Amid the growing popularity of Japanese food in Thailand, the MAGURO restaurant brand has managed to place itself in the minds of Thai diners, with aggressive expansion on the cards this year and next.
Under the Maguro Group, which floated its shares on the Market for Alternative Investment (MAI) in early June, are three brands of Asian restaurants with a total of 31 branches in Bangkok and its vicinity.
Currently, the group operates 16 MAGURO Japanese restaurant and sushi bars, six SSAMTHING TOGETHER premium Korean barbecue restaurants, eight HITORI SHABU authentic Japanese-style shabu and sukiyaki restaurants, along with a branch of its HITORI SUKIYAKI sub brand, which offers an authentic Japanese sukiyaki course.
The group plans to launch and operate 13 other branches within this year, surpassing the 11 new outlets envisaged in the group's original plan. The total number of restaurants operated by the group ought to reach 38 by year-end, said chief executive Eakkalurk Sangsareedumrong.
Mr Eakkalurk said the group is also planning to have a standalone complex that will include all three of its existing restaurant brands operating within this year's fourth quarter.
According to a recent market research study, the Japanese food market has been growing by around 5-7% per annum and is currently worth 25 billion baht.
Mr Eakkalurk said the number of branches operated by the group could hit 50 in 2025, supported by a plan to launch two new brands in the second half of this year.
"We won't limit ourself to only Asian food but also western and Thai cuisine," he told the Bangkok Post, without wishing to elaborate.
UNFAZED BY SLOWDOWN
Established in 2015 by four Thai founders -- one being Mr Eakkalurk -- Maguro managed to get through the pandemic, during which restaurants were forced to close for a period around the peak of the crisis. During a later period of the pandemic, people were prevented from dining out.
During the period when restaurants were unable to operate during the pandemic, the company introduced food delivery services through the MAGURO GO platform, which continue to operate today. The SSAMTHING TOGETHER brand was launched in 2021, which was followed by the launch of the HITORI SHABU brand in 2022.
"Since our inception, none of our restaurants had been closed and, despite Covid, our balance sheet has remained in positive territory, thanks to the strength of our brand," said Mr Eakkalurk.
In 2021, Maguro's total revenue stood at 388 million baht, with its profit surging by almost two digits to 9.4 million baht. Revenue soared to 666 million a year later, with profit tripling to 31.4 million. In 2023, Maguro's revenue reached 1.04 billion baht while the company posted earnings of 73 million baht.
During January to March 2024, the company's revenue grew 25.8% year-on-year to 296.8 million. The increase in revenue came from the opening of seven additional branches since the first quarter of 2023, including two branches of MAGURO, one branch of SSAMTHING TOGETHER, and four branches of HITORI SHABU. The company has yet to announce its results for this year's second quarter.
The chief executive said while Maguro's competitors reported a drop of nearly two digits of same store sales during the first six months of 2024 as the economic slowdown affected companies across the board, Maguro's same store sales only fell by about 2-3%.
The company is aiming to post a 30% increase in revenue for the full year. Financial performance in the latter half should benefit from the government's stimulus measures, including the 10,000-baht digital handout scheme, along with the arrival of more foreign tourists, which would contribute significantly to Maguro's total revenue.
"Our ultimate goal is to be top of mind among Thai diners," he said."The company's restaurant business has been adhering to the Japanese philosophy of 'Give More Culture', which is the starting point for operating a premium-mass restaurant business, to deliver valuable and quality dining experiences to customers."
"Thanks to our strong R&D capability, Maguro has come up with a seasonal menu almost every month, featuring our fresh materials which are imported directly from Japan. Customers are satisfied with their experience when visiting our restaurants in terms of the prices they pay," said Teerapob Karnlert, vice-president for marketing at Maguro Group.
EXPANSION MODE
Maguro Group has mobilised more than 340 million baht from its MAI debut on June 5. The IPO shares were priced at 15.9 baht apiece. Traded within the agro & food industry group, the company had a market capitalisation of 2 billion baht when it was listed.
The IPO price was equivalent to a price-to-earnings ratio of 27.3 times. The earnings per share stood at 0.58 baht, which was calculated from the company's net profit over the past 12 months.
After the listing, the four founders now each own 14.8% of the company, while Holistic Impact Pte Ltd, a private equity fund, holds 13.5%.
The proceeds from the fundraising will be used to expand the company's business, renovate existing branches and the central kitchens, install and upgrade IT systems related to operations to increase work efficiency and support future branch expansion, and as working capital.
"We are debt free," Mr Eakkalurk said. "That enables us to continue to expand our restaurant business without the need of additional fundraising or finding a new partner."
Each of Maguro's restaurants based in malls across Bangkok and the suburbs requires an investment of around 10-12 million baht excluding the rental fee. The company's first stand-alone complex is slated to open in October at a total cost of 70 million baht.
"Beyond Bangkok, we are also targeting big cities and provinces such as Pattaya, Phuket and Khon Kaen to expand our business into over the next one to two years. But this year, we will solely focus on operating new branches in Bangkok," Mr Eakkalurk said.
