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1. Company Snapshot

1.a. Company Description

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau.As of September 28, 2022, it had approximately 460 coffee shops across the People's Republic of China.The company was incorporated in 2018 and is based in Shanghai, the People's Republic of China.


TH International Limited is a subsidiary of Tim Hortons Inc.

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1.b. Last Insights on THCH

The recent 3-month performance of TH International Limited was negatively impacted by a lack of significant earnings growth, despite the company's efforts to expand its menu offerings. The absence of a Q1 earnings release suggests that the company may have experienced a slow start to the year. Furthermore, the company's participation in conferences, such as the BofA Securities 2025 Consumer & Retail Conference, may have been overshadowed by the lack of substantial news or announcements. The recent launch of new menu items, including the Loaded Power Bowls, may have been a positive development, but its impact on the company's overall performance is unclear.

1.c. Company Highlights

2. Tims China Surpasses Expectations with Strong Q3 2025 Earnings

Tims China's third-quarter financial results revealed a robust performance, with system sales growing 12.8% year-over-year and same-store sales increasing by 3.3%. The company's food revenues jumped 24.2% year-over-year, contributing 36.5% to sales. Notably, the actual EPS loss of $-0.23 was narrower than the estimated loss of $-0.31456. Adjusted corporate EBITDA margin was negative 4.2%, compared to positive 0.6% in the same quarter of 2024. Revenue growth was largely driven by a 25.0% year-over-year increase in revenues from franchised business and retail business, with Albert Li noting a 16.7% increase in monthly average transacting customers.

Publication Date: Dec -20

📋 Highlights
  • System Sales Growth:: Achieved 12.8% YoY increase, with same-store sales up 3.3% and food revenues rising 24.2% to 36.5% of total sales.
  • Franchise and Retail Expansion:: Sub-franchisee program drove 25.0% YoY revenue growth, with 8,400 franchise applications and 300 stores converted.
  • Adjusted Profitability Metrics:: Adjusted EBITDA margin at -4.2% (vs +0.6% prior year), but adjusted net loss fell 11.5% YoY.
  • Loyalty Program Growth:: Registered members reached 27.9 million (22.3% YoY increase), averaging 27,000 members per store.
  • Operational Efficiency Improvements:: Digital orders accounted for 91.0% of total, and capital efficiency supported expansion to 91 cities with 64 strategic locations.

Operational Highlights

The company expanded its store footprint to 91 cities, with 64 stores in strategic locations, including high-speed train stations, airports, and hospitals. Tims China's Registered Loyalty club members reached 27.9 million, with an average of 27,000 members per store. The company's peak season for China's beverage market led to a 22.3% year-over-year growth in loyalty club members, underscoring its strong brand presence.

Strategic Initiatives

Yongchen Lu highlighted the company's strategic initiatives, including a celebrity partnership and enhanced summer beverage portfolio, which contributed to the company's success in capturing incremental share in the summer beverage market. The company executed a series of monthly innovations, leveraging a balanced portfolio of trended SKUs.

Valuation Insights

With a P/S Ratio of 0.37, the stock appears to be reasonably valued relative to its sales. However, the EV/EBITDA ratio of -11.42 suggests that the market is pricing in significant future improvement in profitability. The ROE of 36.11% indicates that the company is generating strong returns on equity, despite the current losses. Analysts estimate next year's revenue growth at 8.3%, which may be a conservative estimate given the company's current momentum.

Outlook

Tims China plans to further enhance its operational efficiencies, including supply chain capabilities and optimizations, and rigorous cost controls to drive traffic and accelerate the expansion of its successful sub-franchising model. The company's focus on developing its overall store network and the core Tim Hortons brand nationwide is expected to drive long-term growth.

