Thursday, March 28, 2024
 
Columnist
Martin Hennecke
 
TANG PALACE
HKEx Stock Code : 01181 
 
Corporate Profile
The Group is a restaurant chain group in China, providing a wide selection of food and beverage and table services in the PRC. The Group's restaurants under its own brand names serve a variety of Chinese and Japanese cuisine, and its fast food restaurant under the franchise name of Pepper Lunch (胡椒廚房) .

Business Review - For the year ended December 31, 2012

Chinese Restaurant Business

Chinese cuisine remains as our core business. We are currently operating 22 Chinese restaurants under 4 different brands, which contributed 94.0% of the Group's revenue, with total revenue of RMB774.9 million in FY2012 (FY2011: RMB721.1 million), showing 7.5% increase as compared to FY2011. We continue to build a close and trustworthy relationship with renowned hotel management groups and nationwide large scaled property groups for new store locations. During the year, we opened 3 Chinese restaurants, which were all located in national and international high-end hotels, including one Tang's Cuisine newly opened in Venetian Macao Resort Hotel (澳門威尼斯人渡假村酒店) in October 2012.

Casual Dining Business

We have continued to aggressively pursue our strategy to enlarge our customer base and increase our market share by developing the casual dining business. As the awareness and reputation of Pepper Lunch grows, we have accelerated our opening plan. During the year, 8 Pepper Lunch restaurants were opened in Beijing, Tianjin and Shanghai, bringing the total number of outlets to 14 as at 31 December 2012. Pepper Lunch recorded a total revenue of RMB36.3 million for FY2012, showing a year-on-year growth of 215.7%, as compared to RMB11.5 million for FY2011. In another initiative to expand our market share, in May 2012, we entered into a Shareholders' Agreement with PappaRich Group, one of the leading brands in the local food and beverage chain in Malaysia, aimed at introducing a trendy Southeast Asian dining experience into Mainland China, Hong Kong and Macau, with strong believe in capturing the tremendous domestic consumption demand in the regions.

Procurement and Logistics

Our target to expand the scale of central procurement continues to be one of our major goals. It is essential for us to ensure food safety, a reliable supply of quality food, as well as cost control. To achieve efficient management of such, we maintain a close relationship with our long term business partners such as COFCO Food Sales & Distribution Co. Ltd. (中糧食品營銷有限公司) and Yihai Kerry Food Sales & Distribution Co., Ltd. (益海嘉里食品有限公 司), in the meantime, while evaluating different suppliers for our constantly diversified menu, we are also in negotiations with several well-known chain suppliers to expand the variety and quantity of food purchasing. In addition, we invested in upgrading our ERP system and further enhanced our procurement staff's skill and knowledge accordingly, to better cope with our increasing amount of central procurement and to better manage our supply chain.

Quality Control and 5S Management

Since its implementation in 2003, 5S management has been playing an important role in our quality control. For nearly a decade, we persisted to advance the system in order to pursue food hygiene, work safety, reduce wastage and overall efficiency on inventory storage and control. In 2012, all of our 22 Chinese restaurants has passed annual 5S inspection with very satisfactory result.


Business Outlook - For the year ended December 31, 2012

We will continue our strategy of steadily developing Chinese cuisines and aggressively speeding up the development in the causal dining business to cater for the constant changing food and beverage market. We will proactively respond to the market and adjust our development strategies accordingly.

In addition to selecting location for new restaurants with favourable terms, we will continue to cooperate with reputable hotel groups and property groups. We will also select location with size suitable for boutique type of cuisines, so as to introduce innovative dining experience to our customers.

We will review our menu continually and adjust our recipes to the changable customer tastes, so as to expand our customer base especially to capture young diners and customers with healthy consciousness. On food cost control, we will expand the scale of central procurement by continuously putting effort in facilitating cooperation with large chain suppliers that have numerous distribution centres in major cities to ensure the quality and quantity of food, as well as to reduce logistic cost.

In view of the everchanging employment market, we will further optimise our operational processes and adjust our staff structure. In addition, the cooperation with hotel and tourism management school will remain as our major effort on securing stable staff supply and stabilizing staff cost.

On the other hand, developing causal dining business is our future highlight. With Pepper Lunch gradually building up its presence, we believe our strategy on capturing young diners will reach our expectations. We will accelerate the expansion, as well as preparing for our first PappaRich Restaurant to launch in a first tier city in China.

Source: Tang Palace (China) (01181) Annual Results Announcement
Chairman Yip Shu Ming Issued Capital (shares) 418M
Par Value HKD 0.1 Market Capitalisation (HKD) 544M
 
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