Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>We estimate <a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet (8371 HK)</a> to deliver 39% YoY revenue growth and about 13% YoY profit growth (adj 350% YoY) for Q1 FY24e, to be declared on August 10th.</li>
<li>The company is expected to go ex-dividend on the 4th of August and pay out a 5.2-HK cent final dividend by the 24th of August for FY23.  </li>
<li>Trading at 6x FY24e PE /20% of the market capitalization in cash and a 9-10% dividend yield ( based on a 50-60% payout ratio) represents a great investment opportunity.</li>
</ul>


We estimate Taste Gourmet (8371 HK) to deliver 39% YoY revenue growth and about 13% YoY profit growth (adj 350% YoY) for Q1 FY24e, to be declared on August 10th.
The company is expected to go ex-dividend on the 4th of August and pay out a 5.2-HK cent final dividend by the 24th of August for FY23.  
Trading at 6x FY24e PE /20% of the market capitalization in cash and a 9-10% dividend yield ( based on a 50-60% payout ratio) represents a great investment opportunity.


Taste Gourmet: Q1 FY24 Preview, Another Strong Quarter in the Making

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet (8371 HK)</a> reported earnings of 68 mn HKD for FY23 (including impairments of 3.2 mn HKD). Adjusting for impairments, earnings were in line with our estimates.</li>
<li>The company signed ten new leases in HK, which are expected to commence over the next 5-6 months taking the total restaurant count in HK to 49. </li>
<li>Trading at 5.6x PE FY24e with a dividend yield of 10.7% based on a 60 payout ratio, we see a further inflection in earnings in FY24 with new restaurant openings.</li>
</ul>



Taste Gourmet (8371 HK) reported earnings of 68 mn HKD for FY23 (including impairments of 3.2 mn HKD). Adjusting for impairments, earnings were in line with our estimates.
The company signed ten new leases in HK, which are expected to commence over the next 5-6 months taking the total restaurant count in HK to 49. 
Trading at 5.6x PE FY24e with a dividend yield of 10.7% based on a 60 payout ratio, we see a further inflection in earnings in FY24 with new restaurant openings.


Taste Gourmet: Expansion in Full Swing, Set Up For A Great 2024

<ul>
<li>Earnings for Q3 2023 came in at 17.5 mn HKD up 5% YoY, about 15% below our expectations due to closure costs incurred on some restaurants in November. </li>
<li>The company added four restaurants in December 2022 which should result in strong revenue growth in January 2023. We expect monthly revenue to surpass HKD 80 mn. </li>
<li>Post the recent rally, the stock trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK recovery play. </li>
</ul>


Earnings for Q3 2023 came in at 17.5 mn HKD up 5% YoY, about 15% below our expectations due to closure costs incurred on some restaurants in November. 
The company added four restaurants in December 2022 which should result in strong revenue growth in January 2023. We expect monthly revenue to surpass HKD 80 mn. 
Post the recent rally, the stock trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK recovery play. 


Taste Gourmet: Encouraging 3Q 2023, Super Set Up for Q4.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet Group (8371 HK)</a> is an excellent play on China/HK reopening with a 5.7x/4.2x FY23/24 PE and 10+% dividend yield, with 25% of the mkt cap in net cash.</li>
<li>Reopening of China and HK borders after Jan 8th will provide a boost to the revenue and margins. The company will also resume its expansions in China (3 restaurants). </li>
<li>Channel checks suggest a solid Q3 2023, with the company expanding to 38 restaurants in HK (34 in Q2 2023), with a surge in revenue likely due to seasonality. </li>
</ul>



Taste Gourmet Group (8371 HK) is an excellent play on China/HK reopening with a 5.7x/4.2x FY23/24 PE and 10+% dividend yield, with 25% of the mkt cap in net cash.
Reopening of China and HK borders after Jan 8th will provide a boost to the revenue and margins. The company will also resume its expansions in China (3 restaurants). 
Channel checks suggest a solid Q3 2023, with the company expanding to 38 restaurants in HK (34 in Q2 2023), with a surge in revenue likely due to seasonality. 


Taste Gourmet: Growth <6x PE with 10% Div Yield and China Reopening Boost

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet Group (8371 HK)</a>  reported its H1 2023 result with profit of 32 mn HKD up 28% YoY, backed by subsidies due to restrictions earlier in the year.</li>
<li>Net cash rose by 52 mn HKD (almost 12.4% of market capitalization) to 117 mn HKD HoH (28% of market cap). Nine mn HKD in subsidies are outstanding.</li>
<li>The company declared 4.8 cents of dividend (9.1% annualized yield), in addition to repurchasing and canceling &gt;2% of the shares outstanding recently.</li>
</ul>



Taste Gourmet Group (8371 HK)  reported its H1 2023 result with profit of 32 mn HKD up 28% YoY, backed by subsidies due to restrictions earlier in the year.
Net cash rose by 52 mn HKD (almost 12.4% of market capitalization) to 117 mn HKD HoH (28% of market cap). Nine mn HKD in subsidies are outstanding.
The company declared 4.8 cents of dividend (9.1% annualized yield), in addition to repurchasing and canceling &gt;2% of the shares outstanding recently.


Taste Gourmet: Cash Generation Par Excellence

Hong Kong

Taste Gourmet Group Limited operates as a holding company. The Company, through its subsidiaries, manages a chain of restaurants. Taste Gourmet Group serves clients worldwide.

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Taste Gourmet (8371 HK)

Taste Gourmet: Q1 FY24 Preview, Another Strong Quarter in the Making

Trading at 6x FY24e PE /20% of the market capitalization in cash and a 9-10% dividend yield ( based on a 50-60% payout ratio) represents a great...

Sameer Taneja

Taste Gourmet: Expansion in Full Swing, Set Up For A Great 2024

Trading at 5.6x PE FY24e with a dividend yield of 10.7% based on a 60 payout ratio, we see a further inflection in earnings in FY24 with new...

Sameer Taneja

Taste Gourmet: Encouraging 3Q 2023, Super Set Up for Q4.

Taste Gourmet trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK...

Sameer Taneja

Taste Gourmet: Growth <6x PE with 10% Div Yield and China Reopening Boost

Taste Gourmet Group (8371 HK) is an excellent play on China/HK reopening with a 5.7x/4.2x FY23/24 PE and 10+% dividend yield, with 25% of the...

Sameer Taneja

Taste Gourmet: Cash Generation Par Excellence

Taste Gourmet trades at an extremely cheap valuation of 5.8x FY23 PE and a 10.3% dividend yield. Management indicates that October points to a...

Sameer Taneja

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