TH International (THCH) AI Stock Analysis

• Market Cap: $86.30M
• Dividend Yield: N/A
• Average Volume (3M): 7.98K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.06
• Revenue Growth: -12.77%
• EPS Growth: 52.05%
• Country: US
• Employees: 2,367
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): -0.33
• Shares Outstanding: 33,193,190
• 10 Day Avg. Volume: 7,038
• 30 Day Avg. Volume: 7,982
• PEG Ratio: 0.04
• Price to Book (P/B): -1.00
• Price to Sales (P/S): 0.60
• P/FCF Ratio: -5.90
• Enterprise Value/Market Cap: 3.82
• Enterprise Value/Revenue: 0.25
• Enterprise Value/Gross Profit: 1.48
• Enterprise Value/Ebitda: -1.48
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: $2.50 ▼(-3.85% Downside)

TH International's overall stock score reflects significant financial challenges and weak technical indicators. The company's financial performance is the most pressing concern, with declining revenues and high leverage. While the earnings call highlighted some positive trends, such as growth in food revenue and digital orders, these are overshadowed by operational inefficiencies and increased costs. The valuation metrics further underscore the company's struggles to deliver shareholder value.

Positive Factors

Growth in Digital Orders

The increase in digital orders indicates a strong adaptation to consumer preferences for convenience and technology, potentially driving long-term sales growth and customer engagement.

Expansion of Store Footprint

Expanding into new cities and converting stores enhances market presence and brand recognition, supporting long-term growth and competitive positioning.

Growth in Loyalty Membership

The growth in loyalty memberships strengthens customer retention and lifetime value, providing a stable revenue base and opportunities for targeted marketing.

Negative Factors

Declining Company-Owned Store Revenues

The decline in company-owned store revenues due to closures and decreased same-store sales growth could hinder overall revenue and profitability if not addressed.

High Leverage and Negative Equity

High leverage and negative equity indicate financial instability, limiting the company's ability to invest in growth and increasing vulnerability to economic downturns.

Increase in Delivery Costs

Rising delivery costs could pressure margins, especially if delivery continues to grow as a revenue channel, necessitating efficiency improvements to maintain profitability.

TH International Business Overview & Revenue Model

Company Description

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau. As of September 28, 2022, it had approximately 460 coffee shops across the People's Republic of China. The company was incorporated in 2018 and is based in Shanghai, the People's Republic of China. TH International Limited is a subsidiary of Tim Hortons Inc.

How the Company Makes Money

TH International generates revenue primarily through the franchising of its restaurant brands, where franchisees pay initial franchise fees and ongoing royalties based on their sales. Additionally, the company earns income from corporate-owned restaurant locations, which contribute directly to its sales figures. Significant partnerships with suppliers and distributors also play a vital role in enhancing profitability, as they allow THCH to negotiate favorable terms and reduce costs. Furthermore, the company may benefit from promotional collaborations and marketing agreements that help drive brand awareness and customer traffic to its locations.

TH International Financial Statement Overview

Summary

TH International faces significant financial challenges. The income statement shows declining revenues and persistent losses, with a negative net profit margin of -26.37%. The balance sheet is highly leveraged with negative equity, and the cash flow statement, while showing some improvement, still indicates operational cash deficits. Overall, the financial position is precarious.

Income Statement

TH International's income statement reveals significant challenges. The company has experienced declining revenue growth, with a negative growth rate of -1.31% in the TTM period. Profitability metrics are concerning, with a negative net profit margin of -26.37% and a negative EBIT margin of -25.59%. These figures indicate substantial losses and operational inefficiencies. The gross profit margin is relatively low at 16.56%, suggesting limited pricing power or high cost of goods sold. Overall, the income statement reflects a struggling business with declining revenues and persistent losses.

Balance Sheet

The balance sheet of TH International shows a precarious financial position. The company has a negative stockholders' equity, resulting in a negative debt-to-equity ratio of -1.90, indicating that liabilities exceed assets. This high leverage poses a significant risk to financial stability. The return on equity is positive at 41.67%, but this is primarily due to the negative equity base rather than operational success. The equity ratio is also negative, further highlighting the company's financial distress. Overall, the balance sheet suggests a highly leveraged company with limited financial flexibility.

