TSEC:2723

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Gourmet Master Co. Ltd., an investment holding company, operates and franchises a chain of cafes in China, Taiwan, the United States, and internationally. More Details

Rewards

Trading at 41.2% below our estimate of its fair value

Earnings are forecast to grow 22.39% per year

Risk Analysis

No risks detected for 2723 from our risk checks.


Snowflake Analysis

Flawless balance sheet and fair value.


Similar Companies

Share Price & News

How has Gourmet Master's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2723 is not significantly more volatile than the rest of TW stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: 2723's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

1.0%

2723

-0.2%

TW Hospitality

-0.7%

TW Market


1 Year Return

69.2%

2723

19.7%

TW Hospitality

39.3%

TW Market

Return vs Industry: 2723 exceeded the TW Hospitality industry which returned 19.7% over the past year.

Return vs Market: 2723 exceeded the TW Market which returned 39.3% over the past year.


Shareholder returns

2723IndustryMarket
7 Day1.0%-0.2%-0.7%
30 Day19.1%11.6%1.0%
90 Day8.0%3.7%10.8%
1 Year74.2%69.2%23.3%19.7%44.2%39.3%
3 Year-53.1%-56.5%-5.9%-14.6%61.9%43.7%
5 Year-0.2%-9.6%6.4%-8.8%116.6%78.5%

Long-Term Price Volatility Vs. Market

How volatile is Gourmet Master's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Gourmet Master undervalued compared to its fair value and its price relative to the market?

41.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2723 (NT$156) is trading below our estimate of fair value (NT$265.17)

Significantly Below Fair Value: 2723 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2723 is good value based on its PE Ratio (33.9x) compared to the TW Hospitality industry average (34.5x).

PE vs Market: 2723 is poor value based on its PE Ratio (33.9x) compared to the TW market (19.3x).


Price to Earnings Growth Ratio

PEG Ratio: 2723 is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: 2723 is overvalued based on its PB Ratio (2.7x) compared to the TW Hospitality industry average (2.5x).


Next Steps

Future Growth

How is Gourmet Master forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

22.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2723's forecast earnings growth (22.4% per year) is above the savings rate (0.8%).

Earnings vs Market: 2723's earnings (22.4% per year) are forecast to grow faster than the TW market (18.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 2723's revenue (6.9% per year) is forecast to grow slower than the TW market (10.9% per year).

High Growth Revenue: 2723's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2723's Return on Equity is forecast to be low in 3 years time (11.3%).


Next Steps

Past Performance

How has Gourmet Master performed over the past 5 years?

-8.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2723 has high quality earnings.

Growing Profit Margin: 2723's current net profit margins (4.1%) are lower than last year (4.6%).


Past Earnings Growth Analysis

Earnings Trend: 2723's earnings have declined by 8.2% per year over the past 5 years.

Accelerating Growth: 2723's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2723 had negative earnings growth (-21.9%) over the past year, making it difficult to compare to the Hospitality industry average (-28.3%).


Return on Equity

High ROE: 2723's Return on Equity (8.1%) is considered low.


Next Steps

Financial Health

How is Gourmet Master's financial position?


Financial Position Analysis

Short Term Liabilities: 2723's short term assets (NT$7.7B) exceed its short term liabilities (NT$7.4B).

Long Term Liabilities: 2723's short term assets (NT$7.7B) exceed its long term liabilities (NT$4.7B).


Debt to Equity History and Analysis

Debt Level: 2723's debt to equity ratio (11.2%) is considered satisfactory.

Reducing Debt: 2723's debt to equity ratio has reduced from 14.2% to 11.2% over the past 5 years.

Debt Coverage: 2723's debt is well covered by operating cash flow (328.1%).

Interest Coverage: 2723's interest payments on its debt are well covered by EBIT (16.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Gourmet Master current dividend yield, its reliability and sustainability?

1.92%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2723's dividend (1.92%) isn’t notable compared to the bottom 25% of dividend payers in the TW market (2.01%).

High Dividend: 2723's dividend (1.92%) is low compared to the top 25% of dividend payers in the TW market (4.99%).


Stability and Growth of Payments

Stable Dividend: 2723's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2723's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (65.1%), 2723's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2723's dividends in 3 years are forecast to be covered by earnings (54.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average board tenure


CEO

Cheng Hsueh Wu

5.92yrs

Tenure

Mr. Cheng Hsueh Wu serves as the President of Comestibles Master Co., Ltd. Mr. Wu serves as Chairman of Gourmet Master Company Ltd. and Chief Executive Officer since April 1, 2015 and also has been a Direc...


Board Members

NamePositionTenureCompensationOwnership
Cheng Hsueh Wu
Chairman & CEO5.92yrsno data16.43%
NT$ 4.6b
Zhang Ji Wen
Director11.17yrsno datano data
Ding Zhong Li
Director4.75yrsno datano data
Ming Te Yu
Independent Director4.75yrsno datano data
Lee Su Ying
Independent Director4.75yrsno datano data
Ming Hua Kuo
Director3yrsno data0.000030%
NT$ 8.4k
Zhiyi Ji
Independent Director1.75yrsno datano data
Ji-Wen Zhang
Directorno datano datano data

4.8yrs

Average Tenure

Experienced Board: 2723's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Gourmet Master Co. Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Gourmet Master Co. Ltd.
  • Ticker: 2723
  • Exchange: TSEC
  • Founded: 2005
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: NT$28.080b
  • Shares outstanding: 180.00m
  • Website: https://www.85cafe.com

Location

  • Gourmet Master Co. Ltd.
  • 408, No. 35, 23rd., Industrial Park
  • Taichung
  • 408
  • Taiwan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2723TSEC (Taiwan Stock Exchange)YesCommon StockTWTWDNov 2010

Biography

Gourmet Master Co. Ltd., an investment holding company, operates and franchises a chain of cafes in China, Taiwan, the United States, and internationally. The company operates its cafes under the 85°C name...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/07 08:35
End of Day Share Price2021/03/05 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.