Core Insights - TH International Limited, the exclusive operator of Tim Hortons in China, celebrates its seventh anniversary in the country, highlighting its commitment to growth and community connection [1][2]. Company Overview - Tims China has expanded its presence since entering the market in 2019, achieving over 1,000 stores in nearly 100 cities and successfully listing on Nasdaq [3]. - The brand differentiates itself in the competitive coffee market with its "Coffee + Freshly Prepared Food" positioning [3]. Strategic Partnerships and Promotions - To celebrate its anniversary, Tims China has partnered with Air Canada to offer a special promotion, providing four round-trip tickets between Shanghai and a city in Canada, aimed at thanking its 31 million Club Members [3][6]. - The partnership emphasizes the connection between Canada, the brand's origin, and Shanghai, its operational hub [4]. Expansion and Market Strategy - Tims China has strategically expanded into key transportation hubs, including airports and high-speed rail stations, enhancing accessibility for travelers [5]. - The company aims to continue optimizing its "Coffee + Freshly Prepared Food" strategy, focusing on local preferences and leveraging digitalization and innovation [6]. Company Philosophy - Tims China's operational philosophy is centered on world-class execution, data-driven decision-making, local relevance, continuous innovation, community engagement, and convenience [8].

每经AI快讯，纳斯达克中国金龙指数收涨1.36%，嘉楠科技涨15.90%，Tims中国涨8.57%，世纪互联涨 6.68%，小鹏汽车涨6.69%，大全新能源涨6.64%。 ...

Core Viewpoint - Tims China reported revenue growth in Q3 2025, while its stock price has experienced volatility recently [1] Financial Performance - Tims China announced total revenue of 358 million RMB for Q3 2025, with system sales increasing by 12.8% year-on-year to 420 million RMB, and same-store sales growth of 3.3% [2] - The company has a total of 1,030 stores, comprising 551 self-operated and 479 franchised, covering 91 cities nationwide [2] Strategic Initiatives - The company is optimizing its debt and issuing convertible bonds to reserve funds for store network optimization and expansion plans over the next three to five years, focusing on franchise business expansion and operational efficiency improvement [3] Stock Performance - On January 7, 2026, Tims China (THCH.us) stock price fell by 6.51% to $2.44 per share, with a trading volume of 4,805 shares and a fluctuation of 3.07%. The stock had previously risen by 5.16% to $2.65 per share on January 6 [4] - The latest available data shows the stock's price-to-earnings ratio at -1.76, with no significant recent price movements [4] Institutional Insights - Currently, no brokerage firms have issued "buy," "hold," or "sell" ratings for the stock. Industry analysis indicates that competition in the coffee sector has normalized, and companies need to maintain growth resilience through differentiated products and efficient operations [5]

Core Insights - The coffee industry in China is experiencing significant expansion, with new brands like Luckin Coffee and Nova Coffee joining the "10,000 store club," indicating a shift in industry dynamics [1][2] - The competitive landscape is marked by aggressive price wars, leading to concerns about profitability for franchisees and established brands alike [2][3] Group 1: Industry Expansion - By December 2025, the number of coffee stores in China surpassed 10,000 for both Luckin Coffee and Nova Coffee, joining existing players like Luckin and Kudi [1] - The current market includes four major brands with over 10,000 stores each, highlighting a rapidly evolving competitive environment [1] - Nova Coffee's unique "coffee + convenience store" model has contributed to its rapid growth, achieving a 210% increase in daily cup sales through partnerships [1] Group 2: Competitive Dynamics - The coffee market is projected to reach nearly 250 billion yuan by 2024, with an expected growth rate of around 20% [3] - The number of coffee consumers in China is anticipated to double from 130 million in 2023 to 260 million by 2028, indicating substantial market potential [3] - Price wars initiated in 2023 have intensified competition, with brands adopting low-price strategies that have led to reduced profit margins for franchisees [3][4] Group 3: Consumer Behavior - Consumer preferences are shifting towards high-cost performance coffee, with a significant portion of consumers favoring lower-priced options [5] - A report indicates that 51.9% of consumers prefer new beverage products priced between 15-20 yuan, while only 4% are willing to pay over 25 yuan [5] Group 4: Future Directions - As competition escalates, brands are exploring various strategies to differentiate themselves, with Starbucks planning to expand its store count significantly [6] - Tims Coffee is focusing on differentiation by introducing complementary food items, aiming to stand out in a crowded market [6] - The market is expected to see a shift towards lower price points and a focus on convenience, with brands needing to adapt to survive [7]

