ZEN Corporation Group Plc. to sell 75 million IPO shares after SEC approved Filing Count 1 Highlights food service business Raises fund for branch expansion and restaurant improvements

Wednesday 23 January 2019 15:20
'ZEN Corporation Group Plc.' or ZEN is preparing to make its Initial Public Offering (IPO) of 75 million shares after the Securities and Exchange Commission (SEC) approved its Filing Count 1. The group is highlighting its food service business which includes restaurants and related businesses; such as food delivery, catering, restaurant management and retail food; in an effort to raise funds to expand restaurant branches, improve existing restaurants and increase work efficiency. Its aim is to increase sales through the continuous expansion of branches both domestically and internationally.

Mr Pongsak Phrukpaisal, Managing Director of Kasikorn Securities Pcl., in his capacity as financial adviser, said that ZEN Corporation Group Plc. has submitted its filing to the SEC for its Initial Public Offering and the commission has already approved its Filing Count 1.

At present the ZEN Corporation Group Plc. has a registered capital of 300 million baht divided into 300 common shares at a par value of one baht per share. The registered capital is composed of 225 million baht in paid-up capital and the group will offer to sell 75 million IPO shares, or no more than 25% of all issued and paid-up common shares of the company after this IPO. The fund raised will be used to (1) expand the business of the group, including expansion and improvement of restaurant branches, (2) repay loans from commercial banks, and (3) use as working capital in the business.

When the SEC approves the filing, the date for the IPO will be set and it is expected that the ZEN Corporation Group Plc. will be listed in the Stock Exchange of Thailand in the first quarter of this year.

Mr Boonyong Tansakul, Chief Executive Officer of ZEN, said the group's outstanding quality is that it is a complete food service provider. It does not only have restaurant and franchise businesses but also other related businesses, such as food delivery and retail food, that can respond to the demands of consumers at all levels and gain access to their diverse lifestyles in a comprehensive manner.

In the past two years, the group has invested in the management system within the organisation, including increasing personnel and investing in information systems to support business expansion both domestically and internationally. This has led to increased administrative expenses but the result is that at present the group stands ready to expand business and can use the support base that it had prepared beforehand to fully support growth.

The ZEN CEO said the group is also a holding company and has shares in other companies in the restaurant and other related businesses. Currently it can divide its businesses into three categories (1) restaurant business (2) franchise, and (3) other related businesses such as food delivery, catering, restaurant management, restaurant consultancy and retail food business. The retail food business is composed of ready-to-cook and ready-to-eat food which takes popular products from the restaurants and sell it to general consumers.

At present the group has a total of 12 restaurant brands – six Japanese and six Thai. The Japanese brand restaurants include: (1) ZEN, serving authentic Japanese food, (2) Masha by ZEN, new trend Japanese restaurants, (3) Sushi Cyu Carnival Yakiniku, premium Japanese restaurants, (4) AKA, Japanese style grill restaurants (Yakiniku), (5) Testu, premium Japanese style grill restaurants, and (6) On the Table Tokyo Cafe, lifestyle restaurants.

The Thai brand restaurants include: (1) Tummour, Thai-Esan restaurants, (2) Laoyuan, Thai-Esan and Vietnamese restaurants, (3) Jaew Hon, Lao style Suki restaurants, (4) Pho, Vietnamese style noodle soup restaurants, (5) de Tummour, premium Thai-Esan restaurants, and (6) Khiang by Tummour, Thai street food style restaurants. The last is a new brand that offers one plate Thai dishes popular with general consumers such as stir fried pork with basil. Khiang has opened its first branch at a PTT petrol station in Jesada Bodin, Nonthaburi.

As of 31 December 2018, the group has 255 restaurant branches under its brands, both in Thailand and abroad. Of these, 167 branches are Thai restaurants and 88 branches are Japanese restaurants. The group owns and operates 110 of these branches and the other 145 operate under franchises.

"The group aims to be the leader in the food service business in the country and has the vision for the organization to become the most popular and trusted brands among consumers as well as with business partners and other concerned parties. In 2019, it plans to expand 36 of its own branches and 87 franchise branches, and in 2020 it plans to expand another 50 of its own branches and another 175 franchise branches," Mr Boonyong said.

Ms Yupaphan Ekasittikul, Chief Financial Officer of ZEN, said the overview of the operating results for the first nine months of 2018 (January to September 2018) saw total revenues of 2.226 billion baht, an increase of 21.9% from the same period of the previous year that saw 1.826 billion baht in total revenues. The group earned a net profit of 108.7 million baht or an increase of 120.9% over the same period of the previous year that saw net profits of 49.2 million baht. The main factor for this increase was the growth of the restaurant and franchise businesses.