Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Tam Jai International / Equity Capital Markets

<ul>
<li>Hong Kong based rice noodles restaurant chain, <a href="https://www.smartkarma.com/entities/tam-jai-international-co-ltd" target="_blank" data-smartkarma-citation="entities:34227:1" rel="noopener">Tam Jai International (TJI HK)</a> announced the price range to its IPO at HK$ 3.33-4.17 per share, which implies a market cap and EV range of HK$ 4.5-5.6bn and HK$ 3.1-3.9bn respectively.</li>
<li>Tam Jai International will raise HK$ 1.1-1.4bn (US$ 145-182m) via issuing 335m new shares. The parent company, Toridoll has also granted underwriters the right to sell up to an additional 50.2m shares as a part of an overallotment option.</li>
<li>The application period ends on Tuesday (28th September 2021) and the shares are expected to start trading on the Hong Kong Stock Exchange from 7th October 2021.</li>
</ul>


Hong Kong based rice noodles restaurant chain, Tam Jai International (TJI HK) announced the price range to its IPO at HK$ 3.33-4.17 per share, which implies a market cap and EV range of HK$ 4.5-5.6bn and HK$ 3.1-3.9bn respectively.
Tam Jai International will raise HK$ 1.1-1.4bn (US$ 145-182m) via issuing 335m new shares. The parent company, Toridoll has also granted underwriters the right to sell up to an additional 50.2m shares as a part of an overallotment option.
The application period ends on Tuesday (28th September 2021) and the shares are expected to start trading on the Hong Kong Stock Exchange from 7th October 2021.


Tam Jai International IPO Valuation: Cheaper Than Noodles

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tam-jai-international-co-ltd" target="_blank" data-smartkarma-citation="entities:34227:1" rel="noopener">Tam Jai International (TJI HK)</a> is a popular fast casual restaurant chain in Hong Kong that offers a type of rice noodle called “Mixian” under two restaurant brands; TamJai Yunnan Mixian (譚仔雲南米線) and TamJai SamGor Mixian (譚仔三哥米線).</li>
<li>Tam Jai is an excellent business with market leadership in Hong Kong’s specialty noodles restaurants segment. It offered earnings stability during the COVID-19 lockdowns, and has an earnings growth potential of around 99% EBIT CAGR through FY21-24. Though all the restaurants are company-owned, the business model requires low initial capital, resulting in a fast payback period and above industry average investment returns. Moreover, the company expects to pay out a minimum of 30% of earnings as annual dividends.</li>
<li>We think that these factors should help tick the investment criteria of a wide range of investors. As long as it is not priced unreasonably, we think Tam Jai’s proposed US$100m IPO on the Hong Kong Stock Exchange could get lots of institutional and retail investors interested.</li>
</ul>



Tam Jai International (TJI HK) is a popular fast casual restaurant chain in Hong Kong that offers a type of rice noodle called “Mixian” under two restaurant brands; TamJai Yunnan Mixian (譚仔雲南米線) and TamJai SamGor Mixian (譚仔三哥米線).
Tam Jai is an excellent business with market leadership in Hong Kong’s specialty noodles restaurants segment. It offered earnings stability during the COVID-19 lockdowns, and has an earnings growth potential of around 99% EBIT CAGR through FY21-24. Though all the restaurants are company-owned, the business model requires low initial capital, resulting in a fast payback period and above industry average investment returns. Moreover, the company expects to pay out a minimum of 30% of earnings as annual dividends.
We think that these factors should help tick the investment criteria of a wide range of investors. As long as it is not priced unreasonably, we think Tam Jai’s proposed US$100m IPO on the Hong Kong Stock Exchange could get lots of institutional and retail investors interested.


Tam Jai International IPO Satisfies Investor Cravings

Event-Driven

TORIDOLL Holdings Corporation / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toridoll-holdings-corporation" target="_blank" data-smartkarma-citation="entities:8193:1" rel="noopener">TORIDOLL Holdings Corporation (3397 JP)</a> is one of the largest restaurant chains in Japan with over 1,100 restaurants in the domestic market and another 600+ restaurants in overseas markets.</li>
<li>The company’s fully owned subsidiary, Hong Kong based rice noodle chain operator, <a href="https://www.smartkarma.com/entities/tam-jai-international-co-ltd" target="_blank" data-smartkarma-citation="entities:34227:1" rel="noopener">Tam Jai International (TJI HK)</a> is seeking a listing on the Hong Kong stock exchange. Although Tam Jai’s IPO valuation is still unknown, we think the IPO could get a valuation of around HK$ 11.9bn, which is around 76% and 50% of Toridoll’s current market cap and EV respectively.</li>
<li>Based on the estimated valuation of Tam Jai, Toridoll’s domestic business and other overseas restaurant ventures are trading at cheap implied valuation multiples compared to peers, suggesting that there could be an upside upon completion of the Tam Jai International IPO.</li>
</ul>