Investment Rating - The report maintains a positive outlook on the consumer sector, emphasizing the importance of domestic demand and consumption recovery [1]. Core Insights - The consumer sector experienced a decline across various segments, with notable drops in retail, social services, food and beverage, beauty care, home appliances, and textiles [3]. - High-end liquor, particularly Moutai, is showing signs of bottoming out despite a significant price drop, indicating potential recovery as demand stabilizes [3]. - The central economic work conference highlighted the commitment to boosting domestic consumption, with policies aimed at increasing residents' income and optimizing supply of quality goods and services [3]. - The report suggests focusing on service consumption sectors, which have room for growth compared to developed countries [3]. Summary by Sections Market Weekly Review - The consumer sector saw a broad decline, with specific weekly performance metrics indicating negative trends across various sub-sectors [3][5]. - Notable stock performances included significant gains for certain companies, while others faced substantial losses [3][13][14]. Industry News and Key Company Announcements - Recent regulatory approvals and policy initiatives are expected to impact various sectors, including tourism and electric vehicles, with a focus on enhancing consumer experiences and market growth [15][16][19]. - Companies like Tim Hortons and others reported positive financial results, indicating resilience in the consumer market despite broader sector challenges [19][20].

Core Insights - TH International Limited, known as Tims China, reported an earnings per share (EPS) of -$0.31, missing the estimated EPS of -$0.14, and actual revenue of approximately $50.3 million, below the expected $55.5 million [1][6] Financial Performance - The company experienced a year-over-year increase in system sales of 12.8%, reaching RMB419.9 million [2] - Total revenues slightly decreased by 0.4% from the same quarter in 2024, amounting to RMB358.0 million, or approximately USD50.3 million [2] - The company has a negative price-to-earnings ratio of -1.66 and an earnings yield of -0.60, indicating a lack of profitability [4] - The enterprise value to operating cash flow ratio is significantly negative at -49.41, suggesting potential cash flow generation issues [4] Debt and Liquidity - The debt-to-equity ratio is negative at -1.90, indicating a higher level of debt compared to equity, which raises concerns about financial stability [5] - The current ratio is low at 0.26, suggesting potential liquidity issues in meeting short-term obligations [5] Growth and Expansion - Tims China ended the quarter with 27.9 million registered loyalty club members, marking a 22.3% increase compared to the previous year [3] - The company reported a net opening of 15 new stores, including 38 new made-to-order (MTO) stores and the closure of 23 non-MTO stores, including seven Tims Express locations [3]

Financial Data and Key Metrics Changes - In Q3 2025, the company achieved a 12.8% year-over-year growth in system sales, with food revenues increasing by 24.2% year-over-year [4][5] - The adjusted corporate EBITDA improved by 10.4% and adjusted net loss improved by 11.5% year-over-year [5] - The average monthly transacting customers reached 3.85 million, a 16.7% increase from the same quarter in 2024 [12] - Digital orders as a percentage of total orders rose to an all-time high of 91.0% [12] Business Line Data and Key Metrics Changes - Company-owned and operated store revenues dropped by 5.5% year-over-year, primarily due to planned closures of underperforming stores [12] - Same-store sales growth for company-owned and operated stores was positive at 3.3% [12] - Revenues from the franchise and retail business increased by 25.0% year-over-year, with the number of franchise stores growing from 382 to 479 [14] Market Data and Key Metrics Changes - The company expanded its store footprint into 91 cities, with significant growth in loyalty club members reaching 27.9 million, a 22.3% year-over-year increase [6][7] - The coffee sector faced intensified competition from rapidly expanding tea beverage categories, impacting market dynamics [8] Company Strategy and Development Direction - The company is focused on enhancing operational efficiencies, supply chain capabilities, and rigorous cost controls to support sustainable profit growth [17] - Strategic initiatives include expanding into special channel stores, such as high-speed train stations and airports, which have shown strong performance [31] - The company aims to improve gross margins through supply chain optimizations and new product launches [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from competitive pressures but expressed confidence in the company's resilience and ability to adapt [18] - The company anticipates achieving double-digit store level margins next year through various strategic initiatives [28] - Management highlighted the importance of maintaining a strong brand presence and customer engagement through targeted marketing efforts [8] Other Important Information - The company successfully issued approximately $89.9 million in senior secured convertible notes, restructuring its financing to focus on operational growth [19] - The company reported a negative adjusted corporate EBITDA margin of 4.2% in Q3 2025, compared to a positive margin in the same quarter of 2024 [16] Q&A Session Summary Question: Company's liquidity status and long-term financing plan - The company raised $89.9 million through convertible notes and repurchased previous convertible notes, eliminating near-term offshore liabilities and allowing focus on daily operations [24] Question: Pressure on store contribution margins and future margin profile - The lower store contribution margin was attributed to a higher delivery revenue mix due to competitive pricing strategies, which is expected to be temporary [27] - The company aims to enhance gross margins and achieve mid- to high-teens contribution margins through various strategies [28] Question: Performance of strategic special channel stores - Special channel stores have performed well, generating mid- to high-teens EBITDA margins with a payback period of around two years [31]

