This New ListCo Stays Hungry: Fresh Brands, Anime Cafés, and Regional Ambitions

THE CONTEXT • Listed on the Singapore Exchange in Oct 2024, Food Innovators Holdings has nine collaboration restaurants in Singapore, including Yatagarasu (72 Circular Road), Mikoto (60, Robertson Quay, #01-12) , and The Ushi Club (64 Circular Road). Mikoto offers an izakaya experience reminiscent of Tokyo’s Yakitori Alley, with a cozy, intimate setting ideal for casual gatherings and after-work drinks. • FIH aims to capitalize on the growing popularity of Japanese cuisine and anime culture in Singapore. This will put it on a stronger footing in the listed company space, where it's still a relatively small company with a market cap of ~S$20 million. • In FY2025 (ended Feb), the Group recorded an adjusted loss before tax of S$1.0 million, excluding IPO-related professional fees.   • Read more about the company below in an article originally published on the SGX website ...

10 Questions for Food Innovators Holdings

At the Ushi Club in 64, Circular Road, Singapore.

2. What are some competitive advantages that distinguishes FIH from other players in the industry?

• One-stop solution for restaurant management and consulting: The Group’s complementary businesses coupled with additional ancillary services help it reap synergistic benefits and drive sustainable growth.
  
  
• Strong working relationships with tenants: Close working relationships help the Group pinpoint strategic locations, resulting in high occupancies of over 99% consistently.
  
  
• Ability to expand Japanese brands to overseas market: Expertise in identifying promising candidates has enabled the Group to successfully expand Japanese brands overseas.
  
  
• Provision of comprehensive end-to-end consulting services: Full suite of consulting services ranging from leasing spaces to restaurant operation services for new ventures by leveraging on the Group’s extensive network of contacts.
  
  
• Optimal site and location selection for restaurants and subleased properties: Optimal locations enhance the presence and utilisation of restaurants, and attractiveness of our subleased properties.
  
  
• Innovation of fresh dining experience and interesting food concepts: Strong in-house product development team to monitor market trends and customer preferences closely.
  
  
• Experienced and dedicated management team with an established track record: Experienced team with more than 10 years of F&B industry experience.
  
  

CEO of FIH "Notably, we have partnered with a prospective franchisee in Australia and are in the process of establishing a local subsidiary, laying the groundwork for future restaurant openings and positioning the Group for long-term value creation in the region." -- Foood Innovators Holdings

3. Apart from Singapore and Malaysia, is the Group considering expansion to other markets?

• As part of our regional growth strategy, the Group aims to deepen its foothold in Asia Pacific and we are exploring opportunities in high growth potential markets such as Australia and Vietnam.
   

4. Can you share more about how FIH’s businesses segments of restaurant leasing and subleasing, and food retail, complement each other?

• Leveraging the leasing and subleasing business, the Group gains valuable market insights that support the expansion of its restaurant operations and help identify quality Japanese brands with growth potential in overseas markets.
  
  
• Meanwhile, operating its own restaurants enhances the Group’s credibility with property owners, who recognise our operational expertise and offer favourable rental rates.
  
  This not only lowers costs for the Group’s own restaurant operations but also enables the Group to provide competitive sublease rates to acquire and retain subleasing customers.
  
  

5. Given the large number of players and low entry barriers to the F&B industry, how does FIH ensure it remains competitive?

• The Group benefits from the low barriers of entry in the F&B industry, which drives sustainable leasing demand for its restaurant leasing and subleasing business.
  
  At the same time, it differentiates its restaurant operations by maintaining high Japanese hospitality standards and focusing on staff training, sustaining customer loyalty while enabling the Group to strategically adjust pricing in response to market dynamics to ensure profitability.
  
  
• Furthermore, the Group meticulously selects business partners for overseas expansions, aiming to collaborate with restaurants that have a strong track record of 20-30 years of successful operations.
  
  The Group is also exploring ways to incorporate elements of Japanese culture beyond just food, such as anime, into our offerings. Together with the Group’s deep roots in the Singapore market, we are able to deliver authentic Japanese cuisine and hospitality while catering to local dining preferences.
  
  
• Backed by effective business partner engagement and social media marketing, the Group continues to grow its loyal customer base across brands like Kadohachi, Mikoto, Ushi Club, Hitsuji Club, Yatagarasu, and Yomo.

6. What are some notable developments that investors can expect in the future?

• The Group aims to grow its sublease portfolio to strengthen stable and recurring revenue streams, while scaling the food retail business to drive top-line growth. This includes the following initiatives:
  
  
  • Ongoing expansion of the sublease portfolio through organic property acquisition and collaboration with the Mynavi Restaurant Business Fund.
    
    
  • Strategic growth of the restaurant portfolio, with a focus on Malaysia and Japan.
    
    
  • Expansion of anime-themed restaurant concepts, such as the Moomin brand, alongside efforts to acquire additional anime licensing rights. 
    
    
  • Expansion of sublease properties in Japan and Singapore.
     

7. Can the Group share more about the real estate outlook in Japan, Malaysia, and Singapore, and how this affects its business?

• Property rental rates have risen significantly over the years, particularly in commercial facilities. 
  
  
• In response, the Group selectively opens restaurants only in locations with high traffic, to ensure sufficient customer flow including in commercial facilities to absorb rising rents.
  
  
• The Group’s strong site selection and rent negotiation capabilities have earned the trust of landlords, and we will continue to follow this disciplined approach.

8. Being in the F&B industry, what are some ESG or sustainability initiatives that the Group has taken or is planning to take?

• The Group plans to continue partnering with producers not only in Japan but also globally, to educate children and provide them with knowledge about crop production and cooking methods. 
  
  
• By actively maximising the use of existing restaurant spaces and store equipment, the Group is able to reduce waste and emissions generated from its restaurant operations.

9. Why should investors take a closer look at FIH?

• The Group has a unique and complementary business model, with stable and recurring income generated from the restaurant leasing and subleasing segment that ensures stability and resilience, while scaling revenue from the food retail business, which drives long-term growth.
  
  
• We also have an attractive dividend policy, with a guaranteed 20% dividend payout ratio for the next two years, offering strong shareholder returns.
  
  
• FIH also has strategic exposure to anime-themed concepts to capitalise on the growing popularity of anime culture to diversify restaurant portfolio and capture new customer groups. 
  
  
• Our Board of Directors and management team have deep industry expertise to support strategic execution and sustainable growth.

10 in 10 – 10 Questions in 10 Minutes with SGX-listed companies

Designed to be a short read, 10 in 10 provides insights into SGX-listed companies through a series of 10 Q&As with management. Through these Q&As, management will discuss current business objectives, key revenue drivers as well as the industry landscape. Expect to find wide-ranging topics that go beyond usual company financials.

This report contains factual commentary from the company’s management and is based on publicly announced information from the company.

For more, visit sgx.com/research.

For more company information, visitwww.fih.sg.

Click here for Food Innovators Holdings’ FY25 financial results release.