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Original debut |Golden Horn Finance.
Author |Zelda.
With the re-listing of Mixue Bingcheng, the new tea drink track has once again been put in the spotlight of the capital market.
On January 2, after there was no substantial progress in the listing of A-shares, Mixue Bingcheng, which has been established for 26 years and focuses on ready-made low-cost tea, switched to Hong Kong stocks and submitted a listing application to the Hong Kong Stock Exchange.
Mixue Bingcheng can be described as a giant in the new tea drink track. As of September 30, 2023, the total number of stores under its brands exceeded 360,000 cups, with a total of about 5.8 billion cups. In terms of the number of stores and the number of cups, Mixue Bingcheng ranks first in China.
1. The world's second largest ready-made beverage company.
However, with the increasingly serious involution of the new tea drink track, after 2022, there will be obvious growth bottlenecks in the revenue and net profit of Mixue Bingcheng, and the store data has fallen into the embarrassing situation of "opening stores frantically while closing a large number of stores".
At the same time, with the increasing pressure of market competition, the capital market has also begun to look at the decline of tea brands with their feet. As of January 3, 2024, the share price of Nai Xue, which belongs to the same new tea drink track as Mixue Bingcheng, closed at 313 Hong Kong dollars, compared with last year's high has fallen by more than 6 percent, and the stock price has fallen by more than 8 percent from the early stage of listing.
This means that in the process of impacting the IPO, in addition to the question of whether it can be listed in the end, it also has to face the risk of whether the stock price will fluctuate sharply or even break after listing in the context of the decline of the capital market.
Poor timing of the time-to-market
The financing process of Mixue Bingcheng has been closely watched by the market.
As early as December 2020, Mixue Bingcheng completed a round of financing, at that time, it introduced three institutions, namely Longzhu Beauty City, a subsidiary of Meituan Dragon Ball, Hillhouse Yunqi, a subsidiary of Hillhouse Capital, and Tianjin Panxue, a subsidiary of CPE Yuanfeng, to hold shares respectively. 00%, the corresponding investment amount is 93.3 billion yuan, 93.3 billion yuan, 46.7 billion yuan. Based on this calculation, the valuation of Mixue Bingcheng after this round of financing is 2333.3 billion yuan.
Subsequently, Mixue Bingcheng began to plan for an A-share listing. On September 22, 2022, according to the China Securities Regulatory Commission, Mixue Bingcheng plans to be listed on the main board of the Shenzhen Stock Exchange.
However, in 2023, the A-share listing outlet will be tightened, and the policy will be biased towards allowing more technology companies with capital needs to be listed, while the consumer companies with chain operations will become stricter, and the latter will be classified as "discouraged from listing", and the A-share listing of Mixue Bingcheng will not be completed.
In desperation, Mixue Bingcheng was forced to switch to a Hong Kong stock IPO in the near future, with Bank of America, Goldman Sachs and UBS Group AG as joint sponsors.
According to the prospectus, the main purpose of the IPO fundraising is to expand production capacity, renovate and expand existing facilities, improve the flexibility and efficiency of the logistics system, and expand overseas businessSecondly, it will be used for brand IP construction and omni-channel marketingIn addition, the funds raised are also planned to be used to strengthen the digital and intelligent capabilities of all business segments.
For Mixue Bingcheng to be listed in a hurry in recent years, some industry insiders believe that whether it is expanding the sinking market or overseas markets, tea brands need sufficient funds to support the expansion planIn addition, the construction of a complete ** chain, the pressure of market competition, and the development and iteration of new products require a lot of funds.
However, Mixue Bingcheng chose to hit the IPO at this moment, which may not be a good time.
According to the current situation in the capital market, the performance of many new consumption stocks after listing is not ideal, and new consumption bubbles, including new tea drinks, are beginning to face the risk of bursting.
As of January 3, 2024, the share price of Nai Xue, which belongs to the same new tea drink track as Mixue Bingcheng, closed at 313 Hong Kong dollars, compared with last year's high has fallen by more than 6 percent, and the stock price has fallen by more than 8 percent from the early stage of listing.
It is worth noting that in January 2021, Nai Xue's tea completed a Series C financing of more than $100 million, led by Pacific Alliance Investment Group (PAG), a well-known PE institution in Asia. After this round of financing, Nai Xue's tea is valued at nearly 2 billion US dollars, or about 13 billion yuan.
However, according to the ** price on January 3, the total market value of Nai Xue's tea is only about 5 billion Hong Kong dollars, which is significantly lower than the financing valuation of the primary market before listing.
