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TH International
(NASDAQ:THCH)
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Rating:42Neutral
Price Target:
$1.00
▼(-23.08% Downside)
Action:Reiterated
Date:10/03/26
THCH scores low primarily due to weak financial performance and balance-sheet stress (negative equity and heavy leverage) alongside ongoing losses and pressured cash generation. Technicals add downside risk with the stock trading below all key moving averages and negative MACD. The earnings call provided a clear turnaround plan and committed financing, but the sharp YoY declines in revenue, traffic, same-store sales, and EBITDA margin keep the overall outlook pressured.
Positive Factors
Loyalty Growth
Rapid loyalty-member growth gives THCH a larger owned customer base for targeted engagement, repeat purchases, and marketing efficiency. If converted into transactions, this CRM asset could help rebuild traffic and support more durable demand beyond individual promotions.
Negative Factors
Balance-Sheet Stress
Debt substantially exceeds the asset base and negative shareholder equity materially limits financial flexibility. This structure increases refinancing and dilution risk, while interest and secured-obligation demands can constrain investment in operations during the turnaround.
Read all positive and negative factors
Positive Factors
Negative Factors
Loyalty Growth
Rapid loyalty-member growth gives THCH a larger owned customer base for targeted engagement, repeat purchases, and marketing efficiency. If converted into transactions, this CRM asset could help rebuild traffic and support more durable demand beyond individual promotions.
Read all positive factors
TH International (THCH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$37.16M
Dividend YieldN/A
Average Volume (3M)7.97K
Price to Earnings (P/E)―
Beta (1Y)0.73
Revenue Growth-8.19%
EPS Growth-47.68%
CountryUS
Employees1,544
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)-15.52
Shares Outstanding32,036,530
10 Day Avg. Volume4,840
30 Day Avg. Volume7,975
Financial Highlights & Ratios
PEG Ratio-0.55
Price to Book (P/B)-0.46
Price to Sales (P/S)0.44
P/FCF Ratio-7.23
Enterprise Value/Market Cap9.06
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit3.62
Enterprise Value/Ebitda-0.95
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-8.16
Revenue Forecast (FY)$1.17B
TH International Business Overview & Revenue Model
Company Description
TH International Limited manages Tim Hortons coffee establishments across mainland China, Hong Kong, and Macau. By September 28, 2022, the company had expanded its network to include roughly 460 coffee shops throughout the People's Republic of Chi...
How the Company Makes Money
TH International makes money primarily by selling food and beverages to customers at Tim Hortons restaurants it operates in China, with revenue recognized from in-store and other on-premise/off-premise transactions (e.g., takeaway and delivery whe...
TH International Earnings Call Summary
Earnings Call Date:Aug 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Negative
The call presents a mixed operational picture: management has achieved notable progress on loyalty growth, product launches, digital penetration, and several cost reductions, and secured committed financing to support a turnaround. However, these positives are outweighed by significant top-line deterioration (revenues down 21.7%, system sales down 15.1%), sharp declines in customer traffic and same-store sales (-17.8%), compressed store contribution margins, and a shift to a negative adjusted corporate EBITDA margin. Management has a clear recovery plan and financing support, but near-term financial trends remain weak.Positive Updates
Loyalty Program Growth
Registered loyalty club members exceeded 37.1 million, a 41.7% year-over-year increase; average loyalty members per store surpassed 36,000, strengthening CRM and future marketing reach.
Negative Updates
Significant Revenue Decline
Total revenues were RMB 273.4 million and system sales RMB 347.8 million in Q2 2026, down 21.7% and 15.1% year-over-year respectively, reflecting weak top-line performance.
Read all updates
Q2-2026 Updates
Positive
Negative
Loyalty Program Growth
Registered loyalty club members exceeded 37.1 million, a 41.7% year-over-year increase; average loyalty members per store surpassed 36,000, strengthening CRM and future marketing reach.
