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Cantonese classics a tonic for Soup Holdings

Khairani Afifi Noordin
Khairani Afifi Noordin • 3 min read
Cantonese classics a tonic for Soup Holdings
The company’s most recent financial results are not as robust as before. Photo: Samuel Isaac Chua/The Edge Singapore
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Once popular for its herbal soups, homegrown restaurant chain Soup Holdings is now more famous for its Samsui Ginger Chicken.

Founded in 1991, the company was initially known for its herbal soups. However, the steamed chicken dish became popular after founder Mok Yip Peng introduced the dish and a variety of Cantonese home-cooked dishes in 1994.

Traditionally eaten by the Samsui women who arrived in Singapore in the mid-1930s as construction workers, Samsui Ginger Chicken was only enjoyed during the Lunar New Year. The real flavour of the steamed chicken dish comes from the ginger sauce, which is made with fresh ginger and sesame oil. For the best experience, dip the chicken into the sauce and wrap it in lettuce for a satisfying crunch.

Today, Soup Holdings has significantly expanded its business, including brands such as dim sum chains Teahouse and Little Teahouse, coffeeshop Cafe O and zi char (“cook and fry” in Hokkien) restaurant Pot Luck. The company previously operated Kampong Days and Dian Xiao Er. Kampong Days closed due to profitability issues, while the partnership with Dian Xiao Er ended after a lengthy legal dispute.

The challenges that come with managing various brands were highlighted when the company on April 21 announced it had received a letter of intended summons from the Singapore Food Agency. The agency had observed small cockroaches at one of the Cafe O outlets. The company says it has resolved the issue and clarified that the outlet remains operational within the 12 demerit points limit.

The company also runs a Soup Restaurant franchise in Malaysia and Indonesia. Financially, it has shown resilience and profitability, even at the height of the pandemic. Thiveyen Kathirrasan, The Edge Singapore’s in-house analyst, has added Soup Holdings to its global portfolio, praising the company for consistently reporting positive net income and operating cash flow each year.

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In “Undervalued Soup Holdings serves up liquid balance sheet spiced by ginger sauce”, published on Feb 13, Thiveyen noted that the company’s cash ratio, quick ratio and current ratio are 1.26, 1.34 and 1.56 times, respectively, indicating ample liquidity for any short-term obligations or liabilities. The company is also net cash, indicating that solvency risk, which is the ability of the company to meet its long-term obligations or liabilities, is minimal.

However, the company’s most recent financial results are not as robust as before. In 1HFY2024 ended June, the company’s earnings plunged 87.5% y-o-y to $207,000 on flat revenue growth. Although there is increased revenue from existing outlets, the company has closed a few outlets due to property development works.

Meanwhile, its food processing, distribution and procurement services segment experienced a 28.4% y-o-y decline in revenue due to the end of contracts for the supply of ready meals through the central kitchen location in the Enabling Village. The company is also facing higher costs of raw materials, contract workers, maintenance and advertising, among others.

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To this end, the company is looking to expand its product and service offerings to reduce reliance on any single revenue stream, aside from looking for new ready meals contracts with agencies and private institutions to bolster revenue.

Soup Holdings aims to expand into new areas, including the manufacturing and export of its bottled sauces. Since 2013, the company has been offering bottled ginger sauce, sambal sauce and rich and savoury condiment XO sauce under the Samsui brand.

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