Introduction

Café de Coral Group (0341) is the largest publicly listed Chinese Fast Food restaurant group in the world with over 330 outlets in Asia Pacific region, and over 200 quick service restaurants in North America. Among a total of over 540 outlets, over 120 outlets and 75 outlets are operated under the household name of Café de Coral and New Asia Dabao, whereas over 200 outlets are operating under the leading brand of Manchu Wok and 20 outlets operating under the name of Oliver's Super Sandwiches. Specialty restaurants include Spaghetti House, Bravo le Café, Super Super Congee and Noodles, Bistro M and Ah Yee Leng Tong, as well as the well-established institutional catering business under the tradename of Asia Pacific Catering.

The Group went public in July 1986 on The Stock Exchange of Hong Kong, which was the first of its kind at the time of the listing. As the market leader in the Hong Kong fast food industry and the largest National Brand for Chinese quick service restaurant in Canada, the annual turnover of the Group now stands at well over HK$2.7 billion, generating an annual profit of over HK$258 million in Year 2004.

Quick Service Restaurant Business

The principle business of the Group is the development and management of quick service restaurants chain. Locally here in its Hong Kong headquarter, Café de Coral is the market leader of the fast food sector for over three decades. The home-grown development of Bravo le Café quick service restaurant and Super Super Congee and Noodles restaurant concepts in 1997 and 1999 respectively, as well as the acquisition of Oliver's Super Sandwiches in 2003, further strengthen the Group's dominant market presence in the fast food industry in Hong Kong. After strategic acquisition of Machu Wok in North America and New Asia Dabao in Shanghai, the Group's quick service restaurant business has now been globalized to cover different part of the world including Canada, U.S.A., Philippines and China.

Specialty Restaurant Business

The Group has also diversified into full-service specialty restaurant operations. Acquisition of a Chinese soup-cum-specialty-dish restaurant chain, Ah Yee Leng Tong, in 1990 and a mid range Italian restaurant chain, The Spaghetti House, in 1991, enable the Group to achieve a more diverse earning base through the wider market exposure. New concept development of Bistro M in Hong Kong, Dai Bai Dang and Fan Ting in California are recent members added to the Group's family of specialty restaurants.

Institutional Catering Business

The Group's venture into the institutional catering business with Asia Pacific Catering since the early 90's has gradually developed into an undisputed market leader in the field. Major clients being served cover a wide spectrum of institutions ranging from most major hospitals, universities, private and public corporations, both in Hong Kong and China. Since September 1999, the student catering business was launched under the brand name of Luncheon Star, which has deployed the cook-chill central production technology to tap into this growing business. As of today, the Group's institutional catering business has been internationally recognized with both the ISO9001 and HACCP accreditation.

Food Manufacturing and Distribution Business

As one of the Group's most important operational logistics, the Group possesses a food processing plant in Guangzhou, China as well as a 120,000 sq.ft. central food processing facility housed under one roof within the Group's 12 stories self-owned headquarters in Hong Kong. These facilities encompass various fully mechanized and automated food processing lines, quality control laboratory, cold and dry storages, and distribution fleet. Coupled with its central purchasing power, centralized food processing also comprises bulk breaking, standardized seasoning and standardized portioning at pre-set specifications, volume requirements and quality standards. The acquisition of Scanfoods in 1997 and the acquisition of Denny's Bakery in year 2000 led the Group towards further upstream integration into the food manufacturing and distribution business in the Greater China region. As one of the leading processed meat suppliers in Hong Kong, Scanfoods owns a 40,000 sq.ft production base in Dongguan city, which processes and distributes ham, sausages and bacon products to over 1,000 institutional customers in Hong Kong and China.

Awards

For the past 36 years, Café de Coral has received numerous awards for its management excellence from the local and international institutions, which included the most coveted award of the "Asian Management Award for Marketing Management" and the "Asian Management Award for General Management" by Asian Institute of Management in 1992 & 1993, named "Asia's Best" in 1997, "Top Ten Best" by AsiaMoney in 1998. In addition, we have been awarded the "Good People Management Award" by Labour Department of HKSAR Government. Five times in a row, we have been selected as "World's 200 Best Small Capitalization Companies" by Forbes Global and four times in a row, selected as "The International Chinese Enterprises 500" by The International Chinese Newsweekly. We have also been chosen as "Powerhouse Hall of Fame - Best Practice Companies" by Hong Kong Productivity Council consecutively in 1999, 2000 and 2001. More recently, we have won the "2002 Business Excellence Award" presented by The Canadian Chamber of Commerce in Hong Kong. In 2003, we have most recently been selected as "The Best Employers in Hong Kong Award" and "IR Magazine Asia Awards" in 2003. We have also been awarded the "Leader in Corporate Governance", "IT Excellence Awards", "Enlightened Employers Award" and "Overall Regional Best Managed Medium Cap Company" in 2004. On a personal basis, our Group's Chairman, Mr. Michael Y.K. Chan was personally awarded with the most coveted "Stars of Asia Award" in 1999, the winner of the prestigious "Executive of the Year Award 2001" by the Hong Kong business community in the DHL/SCMP Hong Kong Business Awards and the "2002 Bauhinia Cup Outstanding Entrepreneur Awards" by The Hong Kong Polytechnic University and "Directors of the Year Awards" by Hong Kong Institute of Directors. Recently, Mr. Chan has further been bestowed with the most prestigious "Hong Kong Business Mastermind Award".