Read all positive updates
Company Guidance
Management guided a near-term plan to deliver sustainable revenue growth and achieve corporate EBITDA breakeven by accelerating product innovation, increasing marketing (starting Q3), improving store unit economics and operational efficiency, and pursuing a more balanced company-owned vs. franchised store rollout focused on top-tier cities and high-traffic trade zones. Key metrics cited on the call include Q2 revenues of RMB 273.4 million and system sales of RMB 347.8 million (declines of 21.7% and 15.1% YoY), a 17.8% same-store-sales decline (driven by a 16.3% comparable transaction decline and a 1.5% average ticket decline), monthly average transacting customers of 2.85 million (down from 3.59 million), net new stores of +2 in Q2 (15 made-to-order openings and 13 non-MTO closures) with company-owned stores down from 566 to 544, digital orders at 91.8% of total (from 90.4%), 27 new product launches (20 beverages, 7 foods), registered loyalty members >37.1 million (+41.7% YoY; >36,000 members/store), food & packaging cost reduced from 30.1% to 28.3% of company-store revenue (-1.8 ppt), rental costs RMB 47.9 million (-15.6%) though rental % rose 1.5 ppt to 21.7%, payroll RMB 43.9 million (-12.6%) but payroll % rose to 19.9%, delivery costs RMB 28.9 million (-13.3%) on 7.2 million delivery orders (-11.9%) with delivery cost % at 13.1%, company-store contribution margin 5.7% (vs. 9.6% prior), marketing RMB 13.3 million (-4.4%) but 4.9% of revenues, adjusted G&A RMB 39.6 million (+14.4%) at 14.5% of revenues, adjusted corporate EBITDA margin -7.6% (vs. +0.6% prior), cash and restricted cash RMB 121.1 million (vs. RMB 129.7 million Dec 31), and an initial tranche of USD 15.8 million closed toward a proposed USD 55 million financing to fund innovation, marketing and disciplined store expansion.TH International Financial Statement Overview
Summary
Income Statement
18
Very Negative
Balance Sheet
10
Very Negative
Cash Flow
22
Negative
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.19B | 1.28B | 1.39B | 1.56B | 1.01B | 643.37M |
| Gross Profit | 93.03M | 77.62M | 213.56M | 156.34M | 33.05M | 13.81M |
| EBITDA | -354.93M | -302.25M | -266.19M | -656.06M | -596.54M | -306.75M |
| Net Income | -504.29M | -422.65M | -412.08M | -876.25M | -742.65M | -381.72M |
Balance Sheet | ||||||
| Total Assets | 1.03B | 1.18B | 1.56B | 2.22B | 2.64B | 1.28B |
| Cash, Cash Equivalents and Short-Term Investments | 121.10M | 134.67M | 161.37M | 225.72M | 614.92M | 395.00M |
| Total Debt | 1.98B | 1.97B | 1.88B | 1.81B | 1.77B | 522.42M |
| Total Liabilities | 2.44B | 2.41B | 2.40B | 2.64B | 2.53B | 945.80M |
| Stockholders Equity | -1.41B | -1.24B | -840.89M | -427.21M | 108.85M | 335.54M |
Cash Flow | ||||||
| Free Cash Flow | -66.51M | -78.33M | -142.51M | -488.53M | -621.86M | -580.28M |
| Operating Cash Flow | -888.84K | -12.71M | -39.67M | -196.13M | -286.93M | -244.97M |
| Investing Cash Flow | -30.10M | -62.83M | -8.04M | 60.00M | -705.17M | -335.28M |
| Financing Cash Flow | -23.78M | 21.70M | 26.00M | 80.83M | 827.16M | 798.00M |
TH International Technical Analysis
Negative
1.30
Price Trends
1.44
Negative
1.62
Negative
1.86
Negative
Market Momentum
-0.05
Positive
38.37
Neutral
39.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THCH, the sentiment is Negative. The current price of 1.3 is below the 20-day moving average (MA) of 1.32, below the 50-day MA of 1.44, and below the 200-day MA of 1.86, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 38.37 is Neutral, neither overbought nor oversold. The STOCH value of 39.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for THCH.
TH International Risk Analysis
TH International disclosed 88 risk factors in its most recent earnings report. TH International reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TH International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $32.83M | 11.41 | 17.95% | ― | 7.23% | 8.40% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
51 Neutral | $150.28M | -4.70 | 29.24% | ― | -3.71% | 50.04% | |
47 Neutral | $49.43M | -0.41 | -69.17% | ― | -4.06% | -154.36% | |
43 Neutral | $53.07M | -1.94 | -31.91% | 0.70% | -2.94% | -462.05% | |
42 Neutral | $37.16M | -0.50 | 40.16% | ― | -8.19% | -47.68% |
* Consumer Cyclical Sector Average
THCH
TH International
1.16
-1.47
-55.89%
RAVE
Rave Restaurant Group
2.31
-0.72
-23.76%
RRGB
Red Robin Gourmet
7.95
1.11
16.23%
STKS
The ONE Group Hospitality
1.56
-0.96
-38.10%
GENK
GEN Restaurant Group, Inc. Class A
1.61
-1.46
-47.56%
TH International Corporate Events
Tims China Closes Second Tranche of Convertible Notes Financing
Sep 10, 2026
On September 10, 2026, Tims China closed the issuance of a second tranche of senior secured convertible notes due 2029 to Tim Hortons Restaurants International GmbH, with an aggregate principal of about US$14.54 million and total proceeds, includi...
Tims China Posts Weaker Q2 2026 Results Amid Store Closures, Secures New Financing
Aug 18, 2026
Tims China’s second-quarter 2026 unaudited results revealed total revenue of RMB273.4 million, down 21.7% year-on-year, and system sales falling 15.1%, as the company closed underperforming outlets and saw a 17.3% drop in same-store sales at...
Tims China Raises US$15.8 Million in First Tranche of 2029 Convertible Notes
Jul 7, 2026
On July 7, 2026, Tims China closed the issuance of a first tranche of senior secured convertible notes due 2029 to Tim Hortons Restaurants International GmbH, with an aggregate principal of about US$15.6 million and total proceeds of US$15.8 milli...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.