Research and Trading Portal for US-listed China Stocks · March 29, 2017
China Tracker - Details for Country Style Cooking Restaurant (CCSC)
Country Style Cooking Restaurant
Our net income came in negative for the second quarter, mainly due to the one-time tax levy that we explained in detail in our June 20, 2011 press release. Our operating income was affected by the large number of new restaurants that we opened recently. However, we believe that our growth strategy, which has sacrificed some short-term profitability, is the right strategy for the Company in the long run.
For full year 2011, the Company now expects 70 – 80 new restaurant openings, up from 65 - 75. For the third quarter of 2011, the Company currently estimates that its revenue will be between $43.5 million and $45.0 million, representing a year-over-year growth of between approximately 34.3% and 39.1%.
On June 15, 2011, the Company received notice that the PRC National Audit Office recently issued a letter to the State Tax Bureau in Chongqing stating that a few restaurant companies, including the Company's Chongqing subsidiary, should not have been granted the Preferential Tax Treatment for 2009. ... In addition, the Company intends to make additional provisions for the potential payment of additional enterprise income tax based on the standard rate of 25% for the years 2008 and 2010. This provision is based on the Company's assessment that the above PRC National Audit Office ruling has brought uncertainties to the Preferential Tax Treatment its Chongqing subsidiary enjoyed in 2008 and 2010 as well. As a result of the foregoing, the Company will recognize a one-time tax liability of US$2.7 million related to the change in the Preferential Tax Treatment for the three years of 2008, 2009 and 2010 in the quarter ending June 30, 2011. Of that amount, US$1.0 million will be paid in a timely manner as requested by the local tax authority.
Country Style Cooking Restaurant Chain is further taking this opportunity to update its second quarter 2011 revenue performance. The Company currently estimates that its revenue for the second quarter will be between $35.0 million and $35.8 million, representing a year-over-year growth of between approximately 35% and 38%.
The Company estimates that its revenue for the full year of 2011 will be between RMB1.1 billion and RMB1.2 billion, representing a year over year growth rate of approximately 47% and 61%. "We believe that we are still in the early stage of our business expansion plans, and that there are ample opportunities for us to grow not only in our core market in China's Southwestern region but also in China's other regions in the coming years. Our business concept continues to garner universal appeal in China, and we continue to execute on our growth strategy and to elevate our brand into a household name throughout China. We are very glad that we started offering set meals on 8 additional routes of fast trains in China. At Country Style Cooking Restaurant, we are passionately committed toward fulfilling our vision of becoming China's leading quick-service restaurant chain. ... For the full year 2011, we plan to open 65 to 75 new restaurants."