When Dian Xiao Er became independent of Soup Restaurant last year, the expectation was that Soup Restaurant's earnings would be hit badly. If we look at the year 2011, 42% of Soup Restaurant's profit was contributed by Dian Xiao Er.
In 2012, although profit from continuing operations, net of tax, jumped 126.9% year on year, removing the contribution by Dian Xiao Er reveals a more modest increase of 59%. Even so, we should take note that the performance of Soup Restaurant was boosted by a one time gain from the divestment of Dian Xiao Er to the tune of $3.4m.
If we examine my initial motivation to invest in Soup Restaurant last year, a big part of it was because I thought the probability of a special dividend being declared was quite good. Of course, since I like Soup Restaurant's food and would patronise their restaurants monthly, there is the benefit of getting a discount as a shareholder during my visits ......