TORIDOLL Holdings Corporation (3397 JP) is one of the largest restaurant chains in Japan with over 1,100 restaurants in the domestic market and another 600+ restaurants in overseas markets.
The company’s fully owned subsidiary, Hong Kong based rice noodle chain operator, Tam Jai International (TJI HK) is seeking a listing on the Hong Kong stock exchange. Although Tam Jai’s IPO valuation is still unknown, we think the IPO could get a valuation of around HK$ 11.9bn, which is around 76% and 50% of Toridoll’s current market cap and EV respectively.
Based on the estimated valuation of Tam Jai, Toridoll’s domestic business and other overseas restaurant ventures are trading at cheap implied valuation multiples compared to peers, suggesting that there could be an upside upon completion of the Tam Jai International IPO.


Tam Jai International IPO Could Unlock The Value of Toridoll’s Smaller Business Operations

<ul>
<li>Rice noodle chain operator, <a href="https://www.smartkarma.com/entities/tam-jai-international-co-ltd" target="_blank" data-smartkarma-citation="entities:34227:1" rel="noopener">Tam Jai International (TJI HK)</a> completed its listing hearing and received approval for the proposed US$100.0m IPO on the Hong Kong Stock Exchange on 13th September 2021.</li>
<li>
<a href="https://www.smartkarma.com/entities/toridoll-holdings-corporation" target="_blank" data-smartkarma-citation="entities:8193:1" rel="noopener">TORIDOLL Holdings Corporation (3397 JP)</a>, the biggest operator of noodle shops in Japan, took control of stagnating TamJai and SamGor restaurant chains in 2018 from its founder to restructure and turn around the noodle chains to fast growth and highly profitable businesses.</li>
<li>We like Tam Jai International under Toridoll’s management as Toridoll seems capable of taking the popular TamJai and SamGor restaurant brands global while continuing to expand TamJai’s and SamGor’s presence in the domestic market (Hong Kong).</li>
</ul>


Rice noodle chain operator, Tam Jai International (TJI HK) completed its listing hearing and received approval for the proposed US$100.0m IPO on the Hong Kong Stock Exchange on 13th September 2021.

TORIDOLL Holdings Corporation (3397 JP), the biggest operator of noodle shops in Japan, took control of stagnating TamJai and SamGor restaurant chains in 2018 from its founder to restructure and turn around the noodle chains to fast growth and highly profitable businesses.
We like Tam Jai International under Toridoll’s management as Toridoll seems capable of taking the popular TamJai and SamGor restaurant brands global while continuing to expand TamJai’s and SamGor’s presence in the domestic market (Hong Kong).


Tam Jai International IPO: A Big Appetite For Growth Under Toridoll’s Control

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>We tend to shy away from the restaurant industry but decided to make an exception for Tam Jai;</li>
<li>The brand has become a household name in Hong Kong and delivers attractive business economics for owners from its home market;</li>
<li>However, we see multiple red/yellow flags when it comes to the management's capital allocation, particularly relating to overseas expansion.</li>
</ul>


We tend to shy away from the restaurant industry but decided to make an exception for Tam Jai;
The brand has become a household name in Hong Kong and delivers attractive business economics for owners from its home market;
However, we see multiple red/yellow flags when it comes to the management's capital allocation, particularly relating to overseas expansion.


Tam Jai International: High-Quality Assets, Low-Quality Capital Allocation

Hong Kong

Tam Jai International Co. Limited operates restaurants. The Company provides specialties, fast food products, desserts, drinks, and other related products. Tam Jai International markets its products throughout Hong Kong.

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Tam Jai International (2217 HK)

Tam Jai International IPO Valuation: Cheaper Than Noodles

Hong Kong based rice noodles restaurant chain, Tam Jai announced the price range to its IPO at HK$ 3.33-4.17 per share, which implies a market cap...

Oshadhi Kumarasiri

Tam Jai International IPO Satisfies Investor Cravings

Tam Jai is an excellent business with market leadership in Hong Kong’s specialty noodles restaurants segment. It offered earnings stability during...

Oshadhi Kumarasiri

Tam Jai International IPO Could Unlock The Value of Toridoll’s Smaller Business Operations

Tam Jai international currently remains hidden among Toridoll’s businesses. However, if the upcoming IPO fetches around HK$11.9bn valuation,...

Oshadhi Kumarasiri

Tam Jai International IPO: A Big Appetite For Growth Under Toridoll’s Control

We like Tam Jai International under Toridoll’s management as Toridoll seems capable of taking the popular TamJai and SamGor restaurant brands...

Oshadhi Kumarasiri

Tam Jai International: High-Quality Assets, Low-Quality Capital Allocation

We would have to stay on the sidelines for now but would revisit the investment thesis in case of a drastic shift in the management's capital...

Steven Chen

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