Corporate Overview

Cafe' de Coral Group (0341) is the largest publicly listed Chinese fast food restaurant group in the world. The Group is principally engaged in the operation of quick service and specialty restaurants chain, with vertical and horizontal diversification in institutional catering and food processing business.

The Group was incorporated in October 1968 and went public in July 1986 on the Stock Exchange of Hong Kong, which was the first of its kind at the time of listing. In October 2001, it was appointed as one of the top 200 constituents of The Hang Seng Composite Index Series. After 42 years of development, it has become the market leader in the Hong Kong fast food industry and the largest national brand for Chinese quick service restaurant in Canada, with over 24.8% market share in the Quick Service Restaurant segment and 4.6% of the total dining out industry in Hong Kong. Its business operation spans over 2 continents with more than 300 operating units in Hong Kong, over 100 outlets in China as well as more than 140 units in North America.

Over the past years since its public listing in 1986, the Group advanced in strides in profit performance and in its business dimensions. The Group has successfully transformed from a small home grown enterprise into a diversified global corporation. The continuous business growth records over the years speak for itself, recording multiple growths in terms of market capitalization, turnover, profits, employees and net assets value. Our market cap increased by over 20 times, turnover by over 19 times, profit by over 14 times and net assets by over 51 times since listing. With a dedicated workforce of 16,000, we are awarded the Best Employer in Asia.

Over the past years, Cafe' de Coral has received numerous awards for its management excellence from the local and international institutions, which include the most coveted award of the “Asian Management Awards for Marketing and General Management”. Five times in a row, we have been selected as “World’s 200 Best Small Capitalization Companies” by Forbes Global and three times in a row chosen as “Best Practice Companies” by Hong Kong Productivity Council. In addition, we have been selected as “Leader in Corporate Governance”, and also been awarded the “IT Excellence Awards” and “IR Magazine Asia Awards”. More recently, our group has been honored five years in the row the “PRC Consumer’s Most Favorable Hong Kong Brand-Gold Award”.

On a personal basis, our Group’s Chairman, Mr. Michael Y.K. Chan was awarded with the most coveted “Stars of Asia Award” in 1999, the prestigious “Executive of the Year Award 2001”, the “2002 Bauhinia Cup Outstanding Entrepreneur Awards”, the “Directors of the Year Awards”, as well as the “Entrepreneur of the Year China” by Earnest & Young in 2007.

Quick Service Restaurant
Locally here in its Hong Kong headquarter, Cafe' de Coral is the market leader of the fast food sector, catering to over 300,000 customers per day. While we emphasize offering quality products to our customers at affordable prices, we are also innovative in our introduction of new products, with over 100 items on our menu list on any one day, and regularly rotated to maintain variety of choices.

Apart from core brand Cafe' de Coral, the Group is actively developing other brands to boost long-term sales and earnings growth in the Hong Kong Chinese QSR market, with Super Super Congee & Noodles being another strategic brand to tap into the mass market.

Fast Casual Restaurants
We are one of the pioneers to tap into the big emerging market of fast casual dining for healthy and nutritional lifestyle, and have established different brands to meet this rapidly expanding market of health-conscious customers. Acquired in 2003, Oliver’s Super Sandwiches’ highly recognized “made-to-order” sandwiches and salads, together with an assorted selection of hot food, are well received among our customers. To penetrate into the high-end coffee market in Hong Kong, the Group established a joint venture in November 2007 to operate an exclusive franchise under the brand of “Espressamente illy”. Newly added to our portfolio is Mix, the first and largest healthy concept restaurant chain in Hong Kong, with innovative juice offerings and smoothies, together with a wide array of highly recognized and nutritionally balanced wrapps, salad, and gourmet sandwiches.

Specialty Restaurant Business
Being well aware that the catering sector in Hong Kong representing a market of 80 billion Hong Kong dollar businesses, the Group has gone beyond its core business of quick service restaurants and diversified into full-service specialty restaurant operations, making efforts to capture bigger market shares in other segments of catering industry as a whole. The development of The Spaghetti House since 1991 and the recent development of 360 series enable the Group to achieve a more diverse earning base through wider market exposure, as well as assuming a leadership position in the pasta segment. Our strategies are to enlarge our market share in the Hong Kong catering industry as a whole and to establish a balanced business portfolio to explore the greater potentials of the vast catering market in Greater China.

