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>On 5th July 2024, <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>  submitted an application to Hkex to transfer the listing of all its issued Shares from GEM to the Main Board. </li>
<li>The company's case is strong as it meets all the criteria proposed by the exchange, but there is no assurance that it will obtain relevant approval from the exchange. </li>
<li>Trading at 6.4x/5.2x PE FY24/25e with 25% of the market cap in net cash and a trailing yield of 8.5%, we believe a mainboard listing would provide incremental visibility. </li>
</ul>


On 5th July 2024, Taste Gourmet (8371 HK)  submitted an application to Hkex to transfer the listing of all its issued Shares from GEM to the Main Board. 
The company's case is strong as it meets all the criteria proposed by the exchange, but there is no assurance that it will obtain relevant approval from the exchange. 
Trading at 6.4x/5.2x PE FY24/25e with 25% of the market cap in net cash and a trailing yield of 8.5%, we believe a mainboard listing would provide incremental visibility. 


Taste Gourmet (8371 HK): GEM to Mainboard Listing Catalyst in Play

<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> will report its FY24 results in the third week of June. We estimate revenue/earnings growth of 38%/40% YoY. </li>
<li>We expect the company to end FY24 with &gt;180 mn HKD of net cash on the balance sheet, representing 32% of the mkt cap (9MFY23 cash 148 mn HKD)</li>
<li>Maintaining a 50% dividend payout ratio, we expect the company to declare a final DPS of 7 cents ( H1FY24 5.5 cents HKD), representing an 8.5% yield for FY24</li>
</ul>



Taste Gourmet (8371 HK) will report its FY24 results in the third week of June. We estimate revenue/earnings growth of 38%/40% YoY. 
We expect the company to end FY24 with &gt;180 mn HKD of net cash on the balance sheet, representing 32% of the mkt cap (9MFY23 cash 148 mn HKD)
Maintaining a 50% dividend payout ratio, we expect the company to declare a final DPS of 7 cents ( H1FY24 5.5 cents HKD), representing an 8.5% yield for FY24


Taste Gourmet (8371 HK): Earnings Preview FY24

<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 revenue of 37% YoY Q3 2024, with profits up 37% YoY (  lower than our 50% YoY estimate). 9M FY23 revenue/profits were up 43%/43% YoY. </li>
<li>We look forward to the mainboard listing. We believe the process will commence when FY24 results are out in June. </li>
<li>The stock trades at 5.8x PE FY24e, with a potential dividend yield of 8.5% and cash around 26% of its market capitalization at 147.7 mn HKD.</li>
</ul>



Taste Gourmet (8371 HK) reported revenue of 37% YoY Q3 2024, with profits up 37% YoY (  lower than our 50% YoY estimate). 9M FY23 revenue/profits were up 43%/43% YoY. 
We look forward to the mainboard listing. We believe the process will commence when FY24 results are out in June. 
The stock trades at 5.8x PE FY24e, with a potential dividend yield of 8.5% and cash around 26% of its market capitalization at 147.7 mn HKD.


Taste Gourmet Q3 2024: Good Performance Cruise Into Q4 with Catalysts

<ul>
<li>We expect Q3 FY24 revenues/profits to be &gt;40%/&gt;70% YoY for <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> for their results in early February. </li>
<li>Another catalyst we look forward to in CY24 is the main board listing on HKex. The timeline, we believe, should be in the second half of the year.</li>
<li>Trading at 6x PE with an 8.5% dividend yield and cash of 130 mn HKD, or about 21% of the market cap, is one of our top dividend gems.</li>
</ul>


We expect Q3 FY24 revenues/profits to be &gt;40%/&gt;70% YoY for Taste Gourmet (8371 HK) for their results in early February. 
Another catalyst we look forward to in CY24 is the main board listing on HKex. The timeline, we believe, should be in the second half of the year.
Trading at 6x PE with an 8.5% dividend yield and cash of 130 mn HKD, or about 21% of the market cap, is one of our top dividend gems.


Taste Gourmet (8371 HK): Q3 FY24 Preview and Future Catalysts

<ul>
<li>With 46 restaurants in HK (up 35% YoY) and the end of dining restrictions, we estimate an inflection point in earnings for Q2 FY24 for <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> </li>
<li>We estimate revenues/earnings up 45%/40% YoY for Q2 2024 ( to be reported in November) and that the company declares a semi-annual dividend of around 5.5-6 cents (8% annualized). </li>
<li>With a solid base for H2 2024, the stock trades at 8.5x/5.9x PE FY23/24e and a 10% FY24e dividend yield with 23% of the market cap in cash.</li>
</ul>


With 46 restaurants in HK (up 35% YoY) and the end of dining restrictions, we estimate an inflection point in earnings for Q2 FY24 for Taste Gourmet (8371 HK) 
We estimate revenues/earnings up 45%/40% YoY for Q2 2024 ( to be reported in November) and that the company declares a semi-annual dividend of around 5.5-6 cents (8% annualized). 
With a solid base for H2 2024, the stock trades at 8.5x/5.9x PE FY23/24e and a 10% FY24e dividend yield with 23% of the market cap in cash.


Taste Gourmet: Reaching an Inflection Point on Earnings Solid H1 FY24 Expected

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)