Text: Xiangshan Finance.
Compared with the Bama Tea Industry, which has ten years of IPO experience but still has no hope of going public, Lancang Ancient Tea is undoubtedly lucky.
From the first IPO application in June 2020 to the official landing in Hong Kong on December 22 this year, Lancang Ancient Tea's listing road has only been three years, but it has broken the curse of not adding new tea in the capital market in the past ten years.
Therefore, from the perspective of the industry, the successful listing of Lancang Ancient Tea also marks that China's tea industry has officially entered the era of branding, capitalization and scale, which is a milestone.
However, what is interesting is that compared with the excitement of the entire tea industry, the more objective and rational capital market is not as excited as imagined, on the contrary, on the day of listing, Lancang ancient tea was poured a basin of cold water by investorsDirectly from the opening of 107 Hong Kong dollars, a sharp decline of 1869% to 87 Hong Kong dollars, completely below the issue price.
This shows that investors may still have doubts about the model logic of Lancang ancient tea and traditional tea companies......
Behind the listing that is, "breaking", there are internal and external troubles of Lancang ancient tea
As we all know, the capital market depends on the "three bowls of noodles": fundamentals, capital and emotions.
Among them, the capital side and the emotional side are attached to the fundamentals, although they are far away.
Therefore, if you want to explore the investor logic behind the listing of Lancang ancient tea, it is necessary to return to the most basic performance level.
In this regard, Xiangshan Finance choosesFrom the growth of profitability, asset financial risk and external market competition three aspects:
One is the most basic aspect of growth and profitabilityAccording to the prospectus, from 2020 to the first half of this year, the total revenue of Lancang Ancient Tea was 40.5 billion yuan, 55.9 billion yuan, 46.3 billion and 23.2 billion yuan;The net profit was 12.3 billion yuan, 12.9 billion yuan, 0700 million yuan and 0$2.4 billion.
It can be clearly seen that in 2022, Lancang Ancient Tea will experience varying degrees of decline in revenue and net profit. In particular, the net profit, on the basis of 58 million yuan more revenue in 2022 than in 2020, its net profit scale has been nearly halved. In the first half of this year, although the year-on-year growth rate of its revenue turned from negative to positive, it was only 165%, while the net profit attributable to the parent company still fell sharply by 21 year-on-year16%。
Behind this is the continuous decline in the net profit margin of Lancang ancient tea. From 2020 to the first half of this year, the net profit margin of Lancang ancient tea was as follows: 2% and 1016%, a decrease of more than half in three years.
So what is the decline in net profit margin corresponding to the gross profit margin that represents the market competitiveness of the product?Or is it due to the increased investment on the cost side?
Judging from the prospectus, from 2020 to 2022, the gross profit margins of Lancang ancient tea are: 9% and 659%, which is indeed a significant decline. However, the good thing is that Lancang Ancient Tea said that the decline in gross profit margin is mainly due to the adjustment of product structure, and the company has launched more Pu'er raw tea products in the past two years, and its gross profit margin is generally lower than that of Pu'er ripe tea products.
Indeed, in the 1966 series, which is the backbone of Lancang ancient tea's revenue, the gross profit margin of ripe Pu'er tea is maintained at more than 74% all year round, and the gross profit margin of raw tea is above 60%. At the same time, the revenue share of raw tea in the 1966 series increased from 23% in 2020 to 24% in 20226%, while the proportion of cooked tea revenue has increased from 506% plummeted to 385%。
In addition, in the same period, the marketing and administrative expenses of Lancang ancient tea increased from 08.7 billion yuan, 0$5.6 billion** to $13.6 billion yuan, 07.8 billion yuan.
Under the influence of layers of factors, in the end, the profitability of Lancang ancient tea was under great pressure.
It's just that Lancang Ancient Tea took the initiative to reduce the product structure of high gross margins, and the increase in investment on the expense side has not been able to exchange for the continuous rise in revenue, is this a short-term downturn caused by the epidemic, or a strategic mistake, or a long-term growth problem that cannot be sold?It remains to be seen, I'm afraid.
