Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

<ul>
<li>The HK SAR government is set to relax the dining-in restrictions and a number of listed F&amp;B operators shall benefit</li>
<li>
<a href="https://www.smartkarma.com/entities/tsui-wah-holdings-ltd" target="_blank" data-smartkarma-citation="entities:7198:1" rel="noopener">Tsui Wah Holdings (1314 HK)</a> is the odd one out as it has only 50% of its revenues from HK and the rest are from China. </li>
<li>
<a href="https://www.smartkarma.com/entities/cafe-de-coral-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2568:1" rel="noopener">Cafe De Coral Holdings (341 HK)</a> and <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 (2217 HK)</a> are set to benefit the most given the market capitalization and the outstanding profitability. </li>
</ul>


The HK SAR government is set to relax the dining-in restrictions and a number of listed F&amp;B operators shall benefit

Tsui Wah Holdings (1314 HK) is the odd one out as it has only 50% of its revenues from HK and the rest are from China. 

Cafe De Coral Holdings (341 HK) and Tam Jai International (2217 HK) are set to benefit the most given the market capitalization and the outstanding profitability. 


Hong Kong F&B: Restrictions Lifting Winners and Losers

Equity Bottom-Up

<ul>
<li>FY 2025 results were not that great, but 2H numbers are rather encouraging, with net profit rallying 151%.</li>
<li>Despite a rather weak result, Cafe de Coral has no issue with generating operating cash flow and can pay a dividend out of the current balance for 4.4 years.</li>
<li>
<a href="https://www.smartkarma.com/entities/cafe-de-coral-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2568:1" rel="noopener">Cafe de Coral (341 HK)</a> currently trades at 0.8x PBR, 50% lower than the 1.5x in a normal environment, while in an expansionary environment, it traded up to 3x PBR. </li>
</ul>


FY 2025 results were not that great, but 2H numbers are rather encouraging, with net profit rallying 151%.
Despite a rather weak result, Cafe de Coral has no issue with generating operating cash flow and can pay a dividend out of the current balance for 4.4 years.

Cafe de Coral (341 HK) currently trades at 0.8x PBR, 50% lower than the 1.5x in a normal environment, while in an expansionary environment, it traded up to 3x PBR. 


Cafe De Coral (341): Deep Discount and Dividend

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Despite some disgruntled investors, the privatisation of <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 (2217 HK)</a> is appealing. If it is successful, payment will be made on or before 26 Aug. </li>
<li>The proposed price of HK$1.58 equals a 24% premium to the peer CY25F PER. The poor reported peer results and earnings downgrades are the reasons for a narrower premium.</li>
<li>Since the announcement of privatisation, the sector has retreated by 7.8%, vs. a 5.2% gain in HSI, reflecting the industry's tough operating environment. It remains wise to exit. </li>
</ul>


Despite some disgruntled investors, the privatisation of Tam Jai International (2217 HK) is appealing. If it is successful, payment will be made on or before 26 Aug. 
The proposed price of HK$1.58 equals a 24% premium to the peer CY25F PER. The poor reported peer results and earnings downgrades are the reasons for a narrower premium.
Since the announcement of privatisation, the sector has retreated by 7.8%, vs. a 5.2% gain in HSI, reflecting the industry's tough operating environment. It remains wise to exit. 


Tam Jai Intl (2217 HK): Privatisation Stays Appealing Despite...

<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 (2217 HK)</a>'s privatisation price is lower than we expected, based on 1.37x 12-month forward P/B, against our expectation of 1.63x (the historical average).</li>
<li>The PER of 21.1x for CY25, a premiuim to sector average of 13.7x, however, looks attractive enough for investors that entered in the last 12 months. </li>
<li>The 52.6% discount to IPO price (HK$3.33) and huge net cash have made some early investors unhappy. There is already letter from a minority shareholder calling to vote against it.</li>
</ul>



Tam Jai International (2217 HK)'s privatisation price is lower than we expected, based on 1.37x 12-month forward P/B, against our expectation of 1.63x (the historical average).
The PER of 21.1x for CY25, a premiuim to sector average of 13.7x, however, looks attractive enough for investors that entered in the last 12 months. 
The 52.6% discount to IPO price (HK$3.33) and huge net cash have made some early investors unhappy. There is already letter from a minority shareholder calling to vote against it.


