CONGLOMERATE Texchem Resources Bhd is confident that Sushi King Sdn Bhd and Sushi King (East Malaysia) Sdn Bhd, which is currently Malaysia’s largest halal Japanese restaurant chain, will spur its restaurant division to profitability again following the country’s economic recovery and opening of international borders.
During the pre-pandemic days, Penang-based Texchem used to run nearly 150 Sushi King outlets but slashed the number down to 121 nationwide as of end-March as part of its rationalisation initiatives to improve Sushi King group’s operation and cash management.
These included the closure of its operations in Indonesia and certain non-performing outlets in Malaysia.
Pre-tax loss for Texchem’s restaurant division, which includes its other food & beverage (F&B) businesses has narrowed to RM1.3 mil for its financial year ended Dec 31, 2021 (FY2021) from RM1 mil a year ago.
“Today, the Sushi King group’s operations is leaner with a healthier cost structure and higher operational efficiency,” commented Texchem’s executive chairman Tan Sri (Dr) Fumihiko Konishi.
“This will translate to a positive impact on our financial performance as demand for dine-in at our existing restaurant outlets have rebounded after the easing of movement control order (MCO) restrictions.”
On the corporate front, Texchem has completed the acquisition of an additional 28% equity interest in Sushi King group for RM102.2 mil cash which increased its stake to 98.35% from 70.35%.
This has enabled Texcham to have control over the strategic direction of the Sushi King group’s business moving forward.
“The strategy is to focus on opening additional outlets that feature different concepts such as Sushi King kiosk and Sushi King satellite outlets that serve takeaway sushi,” Konishi pointed out.
“The benefits of these new concept outlets are that they require much lower capital expenditure and shorter time to launch.”
Thus far, the first Sushi King kiosk opened at a petrol station in Subang Jaya has been well-accepted, prompting efforts to replicate this model by identifying locations at other petrol stations, hospitals and supermarkets to open new Sushi King kiosk and satellite outlets.
“As these outlets will be strategically located at new locations with high footfall, we are able to target a larger customer base while leveraging on Sushi King group’s existing kitchen facilities in the nearby restaurants,” envisages Konishi. “This will drive incremental revenue without having to incur high investment costs.”
At the close of today’s mid-day trading, Texchem was up 3 sen or 1.23% to RM2.46 with 537,200 shares traded, thus valuing the company at RM305 mil. – April 20, 2022
