Hong Kong restaurant chains Tsui Wah and Fairwood post interim profit growth
The companies attribute growth to cost reductions and better business environment
Hong Kong restaurant operators Tsui Wah Holdings and Fairwood Holdings posted improved interim results for the six months ended September 30, citing lower costs and a better business environment as reasons for growth.
Tsui Wah’s net profit rose to HK$48.01 million (US$6.15 million), or 3.4 HK cents per share, up 13.7 per cent compared to the previous year. The interim net profit accounted for just 44.25 per cent of Thomson Reuters’ full-year profit estimate of HK$109 million.
Revenue in the six-month period fell to HK$904.84 million from HK$931.51 million a year ago, due to a drop in revenue in Hong Kong, the closure of three restaurants and the fierce competition in the market, the company said in a filing to the Hong Kong stock exchange on Tuesday.
Apart from the interim dividend of 2 HK cents per share, the company said in a press conference earlier Tuesday that it would consider a special dividend at the end of the financial year.
Tsui Wah chief executive Peter Pang said the company would open new restaurants in the second half of the financial year – two in Shanghai, three in southern China such as Zhongshan city, and three in Hong Kong.
“We hope to double the number of restaurants by 2022,” Pang said. Tsui Wah currently has 65 restaurants.
It will also open a new bakery factory next year to increase production capacity. The bakery would cost “a few million dollars”, which chief operating officer John Yang said the company could afford.
Tsui Wah’s share price fell 0.85 per cent to close at HK$1.16 on Tuesday.
Fast-food chain Fairwood also reported a 12.8 per cent rise in net profit to HK$117.09 million for the six months. The profit accounted for 53.55 per cent of Thomson Reuters’ annual profit estimate of HK$218.5 million.
The company said in a Hong Kong stock exchange filing that it opened six new Fairwood restaurants and three specialty restaurants in Hong Kong during the six-month period.
Its share price rose 3.11 per cent on Tuesday to close at HK$31.45.