Some market analysts believe that compared with a few years ago, for the new tea industry, the environment of the secondary market has changed a lot, the macroeconomic growth in the past has been rapid, everyone is very optimistic about the future prospects, but now investors will pay more attention to the actual operating data of enterprises, confidence is not as good as before.
If the tea brand wants to increase revenue, it can force the franchised stores to expand purchases, thus forming a false performance boom. Yin Xiaofei, an analyst in the consumer industry at Galaxy **, said that because the revenue of tea brands comes from internal procurement, it is difficult for investors to know the digestion of purchased goods in stores. Once the tea brand operates in this way, it will not only damage the interests of franchisees, but also harm the long-term development of the brand, and will also damage the interests of small and medium-sized investors.
According to the analysis of the prospectus, more investors said that Mixue Bingcheng itself is a financial product, and profits are obtained by charging franchise fees and providing industrial chain services for franchisees. The risk of this model is that investors cannot accurately predict the future development of the company based on the revenue and profit of the tea brand.
While opening stores like crazy, they are closing stores in large numbers
Behind the high growth of the performance of Mixue Bingcheng is the rapid growth of the number of stores.
According to the prospectus data, at the end of 2021-2022 and the end of the first three quarters of 2023, the number of franchisee stores in Mixue Bingcheng will be 36,093 respectivelyThis means that there will be nearly 9,000 net new additions in 2022 and about 7,000 in the first three quarters of 2023.
But the embarrassing thing is that while the number of franchisee stores is increasing rapidly, the number of closed stores has also begun to increase significantly.
From 2021 to 2022 and the first three quarters of 2023, the number of franchisee stores closed by Mixue Bingcheng was 577, 696 and 856, respectively.
Among them, the number of stores required to be closed by Mixue Bingcheng was 371, 432 and 453 respectivelyThe number of stores closed by franchisees was 206, 264 and 403. The number of franchisees closing stores has increased significantly.
At the same time, the number of franchisees has also changed. From 2021 to 2022 and the first three quarters of 2023, the number of new franchisees will be 3,856, 4,559 and 3,448, while the number of franchisees will be 438, 718 and 792 in the same period.
This means that the number of new franchisees is decreasing, while the number of terminated cooperation is increasing.
For a long time, Mixue Bingcheng has taken "extreme cost performance" as its selling point, focusing on freshly made drinks of 5-10 yuan. So far, its milk tea chain "Honey Snow Bingcheng" and the popular coffee brand "Lucky Coffee" have carried out all-round rapid expansion based on the vast third- and fourth-tier cities.
Among them, the franchise model of Mixue Bingcheng plays a key role, that is, it mainly sells raw materials to franchisees and sends them to stores around the country through its own or third-party logistics warehousing. As of the first nine months of September 30, 2023, the revenue from merchandise sales accounted for more than ninety percent of its total revenue, and the revenue from equipment sales and franchise-related services accounted for respectively. 8%。
From 2021 to 2022 and in the first three quarters of 2023, Mixue Bingcheng achieved revenue of 103 respectively5.1 billion yuan, 1357.6 billion and 1539.3 billion yuan, the year-on-year growth rate was respectively. 2% and 460%；The net profit for the same period was 191.2 billion yuan, 201.3 billion and 245.3 billion yuan, with a year-on-year growth rate of . 3% and 511%。
In addition, the cash flow of Mixue Bingcheng is in good condition and the funds on the account are abundant. As of the end of November 2023, the company had cash and cash equivalents on its books of 491.6 billion yuan, compared to 276.4 billion yuan;From 2021 to 2022 and the first three quarters of 2023, the net inflow of operating cash flow was 1.7 billion yuan, 2.4 billion yuan and 3.1 billion yuan, respectively.
However, it can also be seen from the above performance data that after entering 2022, the growth rate of revenue and net profit of Mixue Bingcheng has declined significantly, and the growth bottleneck caused by the industry's involution has attracted attention.
In this regard, Mixue Bingcheng explained that it was mainly due to the impact of the epidemic on the normal operation of stores, and at the same time, in order to reduce the impact of the epidemic on franchisees, in 2022, the company lowered the ** of 69 store materials and equipment sold to franchisees, with an average price reduction of about 15%, and the sales revenue of this part of the reduced materials and equipment in 2022 accounted for 23% of the total revenue in the current period1%。
Listed in a pile, the industry involution intensified
In recent years, major new tea brands have continued to open stores in an attempt to seize more market share, and the involution of the track has become more and more intense.
