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TH International (THCH)
NASDAQ:THCH
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TH International
(NASDAQ:THCH)
38Underperform
TH International (THCH) vs. S&P 500 (SPY)
Market Cap
$104.23M
Dividend YieldN/A
Average Volume (3M)15.63K
Price to Earnings (P/E)―
Beta (1Y)0.60
Revenue Growth-2.48%
EPS Growth24.95%
CountryUS
Employees4,621
SectorConsumer Cyclical
Sector Strength48
IndustryRestaurants & Bars
Share Statistics
EPS (TTM)-0.57
Shares Outstanding33,193,190
10 Day Avg. Volume12,356
30 Day Avg. Volume15,633
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.46
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
TH International Business Overview & Revenue Model
Company DescriptionTH International Limited (THCH) is a leading quick-service restaurant operator, primarily known for its franchise operations of the globally recognized Tim Hortons brand in China. The company focuses on providing high-quality coffee and food items, catering to the growing demand for convenient and premium dining experiences in the region. With a strong emphasis on customer service and innovative menu offerings, TH International aims to capture a significant share of the fast-growing coffee market in China.
How the Company Makes MoneyTH International makes money through its franchise operations by managing and expanding Tim Hortons outlets across China. The company's revenue streams include sales of beverages and food items directly from its stores. Additionally, TH International may generate income from franchise fees and royalties paid by franchisees, as well as partnerships with local suppliers and marketing collaborations that enhance brand visibility and drive customer traffic to its locations. The company's earnings are significantly influenced by its ability to scale its operations, optimize supply chain efficiencies, and adapt to consumer preferences in the Chinese market.
TH International Financial Statement Overview
Summary
TH International exhibits significant financial challenges, including declining revenue, negative margins, and a precarious balance sheet with negative equity. Cash flow issues further exacerbate the risk, necessitating strategic improvements.Income Statement
TH International has experienced a decline in revenue from the previous year based on TTM data, accompanied by negative margins including a net profit margin of -40.47% and a gross profit margin of 26.75%. The company is struggling to convert revenue into profit, as evidenced by negative EBIT and EBITDA margins. Revenue growth has not been consistent, indicating challenges in market traction.22
Negative
Balance Sheet
The company exhibits financial instability with a negative stockholders' equity of -691.35 million, indicating potential solvency issues. The debt-to-equity ratio cannot be calculated as equity is negative, highlighting financial risk. Total liabilities exceed total assets, further stressing the company's balance sheet. These factors suggest significant financial vulnerability.15
Very Negative
Cash Flow
Negative free cash flow of -381.01 million and operating cash flow of -88.60 million suggest challenges in generating cash from operations. The free cash flow to net income ratio is below optimal, indicating inefficiencies. Despite some improvement from prior years, cash flow remains a critical concern for sustainability.18
Very Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.46B | 1.58B | 1.01B | 643.37M | 212.08M | 57.26M | Gross Profit |
| 391.59M | 417.16M | 33.05M | 13.81M | 6.62M | -17.15M | EBIT |
| -472.19M | -701.18M | -565.13M | -371.92M | -141.17M | -91.26M | EBITDA |
| -316.10M | -407.45M | -431.72M | -302.90M | -115.22M | -79.13M | Net Income Common Stockholders |
| -592.61M | -876.25M | -910.17M | -378.05M | -142.00M | -87.65M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 218.18M | 227.00M | 611.45M | 390.84M | 174.87M | 263.12M | Total Assets |
| 2.04B | 2.22B | 2.64B | 1.28B | 580.36M | 444.00M | Total Debt |
| 1.67B | 1.87B | 1.77B | 522.42M | 0.00 | 0.00 | Net Debt |
| 1.47B | 1.67B | 1.53B | 131.59M | -174.87M | -260.44M | Total Liabilities |
| 2.61B | 2.64B | 2.53B | 945.80M | 147.31M | 65.52M | Stockholders Equity |
| -573.37M | -427.21M | 108.85M | 335.54M | 428.29M | 366.77M |
| Cash Flow | Free Cash Flow | ||||
| -381.01M | -488.53M | -621.86M | -580.28M | -290.52M | -133.22M | Operating Cash Flow |
| -88.60M | -196.13M | -286.93M | -244.97M | -145.77M | -77.12M | Investing Cash Flow |
| -89.20M | 60.00M | -705.17M | -335.28M | -144.75M | -56.09M | Financing Cash Flow |
| -103.40M | 80.83M | 827.16M | 798.00M | 221.12M | 212.80M |
TH International Technical Analysis
Negative
3.01
Price Trends
3.13
Negative
3.45
Negative
3.51
Negative
Market Momentum
>-0.01
Positive
43.63
Neutral
16.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THCH, the sentiment is Negative. The current price of 3.01 is below the 20-day moving average (MA) of 3.15, below the 50-day MA of 3.13, and below the 200-day MA of 3.51, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.63 is Neutral, neither overbought nor oversold. The STOCH value of 16.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for THCH.
