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Public company info - Kafelaku Coffee Holding Limited , 01869.HK
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Kafelaku Coffee Holding Limited, 01869.HK - Company Profile
Chairman Chan Chun Kit
Share Issued (share) 1,000,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Restaurants & Fast Food Shops
Corporate Profile Business Summary: The group is principally engaged in the operation of a chain of Chinese restaurants in Hong Kong and the People’s Republic of China (the “PRC”). Performance for the year: The revenue of the Group amounted to approximately HK$236.4 million for the year ended 31 December 2020, representing a decrease of approximately 33.0% as compared with the year ended 31 December 2019. The loss attributable to owners of the Company amounted to approximately HK$39.8 million for the year ended 31 December 2020, representing a decrease in loss of approximately 32.9% as compared with a loss attributable to owners of the Company of approximately HK$59.3 million for the year ended 31 December 2019. Business Review The Group’s total revenue for the year ended 31 December 2020 mainly comprised the aggregate revenue of the six Chinese restaurants in Hong Kong of approximately HK$71.7 million (2019: approximately HK$180.9 million), revenue from the sales of food ingredients of approximately HK$0.2 million (2019: approximately HK$0.1 million), the revenue of the Thai (Mongkok) Restaurant of approximately HK$7.6 million (2019: approximately HK$6.3 million), the revenue of the three Chinese restaurants in Shenzhen, the PRC of approximately HK$136.6 million (2019: approximately HK$159.2 million), the revenue of the small scale dim sum tea houses in Shenzhen, the PRC of approximately HK$0.7 million (2019: approximately HK$4.8 million), and the revenue from Freshippo operation inside Shenzhen and Shanghai Freshippo stores of approximately HK$19.6 million (newly opened or acquired in 2020). Excluding the revenue contributed by the Sheung Wan Restaurant and the Beijing House Restaurant which were ceased operation in February 2020, the aggregate revenue of the Group’s four Chinese restaurants in Hong Kong for the year ended 31 December 2020 decreased by approximately 49.2% as compared to the year ended 31 December 2019. On the other hand, the aggregate revenue of the Group’s two Chinese restaurants in Shenzhen (excluding the Shenzhen One Avenue Restaurant which was newly opened in December 2019) decreased by approximately 29.1% over the same period. The Directors consider such decrease in revenue for both Hong Kong and Shenzhen regions was mainly due to the outbreak of COVID-19 and suspension of business in accordance with the anti-infection measures implemented by the government. Furthermore, the social unrest in Hong Kong which occurred in June 2019 and lasted over year 2020 seriously affected the retail and catering sectors in Hong Kong. Prospects: The successful Listing and the Transfer of Listing marked major milestones as well as new chapters of the Company. Nevertheless, due to the uncertainties of the Hong Kong and China economies and the outbreak of COVID-19 in Hong Kong and China since January 2020 which seriously affected the catering industry and is expected to continue throughout 2021, the Directors anticipate that the Group’s business will face various challenges in the foreseeable future. The Group’s key risk exposures and uncertainties are summarised as follows: (i) the Group’s future success relies heavily on its ability to constantly offer menu items, creatively-designed banquet and dining services based on changing market trends and changing tastes, dietary habits, expectations and other preferences of the Group’s target customers. As such, significant costs to survey and research customer trends and preferences and to develop and market new menu items, banquet and dining services may be required, this may place substantial burden on the Group’s managerial and financial resources; (ii) the Group may fail to obtain leases of desirable locations for new restaurants or renew existing leases on commercially acceptable terms, and the aforesaid potential failure would have a material adverse effect on the Group’s business and future development; (iii) the operation of the Group may be affected by the price of the food ingredients, including the price of the imported food ingredients which will be affected by the fluctuating exchange rate; (iv) there may be labour shortage in the future and competition for qualified individuals in the food and beverage industry may be intense; (v) the Hong Kong and China economies may be further worsened as a result of the unfavourable development of the China-US trade war which would negatively affect the consumption sentiments of the general public and consequently the retail and catering sectors; and (vi) the outbreak of COVID-19 in Hong Kong and China since January 2020, which may become serious and adversely affect the Group’s restaurant operations in the year to come. Nonetheless, the management is optimistic that the Group can succeed and enhance the Shareholders’ value in the medium to long run, based on the years of experience of the Senior Management in managing Chinese restaurant business in Hong Kong and China and its business strategies as detailed below. The operations of the Group’s food counters inside Freshippo stores which were newly opened in 2020, are expected to be gradually put on track. These new food counters incurred operating loss during the year ended 31 December 2020, the Directors expect their financial performance would improve in the near future. Going forward, the Group’s objective is to become a reputable multi-brand restaurant group with a diverse customer base in Hong Kong and the PRC to provide Chinese cuisines, Chinese banquet and dining services for large-scale events, as well as other non-Chinese cuisines. Although the Group currently does not have specific plan for opening other non-Chinese cuisine restaurants, given that it is the Group’s business philosophy to offer quality food and services at reasonable prices under an elegant and comfortable dining environment, the Group would target to capture the mid-to-high end spending customers when considering the opening of any new non-Chinese cuisine restaurants in the future, in order to maintain the Group’s positioning in the mid-to-high end catering market. The Group will continue to utilise its available resources to implement its business strategies, namely, expansion in Hong Kong with its multi-brand strategy, progressive expansion in the PRC market, continuing promotion of brand image and recognition through marketing initiatives, enhancement of existing restaurant facilities and strengthening of staff training aiming to attract more new customers. Apart from traditional restaurant operations, the Group entered into cooperation agreements with Shenzhen Freshippo and Shanghai Freshippo of Alibaba Group in December 2019 and January 2020 respectively, to set up not less than 10 counters at Freshippo stores in the respective regions, which provide the Group to access the PRC’s growing food delivery and takeaway market through the implementation of the online and offline innovative retail model that integrates physical stores and e-commerce platforms. Please refer to the subsection headed “Business and operational review” above for further details. The Group will also consider the expansion of its catering business into other types of cuisines and operation modes when opportunities arise, taking into account the Group’s available resources, with the aim to maximize the return to its Shareholders.

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