A Taste of Success

A Taste of Success is a financial communications campaign that we at Strategic Public Relations Group (“SPRG”) devised for our client, Tsui Wah, as it sought to list on the Stock Exchange of Hong Kong Limited. If successful, it would become the first Cha Chaan Teng operator found on the Main Board. Among the obstacles to overcome included the public’s misconception of Tsui Wah as overpriced, as well as the media’s preoccupation with focusing on negative aspects of the F&B industry, including rising rent, food and labour costs. Also, Tsui Wah’s high P/E ratio, doubts surrounding its expansion into China and the generally lackluster performance of IPOs in Hong Kong during the second half of 2012, all served to undermine the confidence of investors.

Planning & Execution

Specific PR tools were used at different stages of Tsui Wah’s listing to achieve set objectives:

Stage 1: Pre-listing – Education and Momentum Building

 Media training was conducted to help the management prepare for the floatation

 Crisis management guidelines were developed for all staff members’ reference

 Restaurant visits were arranged to showcase the company’s high-quality cuisine and service

Stage 2: Global Offering – Arousing Widespread Interest

 Exclusive meetings with stock commentators and columnists were arranged to highlight the company’s investment value

 PR channels were used to disseminate favourable information, including Tsui Wah’s average daily revenue and receipts from Hong Kong and China, thus pique investors’ interest

Stage 3: After Listing – Sustaining Positive Sentiment

 Generated media coverage during and after listing, with particular focus on its outstanding share performance, which reflected confidence from the investment community

 Updated the public and investors about Tsui Wah’s latest developments via interviews and media releases. Also leveraged its solid interim and annual results to encourage further investor support

 Arranged interviews and corporate and public seminars for the Chairman to highlight his success story and stature as the “father of Cha Chaan Teng”. Also raised awareness of Tsui Wah’s prominence – the result of a widening quality gap with its rivals

 To highlight Tsui Wah’s growth potential in China, investor visits were arranged, while the management participated in investor conferences and media interviews focusing on Tsui Wah’s China business

Effectiveness / Results

Tsui Wah successfully listed on SEHK despite a retreating financial market, outperforming its peers

 Despite the sluggish financial market, Tsui Wah was successfully listed and recorded a high P/E ratio of around 30 on its listing day, while the P/E ratio of its peers ranged between 15 and 26. In 2012Q4, seven companies dropped or postponed their listing plans in Hong Kong

 The IPO’s public tranche was approximately 12 times over-subscribed, with the offer price set at the top end

 High liquidity on first trading day – around 165 million shares traded – equivalent to HK$420 million

 Stock price rose 12.8% from HK$2.27 to HK$2.56 on the first trading day, and an intraday high of HK$2.68 was reached despite the Hang Seng Index (“HSI”) dropping by 0.57% on the same day

Sustained PR and IR activities to further consolidate Tsui Wah’s no. 1 position in Hong Kong’s F&B industry, helping raise its investment value and change public perception of Tsui Wah from “high priced” to “high value”

 Through sustained PR and IR activities after listing, Tsui Wah’s stock price climbed by 92.1% from HK$2.27 to HK$4.36 within seven months, while the Hang Seng Index decreased by 5.4%

 Stock price reached HK$5.45 on 31 May 2013, an impressive 140.1% increase over the initial price

 Market capitalisation rose by 82.8% from HK$3,300 million to HK$6,031 million on 28 June 2013, demonstrating a sustained rise throughout the course of the campaign

 As the campaign directed market attention towards its “high value” product, the general public were less sensitive/reactive to Tsui Wah’s menu price adjustments than its peers, since its cuisine is considered on a par with most hotels. Correspondingly, when the media reported the public’s reaction to price adjustments made by Hong Kong catering operators, Tsui Wah received comparatively fewer complaints than its counterparts

 Over 900 media clippings, including TV and radio reports, were generated within eleven months

Tsui Wah’s shares became one of the top picks among its industry peers

 Just 6 months after listing, over 25 research reports were generated by a number of major research houses, including Macquarie, Nomura and Deutschebank

 Over 60 positive stock commentaries were generated that recommended Tsui Wah’s shares, making it one of the top picks among food and beverage stocks

Successfully tapped into the F&B market in China

 The key message that “Tsui Wah is capable of expanding into China via a successful business model” was successfully conveyed. Both media and analysts highlighted this point in their respective news or research reports

 Tsui Wah’s Shanghai restaurants even earned the praise and approval of the Hong Kong media. Three media members visited its Shanghai establishments along with its rivals, subsequently naming Tsui Wah as the most popular Hong Kong-style restaurant in China

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The Campaign Asia-Pacific Team