TH International Risk Analysis
TH International disclosed 88 risk factors in its most recent earnings report. TH International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TH International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $64.77B | 43.97 | 45.67% | ― | 14.61% | 25.68% | |
76 Outperform | $216.91B | 26.65 | -216.57% | 2.23% | 1.67% | -1.61% | |
73 Outperform | $43.90B | 30.17 | -19.43% | 1.73% | 6.68% | -7.09% | |
67 Neutral | $111.64B | 31.76 | -47.07% | 2.40% | -1.48% | -17.32% | |
63 Neutral | $15.53B | 27.12 | -14.74% | 1.33% | 5.07% | 13.74% | |
59 Neutral | $12.27B | 11.26 | 2.24% | 3.68% | 1.36% | -19.40% | |
38 Underperform | $104.23M | ― | ― | -2.48% | 24.95% |
* Consumer Cyclical Sector Average
Performance Comparison
THCH
TH International
3.04
-2.86
-48.47%
CMG
Chipotle
49.00
-9.10
-15.66%
DPZ
Domino's Pizza
466.05
16.48
3.67%
MCD
McDonald's
307.00
30.20
10.91%
SBUX
Starbucks
99.28
9.90
11.08%
YUM
Yum! Brands
157.89
23.95
17.88%
TH International Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: -17.31% | Next Earnings Date: Apr 3, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with significant achievements in profitability, operational efficiency, and membership growth, despite challenges such as cash reserves reduction and intense price competition. The company's strategic focus on product differentiation and capital-efficient growth is driving positive outcomes.Highlights
Achieved Adjusted Corporate EBITDA Profitability
Maintained adjusted corporate EBITDA profitability in Q3 2024, after achieving it for the first time in Q2 2024, despite price competition in the Chinese coffee market.
Record Store Contribution Margin
Achieved the highest-ever quarterly company-owned and operated store contribution margin of 13.3%, a year-over-year margin expansion of 5.8 percentage points.
Growth in Loyalty Program Membership
Registered loyalty club members reached 22.8 million, reflecting a 35.3% year-over-year growth.
Successful Franchise Expansion
Received over 5,000 sub-franchise applications, opened 43 stores, and signed 94 additional agreements by the end of September 2024.
Introduction of New Products
Launched 10 new beverages and 9 new food items in Q3 2024, focusing on healthy ingredients and freshly handmade principles.
Operational Efficiency Improvements
Reduced food and packaging costs by 6.1 percentage points, labor costs by 3.0 percentage points, and marketing expenses by 2.3 percentage points year-over-year.
Capital-Efficient Growth Strategy
Continued focus on capital-efficient growth through small-format stores and a growing sub-franchisee network.
Lowlights
Cash and Cash Equivalents Decrease
Total cash and cash equivalents decreased from RMB 219.5 million at the end of 2023 to RMB 203.7 million as of September 30, 2024.
Ongoing Price Competition
Ongoing price competition in the Chinese coffee market, which is longer than expected, affecting pricing strategies.
Company Guidance
During the Tims China Q3 2024 earnings call, the company provided several key performance metrics that highlight its financial and operational achievements. Tims China maintained adjusted corporate EBITDA profitability amid intense price competition in the Chinese coffee market. The company reported its highest-ever quarterly company-owned and operated store contribution margin at 13.3%, with a year-over-year margin expansion of 5.8 percentage points. The company introduced 10 new beverages and 9 new food items, while also launching a successful Chibaobao Card that boosted purchase frequency by 4.6 times for cardholders. Tims China sold over 120,000 of these cards in Q3, contributing to a total revenue of RMB 7.6 million. The loyalty program saw a 35.3% year-over-year growth, reaching 22.8 million registered members by September 30, 2024. Additionally, the company expanded its sub-franchising efforts, receiving over 5,000 applications and opening 43 stores, with plans for further growth. Furthermore, digital orders increased to 86.6% of total orders, reflecting enhanced digital capabilities. The company also achieved a reduction in food and packaging costs by 6.1 percentage points year-over-year, alongside a decrease in marketing and administrative expenses, indicating improved operational efficiency.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.