In September 1999, the student catering business was launched under the brand name of Luncheon Star. It has since then become one of the major school lunch providers in the marketplace. To provide children with a healthy growing environment for a brighter future, Luncheon Star consistently emphasizes food safety, healthy diet and environmental protection. We select high quality food materials by way of global purchase. We utilize advanced cook-chill technology to maintain the highest food safety standards. We have experienced dietitians to fulfill the nutritional needs of children. We are also the first school lunch providers to adopt comprehensive environmental protection measures in disposables and recycling.

We are also one of the pioneer caterers in being accredited simultaneously with “HACCP”, “ISO 9001” and the strictest “ISO 22000” food safety and monitoring system, which are the first of its kind in the Hong Kong catering industry. These accreditations are testimonial of our commitment in food safety and corporate responsibility to the local community.

With international accreditations in the areas of food safety, nutrition and environmental protection, we plan to further upgrade the central kitchen’s infrastructure, and the reheating centers for institutional catering, thereby ensuring the consistency of the high quality food to serve our customers.

Food Processing
Recognizing that central food processing facility will be one of the critical success factors to the catering sector, the management of the Group has long established our first central food processing facility in Hong Kong since 1980s, so as to standardize and maintain quality control over the increasing volume and range of produce and ingredients processed. It also enabled the Group to minimize its reliance on manual labor by way of mechanization and automation on much of its food processing.

Most of the food sold in the Group’s restaurants is portioned and processed at the central food processing facility. All produce, ingredients and packaging materials delivered to the central food processing facility will undergo quality checks before further processing or delivery to the individual restaurants and a high standard of hygiene is maintained throughout.

PRC Platform

Quick Service Restaurant
After years of development, we are proud that our Cafe' de Coral has already covered the major Pearl River Delta cities, in particular Shenzhen and Guangzhou. With a sizable business platform and a highly recognized brand, we plan to accelerate the store opening process by building a central food processing plant in Guangzhou, which launched production in 2011 and have the production capacity to support the demand of over 300 stores in the region. The multi-purpose training facilities adjoining the plant will also be established in order to provide all-round training to our front-end staff, in preparation to tap into the vast potential in this strategic market.

Specialty Restaurant
The Specialty Restaurant sector is another important market in the Mainland China. Following the success of The Spaghetti House in Hong Kong, we accelerated our development of the brand in the top-tier cities in the Pearl River Delta Regions, including Shenzhen, Guangzhou, Foshan and Zhuhai.

Institutional Catering
In Mainland China, we strengthen our efforts to pursue business opportunities with intuitional clients in science parks, modern office complexes, and in the education sector. Recently, we reached a management agreement with United International College in Zhuhai to manage and operate a student and staff canteen with a total floor area of 2,740 square meters.

North America Platform

With more than 140 units, Manchu Wok is the largest national brand of Chinese quick service restaurant chain in Canada and the second largest in U.S.A. The chain was first established in 1982 in Canada, which was targeted to fill the growing demand for a systematic and professional Chinese fast food restaurant concept in North America at the time. Since 2007, our management team has taken various measures to revitalize the Manchu Wok brand. In particular, we introduced innovative store design and combined it with improved operational protocol to refresh our brand image. We help the franchisees to build their stores on time, on specification and on budget.

To date, Manchu Wok in U.S. accounts for almost half of total outlets in North America, and our franchises have grown to more than 120 outlets. Our non-traditional outlets also account for one third of the total portfolio. In the future, we will continue to expand in North America, further concentrate our efforts in the Canadian market, and increase the percentage of franchise stores in our total portfolio. We will also commit more resources to grow both our traditional and non-traditional portfolios, in the arena of airports, casinos, and military bases. Our globalization vision in the years ahead will continue to be pursued in a disciplined pace through further organic growth and franchising.