Financial Data and Key Metrics Changes - In Q3 2025, the company achieved a 12.8% year-over-year growth in system sales, with food revenues increasing by 24.2% year-over-year [4][12] - Adjusted Corporate EBITDA improved by 10.4% year-over-year, while Adjusted Net Loss improved by 11.5% [5] - The average monthly transacting customers reached 3.85 million, a 16.7% increase from the same quarter in 2024 [12] - Company-owned and operated store revenues dropped by 5.5% year-over-year due to planned store closures [12][14] Business Line Data and Key Metrics Changes - Same-store sales growth for company-owned and operated stores was 3.3%, contributing to overall positive performance despite revenue drops [4][12] - Revenues from the franchise and retail business increased by 25.0% year-over-year, with the number of franchise stores rising from 382 to 479 [12][13] - Delivery revenues increased by 23.1% year-over-year, benefiting from promotional offers from delivery aggregators [4] Market Data and Key Metrics Changes - The largest loyalty club members reached 27.9 million, reflecting a 22.3% year-over-year growth [7] - The coffee sector faced intensified competition from rapidly expanding tea beverage categories, impacting market dynamics [8] Company Strategy and Development Direction - The company is focused on enhancing operational efficiencies, supply chain capabilities, and rigorous cost controls to support sustainable profit growth [17] - Strategic initiatives include expanding into special channel stores, such as high-speed train stations and airports, which have shown strong performance [29] - The company aims to improve gross margins through supply chain optimizations and new product launches [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the industry but emphasized resilience and continuous improvement in business execution [18] - The company expects to generate positive operating cash inflows and become more self-sustainable in supporting long-term growth [24][26] Other Important Information - The company successfully issued approximately $89.9 million in senior secured convertible notes and restructured existing convertible notes to focus on store network development [19] - The average payback period for sub-franchisees is two to three years, indicating attractive unit economics [6][18] Q&A Session Summary Question: Company's liquidity status and long-term financing plan - Management highlighted the successful issuance of $89.9 million in convertible notes and the extension of due dates for existing notes, allowing focus on daily operations and reducing leverage [22][23] Question: Pressure on store contribution margins and future margin profile - Management noted that lower margins were due to higher delivery revenue mix and aggressive subsidies from delivery platforms, expecting this to be temporary [26] - Plans to improve gross margins include supply chain optimizations and new product launches, aiming for double-digit store level margins next year [27] Question: Performance of strategic special channel stores - Special channel stores have performed well, generating mid- to high-teens EBITDA margins with a payback period of around two years [29]

Core Insights - Tims China reported a total revenue of 358 million RMB for Q3 2025, with system sales reaching 420 million RMB, reflecting a year-on-year growth of 12.8% [1] - The company has expanded its store count to 1,030, marking a historical high, with 551 self-operated stores and 479 franchised stores across 91 cities in China [1] - The membership system has seen significant growth, with total registered members reaching 27.9 million, a 22.3% increase year-on-year, and an average of over 27,100 members per store [1] Financial Performance - Tims China achieved a positive net increase in store count and continued strong growth in system sales, with same-store sales in self-operated locations increasing by 3.3% [2] - Other income profits grew by 58.2% year-on-year, contributing to stable cash flow and profitability from franchise and retail operations [2] - The company successfully issued approximately 89.9 million USD in secured convertible bonds, improving its financial structure and providing crucial funding for future growth [2] Company Background - Tims China holds exclusive franchise rights for Tims Coffee in mainland China, Hong Kong, and Macau, supported by private equity firm Cartesian Capital and Restaurant Brands International [3] - The brand focuses on combining advanced management practices with data-driven strategies, emphasizing localized products, continuous innovation, and convenience [3]

Trademarks and Trade Names This Presentation contains trademarks, service marks and trade names of third parties, which are the property of their respective owners. The use or display of third parties' trademarks, service marks, trade names or products in this Presentation is not intended to, and does not imply, a relationship with THIL, or an endorsement or sponsorship by or of THIL. Solely for convenience, the trademarks, service marks and trade names referred to in this Presentation may appear without th ...