The second is the financial risk indexOn the whole, the asset-liability ratio of about 40% of Lancang ancient tea is not high, and it is even far lower than that of the Bama tea industry, which is a good bright spot.
However, in depth, in the "total assets" of Lancang Ancient Tea of 1.4 billion yuan in 2022, the "inventory" will reach 78.4 billion yuan, and in the first half of this year, it further reached 83.5 billion yuan, accounting for half of the country. Although different from other teas, Pu'er tea is a bit like liquor, with the characteristics of getting older and more fragrant, and the more valuable it is. Therefore, even if it cannot be sold in the short term, it can be stored for a long time and wait for appreciation.
But the problem is that the actual operation of the company cannot only look at the future and ignore the present. The high level of tea inventory will directly exacerbate the pressure on the short-term capital turnover of tea enterprises, which in turn will affect the liquidity of funds and the pace of long-term market expansion. Not to mention, the inventory turnover days of Lancang ancient tea have now increased from 1,345 days in 2020 to 1,617 days in 2022 and 1,588 days in the first half of this year, and it takes at least 4 and a half years to sell a single tea.
Perhaps because of this, the borrowing scale of Lancang ancient tea has been increasing in recent years, and the amount of borrowing in the "current liability" project alone has reached 11.2 billion yuan, much higher than the 65.65 million yuan scale of Lancang ancient tea's "cash and cash equivalents" in the same period.
The third point is the competition in the external market。The reason why this point is brought out is mainly because Lancang ancient tea is not the absolute head brand in the Pu'er tea market, on the contraryAccording to the previous prospectus, in 2021, Lancang Ancient Tea ranked second in the ranking of Pu'er tea product revenue of China's five major Pu'er tea companies, with a market share of 28%。However, in the latest version of the prospectus, Lancang Ancient Tea said that the company is the third largest Pu'er tea company in China in terms of revenue generated by Pu'er tea products in 2022, with a market share of 24%This is enough to illustrate the competitive pressure of external market faced by Lancang Ancient Tea.
In fact, the overall characteristics of China's tea market are "big industries, small companies", even in terms of specific Pu'er tea sub-categories, there are more than 700 brand players participating in the market in 2021. Although there is data**, the market size of Pu'er tea will increase from 18.5 billion yuan in 2021 to 31.1 billion yuan in 2026, but in the case of overcrowded participants, if the brand wants to achieve "the stronger the stronger" in the future, I am afraid it is still inseparable from the involution competition between tea companies.
Therefore, Lancang Ancient Tea also admits that if the industry leader continues to rapidly expand its store network to gain more market share, the Pu'er tea market may be saturated, which may adversely affect the company's sales, operating performance and financial condition......
From playing tea to playing standards, when will Lancang ancient tea usher in the release of valuation?
Looking back, why was it difficult to see traditional tea companies listed in the past, whether it was A-shares or Hong Kong stocks?Why is it that even though Lancang Ancient Tea has successfully landed in the capital market now, it has broken down when it is listed?
In the view of Xiangshan Finance, these two problems actually point to the dilemma of "making tea or making standards" that traditional Chinese tea companies have been facing for a long time.
Everybody knows,The strong attributes of non-standard tea products are the key to the difficulty of standardization in China's tea market, which is mainly reflected in two aspects:
First, the production of the planting end of the non-standard. As a cash crop for smallholder farmers, tea needs to be grown in high mountains and hills, and the degree of mechanization of production is low, and it is difficult to improve production efficiency. Moreover, the quality and yield of tea will also be affected by the climate, the year of the tea tree, etc., and it is almost impossible to get rid of the restriction of relying on the sky to eat, which is an objective factor at the planting end.
However, traditional tea companies not only did not improve the status quo of non-standard production, but further amplified it. For example, a cup of green tea, if the origin originates from the core production area of Longjing in West Lake, its ** will be higher than ordinary green tea. In the picking season, this cup of Longjing tea has the distinction of "it is the best product before the rain, and it is a treasure before the dawn". At the same time, the production process and the quality of the finished tea can determine whether the final price of a cup of tea is tens or tens of thousands.
