A Rapidly Expanding Taiwanese Restaurant Chain

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Tofu Restaurant Group

Tofu Restaurant Group is a Taiwanese company that operates and manages Korean restaurant chains. It owns six brands: Dubu House, Hanjinmapu, Tongpan, Beichun Tofu Home, Dubu Dubu, and HanJeongSig's Kitchenette, which mainly offer a variety of Korean cuisines such as tofu and copper plate barbecue. In 2018, it was listed on the emerging stock market. The same year, it received the Golden Merchant Award, a prestigious prize given to outstanding businesses in Taiwan that have significantly contributed to the economy and society. 

Primed to Grow

After reviewing their Investor Relations site, you would be forgiven for thinking that Tofu Restaurants has been acquired or gone bust. Their last presentation, referenced below, comes from an “Investor Conference” over three years ago on August 24th, 2020. Any forward-looking statements are now past tense.

What’s very current, though, are its financials, and that’s where we think we might have found a great opportunity. Revenue has increased in nine of the last ten years (Covid, take a bow for 2021) with a CAGR of 24.45%. Its current return on equity is an incredible 40%, and there’s a ton of room to grow.

In Their Own Words

What Could Go Wrong?

As with any industry, restaurant chains have a common set of risks specific to their domain: market saturation, the changing tastes of consumers, consistent food quality and service across all branches, supply chains, quality ingredients, and so on. The main risk we can see is access to timely and accurate information, which as the above write-up shows, has already presented itself.

Final Word

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