3. NewsRoom

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Head to Head Review: Dutch Bros (NYSE:BROS) and TH International (NASDAQ:THCH)

Feb -20

Source: defenseworld.net

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Analyzing Super Hi International (NASDAQ:HDL) & TH International (NASDAQ:THCH)

Dec -22

Source: defenseworld.net

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Comparing TH International (NASDAQ:THCH) and Rocky Mountain Chocolate Factory (NASDAQ:RMCF)

Dec -14

Source: defenseworld.net

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TH International Limited (THCH) Q3 2025 Earnings Call Transcript

Dec -09

Source: seekingalpha.com

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Tims China Announces Third Quarter 2025 Financial Results

Dec -09

Source: globenewswire.com

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Tims China and Tencent’s CarbonXmade Launch Innovative Eco-friendly Straw Made with Captured CO₂

Dec -03

Source:

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TH International (NASDAQ:THCH) Stock Price Down 0.6% – Time to Sell?

Dec -02

Source: defenseworld.net

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Tims China to Announce Third Quarter 2025 Financial Results on December 9, 2025

Nov -12

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.73%)

6. Segments

Tim Hortons

Expected Growth: 4.73%

Tim Hortons' 4.73% growth is driven by strategic expansion in Asia, particularly in China, and increased same-store sales in Canada. Effective marketing campaigns, menu innovation, and digital transformation initiatives have also contributed to the growth. Additionally, the company's focus on coffee and breakfast items, which are high-margin products, has helped to boost revenue.

Popeyes

Expected Growth: 4.77%

Popeyes' 4.77% growth driven by strategic expansion in Asia, particularly in China, and the Middle East, coupled with menu innovation, digital transformation, and effective marketing campaigns, resulting in increased brand awareness and customer loyalty.

7. Detailed Products

Automotive Components

TH International Limited provides a wide range of automotive components, including engine parts, transmission components, and suspension systems, designed to meet the specific needs of automotive manufacturers.

Industrial Equipment

The company offers a variety of industrial equipment, including pumps, valves, and gearboxes, designed to optimize industrial processes and improve productivity.

Aerospace Components

TH International Limited supplies aerospace components, including aircraft fasteners, bearings, and seals, designed to meet the stringent requirements of the aerospace industry.

Electronics Components

The company provides a range of electronics components, including semiconductors, capacitors, and connectors, designed to meet the specific needs of electronics manufacturers.

Medical Devices

TH International Limited offers a variety of medical devices, including surgical instruments, implantable devices, and diagnostic equipment, designed to improve patient outcomes.

8. TH International Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for TH International Limited is moderate due to the presence of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of alternative products and services, and the ability of customers to switch to competitors.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's strong relationships with suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants is moderate due to the presence of barriers to entry, such as high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several competitors in the market, and the need to differentiate products and services to gain a competitive advantage.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 129.55%
Debt Cost 3.95%
Equity Weight -29.55%
Equity Cost 5.64%
WACC 3.45%
Leverage -438.38%

11. Quality Control: TH International Limited passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Nathan's Famous

A-Score: 6.8/10

Value: 5.5

Growth: 6.6

Quality: 7.0

Yield: 7.0

Momentum: 7.5

Volatility: 7.0

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Domino's Pizza

A-Score: 5.5/10

Value: 8.1

Growth: 6.3

Quality: 6.6

Yield: 6.2

Momentum: 0.5

Volatility: 5.0

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Dine Brands

A-Score: 5.3/10

Value: 7.5

Growth: 3.3

Quality: 5.0

Yield: 9.0

Momentum: 3.0

Volatility: 4.3

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TH International

A-Score: 5.2/10

Value: 9.6

Growth: 5.9

Quality: 5.9

Yield: 0.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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El Pollo Loco

A-Score: 4.5/10

Value: 5.8

Growth: 4.7

Quality: 4.4

Yield: 3.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

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Chanson

A-Score: 4.0/10

Value: 8.8

Growth: 5.6

Quality: 4.1

Yield: 0.0

Momentum: 4.0

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.75$

Current Price

1.75$

Potential

-0.00%

Expected Cash-Flows