From a logical point of view, using the scarcity of one origin to prove the scarcity of another brand or product is not like the high-end gameplay of Moutai that "if you leave Moutai Town, you can't brew Moutai liquor".
The second is the non-standard technology of the processing and production end, to be precise, the non-standard tea master. Behind the brands of Lancang Ancient Tea and Bama Tea Industry, there is a story of a tea master. This is also quite similar to the way Baijiu likes to invite masters to blend famous wines.
But the difference is that the master of liquor has formulated the standards after the blending, and the latecomers can strictly follow them, and it doesn't matter if the master makes the wine himself. Tea making is about a thousand people and thousands of faces, in the tea shake, kneading and drying stages, the final effect brought by different techniques and techniques is also different.
However, what is interesting is that with the disclosure of the business data of small pots of tea represented by "masters", after consumers found that even if the roasted tea masters rotated 24 hours a day, it was impossible to support sales.
SoObjectively speaking, the product market play background of tea and liquor is similar.
But unfortunately, perhaps in order to pursue the ultra-high gross profit margin and premium space brought by non-standard products, most traditional tea companies still choose to take "tea" to find the "standard" of value. Actually, that's the answerWhy is 70,000 tea companies no match for one Lipton?Because the idea of "finding the standard with tea" is destined to the brand to take the route of small and beautiful, it is difficult to do it on a large scale, let alone go public.
Therefore, now traditional tea companies mostly start from high-end series, create brand tonality, and then launch one or more popular tea series to expand the market scale, Lancang Ancient Tea 1966 and "Tea Mother" may be the same.
However, according to the data of Tianyancha APP, the market base of mass tea is much larger than that of high-end tea, and once the high-end "1966" cannot keep up with the revenue growth of "Tea Mother", the gross profit margin will inevitably fall ......
In this way, the standardization of tea seems to be an unsolvable problem
Not really. Objectively speaking, liquor, like tea, has a strong fragrance, sauce fragrance, fragrance and fragrance and other categories, if you want to develop a quality standard that meets everyone's taste, it is also impossible. Therefore, liquor has chosen a breakthrough point that can not only retain the individualization of quality, but also break the non-standard limitations at the sales level, that is, to formulate ** standards, ** belts, and take ** standards to find liquor.
So, whether it is the wine of Sichuan, or the wine of Moutai Town, Guizhou, or Xinghua Village, Shanxi;Whether it's a strong fragrance, a sauce fragrance or a light fragrance;Whether it is 12987 or other brewing process methods, standing firmly above 1000 yuan ** band, it is high-end wine, 500-800 yuan is sub-high-end wine, 300-500 yuan is high-end wine, and the rest is low-end wine.
The standardization of the liquor market was thus established.
From this point of view, small pots of tea seem to have been "standardized" in China's tea industry.
What is the business logic of small pots of tea?It's to take the "standard" and go to tea. That is, first set up the quality standards of "masterpieces", unify product pricing, and then find good quality tea that meets the standards. The overall is more inclined to the logic of mass and factory FMCG.
In this process, small pots of tea almost do not need to directly let consumers remember how many screenings and frying of small pots of tea products have undergone and how good the raw tea is, but only need to make this standard deeply rooted in the hearts of the people.
In contrast, traditional tea companies need to prove the quality of tea, but also need to prove the reasonableness of the value standard, which is equivalent to being both an athlete and a referee, how can consumers accept and recognize it?
Therefore, even if Lancang Ancient Tea is listed now, the standardization problem that investors are most looking forward to seems to have not been solved, so the corresponding valuation imagination will inevitably be suppressed by the market.
In other words, for Lancang Ancient Tea and the entire tea industry, listing is by no means the end, but the starting point of facing the problem of market standardization. What Lancang Ancient Tea should think about and decide in the future is whether to put down its body and make "standard tea", or continue to make "personalized tea" ......
Disclaimer:This article is based on the company's statutory disclosures and public information, but the author does not guarantee the completeness and timeliness of the information. Another: **There are risks, and you need to be cautious when entering the market. The article does not constitute investment advice, and whether to invest or not should be determined by yourself.