According to related ** reports, waist brands Shanghai Auntie, Bawang Chaji, and Sweet Lala will all open more than 2,000+ stores in 2023.
The top brands that did not support franchises in the past have also been forced to open up franchises to seize market share.
Heytea will open franchise in 2022, and last year the brand opened more than 2,300 new franchise stores, and 65% of franchisees opened 2 or more stores;Nai Xue's tea will also open for franchise in July 2023, and at the interim earnings conference, the company's CFO Shen Hao said that "lower-tier cities will become the main market for partner stores".
Some people in the industry believe that the tea track has entered the "unbounded" stage, and various tea companies are entering their own hinterlandsWhether it's in a first-tier hotspot city, or in.
The third and fourth line sinking markets are everywhere in the world of tea enterprises.
For these new tea brands, it is crucial to get financial support as they expand their territory, and if they can go to market sooner, they can gain a competitive advantage. This has led to a number of tea brands rushing to the market since 2023.
In August last year, Chabaidao officially submitted an IPO prospectus to the Hong Kong Stock Exchange, which was exclusively sponsored by CICC. In addition to tea Baidao, brands such as Shanghai Auntie and Bawang Tea Ji have also been listed one after another.
On the same day that Mixue Bingcheng submitted its Hong Kong stock report, Gu Ming, which ranks second in the milk tea industry in terms of the number of stores and market share, also submitted a listing application to the Hong Kong stock market, and the latter was valued at 5.1 billion yuan after the introduction of Meituan Longzhu and other investors in 2020.
Jiang Han, a senior researcher at Pangu Think Tank, believes that Mixue Bingcheng and Gu Ming are both important players in the new tea industry, and their listing will further promote the development and competition of the new tea industry. In addition, this may also attract the attention and follow-up of other new tea brands, thus intensifying the competition in the industry.
It can be said that there will be new tea beverage companies listed soon, which is an indisputable fact. The future of the tea industry is full of opportunities, but it also faces many challenges. Brands not only need to maintain a keen insight in the external market competition, but also need to continue to cultivate internal skills internally to ensure that quality, innovation and service always match consumer needs. Only in this way can we gain our own place in the tea market and truly gain long-term competitiveness. Jiang Han said.
He added that the logic of each company is very simple, who can be the first to go public who can stand out among the tea companies, whether it is for the influence of the brand, or the competitiveness of the market, listing has become a choice that many companies must consider.
However, in addition to business considerations, some investors believe that in the face of increasing pressure from the market, in fact, the development of various tea companies has also given capital the idea of profit-taking and pocketing. "After all, the tea track has reached the current stage, and it is the best time for each capital to harvest the market, and the choice to urge the listing is undoubtedly a consensus formed by the capital giants. ”
It is worth noting that in order to cope with the fierce competition in the domestic market, Mixue Bingcheng regards going overseas as a new growth space.
It is understood that Mixue Bingcheng will take Southeast Asia as its key market, and opened its first overseas store in Hanoi, Vietnam in 2018. As of September 30, 2023, Mixue Bingcheng has opened about 4,000 stores in 11 overseas countries, ranking first in the Southeast Asian market in terms of the number of stores.
At the same time, in order to support the development of overseas business, Mixue Bingcheng has established a localized warehousing system in four countries in Southeast Asia, including a total of about 6The 60,000-square-meter facility has 11 self-operated warehouses and a distribution network covering about 300 cities in four overseas countries.
In fact, Mixue Bingcheng has been in a hurry to go public in recent years, which is also related to its overseas planning. A Michelle Ice City insider told **,Before 2017, Michelle's attitude was not to go public, and it began to loosen, on the one hand, listed companies are more attractive to talents, and on the other hand, to go overseas, listing is the only way.
However, whether it is based on the business considerations of increasing involution and planning to go overseas, or the intention of the capital behind it to leave the market, in the context of the declining concept of tea in the market, even if Mixue Bingcheng can break through the listing barrier with difficulty, the final result may not be satisfactory.
Reference: Caixin "Mixue Bingcheng Listed on the Hong Kong Stock Exchange, the number of stores exceeds 3."60,000 Families".
The Paper "Gross profit margin is nearly 30%!Mixue Bingcheng went public in Hong Kong: net profit increased to 2.4 billion in the first three quarters of last year
Blue Whale Finance's "Honey Snow Bingcheng and Gu Ming submitted their Hong Kong stocks on the same day, and the involution intensified and forced the new tea drinks to pile up for IPO".