Cash Flow

TH International's cash flow statement indicates some improvement, but challenges remain. The free cash flow growth rate is positive at 250.24%, suggesting better cash management compared to previous periods. However, the operating cash flow is negative, and the operating cash flow to net income ratio is -0.03, indicating that the company is not generating sufficient cash from operations to cover its losses. The free cash flow to net income ratio is 1.0, suggesting that all free cash flow is being used to cover net losses. Overall, while there are signs of improvement, the cash flow situation remains weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.34B	1.39B	1.58B	1.01B	643.37M	212.08M
Gross Profit	222.16M	213.56M	417.16M	33.05M	13.81M	6.62M
EBITDA	-222.41M	-266.19M	-686.50M	-431.72M	-297.64M	-115.22M
Net Income	-353.89M	-412.08M	-876.25M	-742.65M	-381.72M	-142.00M
Balance Sheet
Total Assets	1.39B	1.56B	2.22B	2.64B	1.28B	580.36M
Cash, Cash Equivalents and Short-Term Investments	155.22M	161.37M	225.72M	611.45M	395.00M	180.35M
Total Debt	1.84B	1.88B	1.87B	1.77B	522.42M	0.00
Total Liabilities	2.35B	2.40B	2.64B	2.53B	945.80M	147.31M
Stockholders Equity	-968.75M	-840.89M	-427.21M	108.85M	335.54M	428.29M
Cash Flow
Free Cash Flow	-46.02M	-142.51M	-488.53M	-621.86M	-580.28M	-290.52M
Operating Cash Flow	-46.02M	-39.67M	-196.13M	-286.93M	-244.97M	-145.77M
Investing Cash Flow	-32.73M	-8.04M	60.00M	-705.17M	-335.28M	-144.75M
Financing Cash Flow	87.89M	26.00M	80.83M	827.16M	798.00M	221.12M

TH International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.60
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THCH, the sentiment is Positive. The current price of 2.6 is above the 20-day moving average (MA) of 2.60, above the 50-day MA of 2.58, and below the 200-day MA of 2.74, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 52.58 is Neutral, neither overbought nor oversold. The STOCH value of 72.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for THCH.

TH International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	68 Neutral	$33.11M	12.52	20.05%	―	0.35%	9.25%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
THCH	45 Neutral	$86.30M	―	―	―	-12.77%	52.05%
RRGB	41 Neutral	$79.04M	―	―	―	-3.61%	2.06%
FAT	41 Neutral	$32.02M	-0.14	―	566.60%	-5.26%	-44.78%
GENK	41 Neutral	$88.92M	―	-8.89%	1.20%	9.36%	-249.08%
STKS	38 Underperform	$62.52M	―	-51.90%	―	51.57%	-367.14%

TH International Corporate Events

TH International Announces New Convertible Notes Issuance

On October 31, 2025, TH International Limited announced a definitive agreement for the issuance of Senior Secured Convertible Notes and amendments to its existing 2024 unsecured convertible notes. The new notes, due September 2029, amount to approximately $89.9 million and will be used partly to repurchase existing notes due 2026. The transaction, approved by the board, is expected to close in Q4 2025, pending regulatory approvals in China. This strategic financial maneuver aims to strengthen Tims China’s financial position, aligning its debt maturity and conversion terms, and potentially enhancing its market standing.

Tims China Reports Q2 2025 Financial Results with Positive EBITDA and Growth in Loyalty Membership

On August 26, 2025, Tims China announced its financial results for the second quarter of 2025, highlighting a 1.4% year-over-year increase in system sales to RMB409.5 million and a positive adjusted corporate EBITDA of RMB2.2 million. Despite a 4.9% decrease in total revenues from the same quarter in 2024, the company reported a significant growth in its loyalty club membership, reaching 26.2 million members, a 22.4% increase year-over-year. The company also achieved a historical high in food revenue contribution as a percentage of system sales, reflecting the success of its ‘Light & Fit Lunch Box’ platform. However, the quarter also saw a net closure of nine stores, with a decrease in revenues from company-owned stores due to underperforming store closures and a decline in same-store sales growth.