Tam Jai Intl (2217 HK): It Seems like Quite Some People Are Unhappy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tam-jai-international-co-ltd" target="_blank" rel="noopener">Tam Jai Intl (2217 HK)</a>'s suspension has led to speculation about a privatisation or takeover. Its huge net cash, equal to 115% of market capitalisation, makes it appealing. </li>
<li>Its controlling shareholder Toridoll Holding Limited owns a 74.61% stake and there is no shareholder with more than a 5% interest. This makes a deal seemingly simple.</li>
<li>Assuming priced at the average P/B of 1.63x, this means HK$1.90, or 110% premium to the latest close, which is costly to the major shareholder.</li>
</ul>



Tam Jai Intl (2217 HK)'s suspension has led to speculation about a privatisation or takeover. Its huge net cash, equal to 115% of market capitalisation, makes it appealing. 
Its controlling shareholder Toridoll Holding Limited owns a 74.61% stake and there is no shareholder with more than a 5% interest. This makes a deal seemingly simple.
Assuming priced at the average P/B of 1.63x, this means HK$1.90, or 110% premium to the latest close, which is costly to the major shareholder.


Tam Jai Intl (2217 HK): Is It Privatisation or Takeover?

Hong Kong

Tai Hing Group Holdings Limited is an investment holding company primarily engaged in restaurant operations and management, and the sale of food products. It operates a multi-brand casual dining restaurant group with over 200 restaurants across Hong Kong, Macau, and Mainland China. The company was founded in 1989 and is headquartered in Quarry Bay, Hong Kong.

Price Gauge
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Tai Hing (6811 HK)

Hong Kong F&B: Restrictions Lifting Winners and Losers

Cafe de Coral is a familiar name but Tam Jai has a different offering and the management is capable to upsell other products incorporated in the...

Henry Soediarko

Cafe De Coral (341): Deep Discount and Dividend

Cafe de Coral's FY 2025 results were weak, but 2H numbers are better, with strong operating cash flow and dividend capacity for 4.4 years. Trading...

Henry Soediarko

Tam Jai Intl (2217 HK): Privatisation Stays Appealing Despite...

Some investors may be unhappy, but Tam Jai's privatisation is attractive at HK$1.58, offering a 24% PER premium to peers. Given sector challenges,...

Osbert Tang, CFA

Tam Jai Intl (2217 HK): It Seems like Quite Some People Are Unhappy

The privatisation price is lower than expected at 1.37x forward P/B, but CY25 PER of 21.1x is attractive for recent investors. A 52.6% discount to...

Osbert Tang, CFA

Tam Jai Intl (2217 HK): Is It Privatisation or Takeover?

Tam Jai Intl's suspension sparks privatisation or takeover speculations, given its high net cash and simple ownership structure. However, a...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong F&B: Restrictions Lifting Winners and Losers

Cafe de Coral is a familiar name but Tam Jai has a different offering and the management is capable to upsell other products incorporated in the...

Henry Soediarko

Cafe De Coral (341): Deep Discount and Dividend

​Cafe de Coral's FY 2025 results were weak, but 2H numbers are better, with strong operating cash flow and dividend capacity for 4.4 years. Trading...

Henry Soediarko

Tam Jai Intl (2217 HK): Privatisation Stays Appealing Despite...

Some investors may be unhappy, but Tam Jai's privatisation is attractive at HK$1.58, offering a 24% PER premium to peers. Given sector challenges,...

Osbert Tang, CFA

Tam Jai Intl (2217 HK): It Seems like Quite Some People Are Unhappy

​The privatisation price is lower than expected at 1.37x forward P/B, but CY25 PER of 21.1x is attractive for recent investors. A 52.6% discount to...

Osbert Tang, CFA

Tam Jai Intl (2217 HK): Is It Privatisation or Takeover?

​Tam Jai Intl's suspension sparks privatisation or takeover speculations, given its high net cash and simple ownership structure. However, a...

Osbert Tang, CFA

Cafe de Coral's FY 2025 results were weak, but 2H numbers are better, with strong operating cash flow and dividend capacity for 4.4 years. Trading...

The privatisation price is lower than expected at 1.37x forward P/B, but CY25 PER of 21.1x is attractive for recent investors. A 52.6% discount to...

Tam Jai Intl's suspension sparks privatisation or takeover speculations, given its high net cash and simple ownership structure. However, a...