18 million (up more than
90% over the same period of 2022), which accounts for about 80% of
its transactions, the majority of which are conducted online.
- Solid Financial Position: As of September 30, 2023, THCH had RMB 461.9 million ($64.9
million USD) in cash, and net debt of RMB 1.07 billion ($85
million USD). We expect continued improvement in corporate
level EBITDA to improve its balance sheet over time.
- Fair Value: Based on our EV/Revenue analysis, we see a
fair value of $4.00 per share.
INVESTMENT THESIS: Click Here to view full
Argus Equity Research Report and Investment Thesis.
About TH International Limited (NasdaqCM:
THCH)
www.timschina.com
TH International Limited ("Tims China", or "THCH", or "the company") is the
parent company of the exclusive master franchisee of Tim Hortons coffee shops for Restaurant Brands
International Inc. in mainland China, Hong Kong and Macau, as well as Popeyes restaurants in
mainland China and Macau. THCH
offers freshly brewed coffee, tea and other beverages, bakery and
sides, as well as sandwiches. The company launched its first coffee
shop in China in February 2019 and had grown to more than 900
stores by the end of 2023. The company utilizes an operating model
that includes company-owned stores and franchise operated
locations, of various location size formats.
For more information please contact:
IR@TimsChina.com
or
Gemma.Bakx@Cartesiangroup.com
212-461-6351
About Argus Research Corp.
Headquartered in NYC, Argus Research
(www.argusresearch.com) is a leading independent equity research
firm (est. 1934) ̶ providing fundamental and
quantitative research coverage on more than 1,600 companies across
all 11 sectors of the S&P 500, as well as macroeconomic and
equity market forecasts, thematic research, model portfolios and
IPO research. In addition, Argus has recently committed to
providing a sponsored research solution for small & mid-cap
companies seeking coverage. Argus's Equity Research &
earnings estimates are available on major research / earnings
estimate aggregator platforms, including Bloomberg, Thomson
Reuters, Factset and S&P Global.
For more Information please contact:
Darrell Stone
646-747-5438
dstone@argusresearch.com
Argus Research Co. has received a flat fee from
the company discussed in this report as part of a Sponsored
Research agreement between Argus and the company. No part of Argus
Research's compensation is directly or indirectly related to the
content of this assessment or to other opinions expressed in this
report. Please refer to the full Argus report and the disclaimer
for complete disclosures.
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SOURCE Argus Research