Japanese F&B operator Food Innovators Holdings aims for Singapore listing to be springboard to Asia

JAPANESE food and beverage (F&B) operator Food Innovators Holdings (FIH) is aiming to leverage its upcoming listing in Singapore to expand into Asian markets.

The group – which owns and operates several restaurants in Japan, Singapore and Malaysia – is aiming for an initial public offering (IPO) on the Catalist board of the Singapore Exchange as a way to raise its profile both within and outside Japan, said chief executive Yasuaki Kubota last Tuesday (Oct 8).

“If we are listed in Singapore, we will be known to a lot of people in Asia (and) our credibility will also increase… so we thought we would have more advantages if we are listed in Singapore (than in Japan),” he said in Japanese during an interview with The Business Times.

The company on Wednesday announced it is planning to raise S$3.1 million in its IPO, through 14 million new shares to be issued at S$0.22 apiece. This will comprise 13 million placement shares and one million public shares, and represent 10.8 per cent of the company’s total number of shares.

The expected market capitalisation of FIH is S$24.9 million, based on a post-IPO issued and paid-up share capital of 113 million shares.

The company, incorporated in 2019, has two main business pillars: food retail in Japan, Singapore and Malaysia, and restaurant leasing and subleasing in Japan. As at August, the group had about 111 employees in all its markets, with 70 per cent of them working in the food retail business.

Under food retail, FIH owns and operates restaurant concepts. It also helps Japanese food concepts expand into other markets.

As at August this year, it ran a total of 26 restaurants – 12 in Japan, 10 in Singapore, and four in Malaysia. It also has a bakery cafe and central kitchen in Malaysia.

Kubota highlighted that in Singapore, the brand directly owns and operates Kadohachi, a sushi izakaya restaurant.

The other concepts in Singapore, such as tempura rice bowl eatery Tendon Kohaku and lamb barbeque restaurant The Hitsuji Club, are “collaboration restaurants” – FIH owns the restaurant, but its operations are outsourced to the partner Japanese food operator.

Restaurant revenue is then split between the owners and FIH, said Kubota.

Revenue for its food retail business is split largely between directly-owned restaurants (55 per cent) and collaboration restaurants (40 per cent). The remaining 5 per cent comes from F&B consulting and operation management services, such as essential support services and leasing spaces.

“If a Japanese restaurant operator wants to expand overseas, we will be able to help provide comprehensive end-to-end consulting (through) our restaurant operation expertise,” he said.

Kubota added that the company also has knowledge on selecting optimal sites for F&B concepts due to its subleasing business.

Under the restaurant leasing and subleasing segment, the group owned 214 properties in Japan, largely in the Tokyo metropolitan area, as at August. This portfolio has an occupancy rate of 99.2 per cent as at Feb 29 this year, the end of its latest financial year.

Kubota said the group is confident its dual-growth strategy can “enhance its current operations and drive sustained top-line growth”.

For FY2024, the company reported a net profit of S$1.4 million, reversing from a loss of S$3.4 million a year ago. Revenue was S$43.8 million, up 10.3 per cent from S$39.7 million year on year.

Bullish on Singapore, Malaysia

Gross proceeds of the IPO will largely go towards expanding the group’s presence both within and outside Japan.

About 16.2 per cent will be used to fund the group’s food retail business outside Japan, including Singapore and Malaysia, noted Kubota. This overseas expansion was a key reason for listing in Singapore.

Malaysia, in particular, is a “growing market”, he said. In its latest financials, about S$5.5 million of food retail business revenue came from Malaysia, rising 34.2 per cent year on year from S$4.1 million in FY2023. It is also over 200 per cent higher compared with S$1.8 million in FY2022.

In comparison, the growth of its Singapore and Japan food retail business was lower than Malaysia’s, on an on-year basis. The group also previously had a Taiwanese subsidiary, but it was disposed of in FY2024, he said.

Meanwhile, another 16.2 per cent of the gross proceeds from the IPO will be used to fund acquisitions of new Japanese food brands, as part of the group’s expansion and diversification efforts in Singapore and Malaysia.

This amount also includes the acquisition of operating rights for more themed restaurants based on popular Japanese animation (anime) characters in Japan. For instance, the group currently holds the Moomin character brand licence and operates a cafe with that theme in Karuizawa.

They have other themes coming up as well. “We cannot disclose the name of the anime, but we would like to open another anime restaurant in FY2026,” he said.

The remaining 3.7 per cent of gross proceeds will go towards general working capital. 

Confidence in the market

FIH’s listing comes after the delisting of another Japanese restaurant operator.

RE&S Holdings , which runs yakiniku chain Yakiniku-Go and doughnut chain Mister Donut, is expected to be delisted on Oct 17, after the company agreed to a privatisation offer from a unit of private equity firm Southern Capital Group.

Japanese department store operator Isetan Singapore was also delisted in September after it was taken private by its parent company Isetan Mitsukoshi.

Kubota is nonetheless confident that the group’s competitive advantage will set it apart from any peers and make their stock attractive.

This is as FIH has more than 200 service tenants under its subleasing business in Japan and can support these brands if they wish to expand overseas, whereas other F&B operators may only have a limited number of brands in their portfolio.

Applications for FIH’s shares close at noon on Oct 14. The shares are expected to commence trading at 9 am on Oct 16.