• Resilient and scalable business model. A diversified portfolio with (a) strong track record over 25 years, (b) a wide range of offerings with multi-price point strategy, and (c) is operated by a team of experienced management.
• Expansion into the fast-growing and higher margin Quick-Service Restaurants segment and ready-to-eat meals; While potential margin gains from its central kitchen should drive bottom-line
• With improving margins, positive operating cash flows, a high return on equity (FY17 ROE at 18.3%, post-invitation), RE&S Holdings Limited trades at a post-IPO historical P/E of 13.7x, 13.8% discount to the industry average of 15.9x.

Investment Summary

The Group is a concept owner and operator of F&B Outlets in Singapore and Malaysia that provides customers with authentic Japanese cuisine and dining experiences, via (a) 39 Full-Service Restaurants, and (b) 38 Quick-Service Restaurants, Food Kiosks, Japanese Bakery and Food Retail Outlets. The Group also supply Japanese food products which it manufactures to third-party businesses in Singapore.

Financial Highlights

Dividend Policy

No fixed dividend policy, but intends to distribute dividends of at least 35.0% of PATMI in each of FY2018 and FY2019.

Peer Comparison

Source: Bloomberg, IPO Prospectus

COMPANY OVERVIEW

Established in 1988, RE&S Holdings Limited (RE&S) is a concept owner and operator of 77 F&B Outlets in Singapore and Malaysia that provides customers with authentic Japanese cuisine and dining experiences.

The company has a diversified portfolio of 20 unique and distinct brands under its two key business segments: (a) Full-Service Restaurants; and (b) Quick-Service Restaurants, Convenience and Others.

The Group also has a central kitchen (aggregate floor area of approximately 41,570 sqft) to:

• Support the operations of its F&B Outlets across Singapore by preparing various finished and semi-finished food items that are used in its food offerings; and
• Produce a variety of Japanese food items to supply to third-party businesses in Singapore.

It has a procurement office in Japan, RE&S Japan, which also exports seafood products to various countries in the Asian region, such as the Macau Special Administrative Region.

BUSINESS SEGMENTS

1. Full-Service Restaurants Segment (74.4% of FY2017 Revenue)

• Caters to customers seeking the full dining experience where they may sit down to have their meals and are provided with table service.
• Operates on premises which have a gross floor area of between approximately 1,600 sqft and 6,500 sqft.
• Comprises a total of 34 Full-Service Restaurants in Singapore; and 5 Full-Service Restaurants in Malaysia.

2. Quick-Service Restaurants, Convenience and Others segment (25.6% of FY2017 Revenue)

• Caters to customers seeking a quicker meal experience and/or in which they may order their meals for take-away. Also supply Japanese food products which it manufactures, such as bento and onigiri (Japanese rice balls), to third-party businesses in Singapore.
• Operate on premises which have a gross floor area of between 200 sqft and 1,500 sqft (excluding the Food Retail Outlets which are operated under consignment arrangements).
• A total of 38 Quick-Service Restaurants, Food Kiosks, Japanese Bakery and Food Retail Outlets in Singapore.
  1. 9 Quick-Service Restaurants which cater primarily to customers who seek a quicker sit-down meal experience;
  2. 16 Food Kiosks which cater primarily to customers seeking to order their meals for take-away;
  3. a Japanese Bakery operating under Gokoku Japanese Bakery brand; and
  4. 12 Food Retail Outlets comprising: (i) 8 Food Retail Outlets which are operated under Kuriya Japanese Market brand, offering customers a wide selection of Japanese food items; and (ii) 4 Food Retail Outlets which are operated in Singapore within the premises of four supermarkets belonging to the same chain under consignment arrangements, offering, among other things, freshly prepared food items such as sashimi and sushi platters and take-away bentos.

Figure 2: Overview of F&B Brands and Outlets

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