Economic Observer reporter Lao Yingying"Tea mother small green mandarin 12 gift box, people can't put down the tea mother little green orange, this year's gift box bag is more pleasing and more pleasing, the gift is very decent, self-drinking and real! Before the Spring Festival, Ms. Li has been busy with the inquiry and packaging and delivery of various Spring Festival tea gifts in the e-commerce center and logistics industrial park of her own tea brand. She told the Economic Observer that this year's demand for tea is greater than in previous years, and some regular customers have booked tea ceremonies for the Spring Festival two months in advance.
The reporter saw in Miss Li's circle of friends that these tea ceremonies include ripe tea and raw tea, and some tea processes use old trees as the main raw material, and a certain proportion of ancient trees are transferred in, and the prices are 288 yuan sets, 368 yuan cakes, 688 yuan boxes, 880 yuan boxes, 1680 yuan sets and 1880 yuan sets. Before and after the Spring Festival, the performance growth of some tea stores increased by more than 100% year-on-year, high orders were frequent, and many categories such as oolong tea and black tea became popular categories with monthly sales exceeding 100 million yuan during the Spring Festival.
Zhu Danpeng, an analyst of China's food industry, told the Economic Observer that one of the attributes of tea itself is gift-giving, so it has always been very "profitable", and the traditional tea industry belongs to a high gross profit industry, but many domestic tea brands have not yet entered a standardized, specialized, branded, capitalized and large-scale stage, and it is very difficult to achieve IPO listing in China.
Although tea companies have been applying for A-share IPOs for many years, there are still no listed tea companies in A-shares. Zhu Danpeng believes that with the successful listing of Lancang Ancient Tea on the Hong Kong Stock Exchange on December 22, 2023, "more and more tea companies should choose to list on the Hong Kong stock market in the future."
It is "difficult" for tea companies to go public
The battle for the "first share of tea" has been staged for more than ten years.
In June 2012, Anxi Tieguanyin submitted a prospectus to the Shenzhen Stock Exchange, but in December of the same year, Anxi Tieguanyin withdrew its listing application. In the following years, Huangshan Xie Yuda Tea, Anxi Huaxiangyuan, Colorful Yunnan and other tea companies tried to land on the main board of A-shares, but unfortunately none of them succeeded. Previously, there were only two companies in Hong Kong, Tianfu and Longrun Tea. Among them, Longrun Tea has been suspended since June 2017 and its listing status was cancelled by the Hong Kong Stock Exchange in 2021.
Since 2020, another wave of tea companies has risen, including China Tea, Lancang Ancient Tea, Bama Tea, etc., which have begun to compete for the "first share of A-share tea enterprises", but so far there are still no listed tea companies in the A** field.
In June 2020, China Tea submitted its prospectus for the first time, and in March 2021, China Tea disclosed its prospectus for the second time. In February 2023, China Tea submitted its prospectus for the third time, but there has been no follow-up progress so far.
Similarly, as early as 2013, Bama Tea sought to be listed on the small and medium-sized board of the Shenzhen Stock Exchange, but was unsuccessful. In 2015, Bama Tea Industry was listed in the first place, and the listing was terminated in 2018; In July 2019, it restarted its listing plan and applied for an IPO on the Growth Enterprise Market of the Shenzhen Stock Exchange in April 2021. In May 2022, Bama Tea terminated its GEM IPO application and moved to the ** main board in September of the same year. On September 28, 2023, the Shenzhen Stock Exchange disclosed that the IPO review status of the main board of Bama Tea Industry was changed to "terminated".
On July 3, 2020, Lancang Ancient Tea disclosed its prospectus for the first time, seeking to be listed on the main board of the Shenzhen Stock Exchange, and updated it again on December 16 of the same year. On May 31, 2021, Lancang Ancient Tea appeared in the list of enterprises applying for termination of review for initial public offerings** in 2021. Nearly a year after the withdrawal of materials, Lancang Ancient Tea was transferred to the Hong Kong stock IPO. On December 22, 2023, Lancang Ancient Tea was officially listed on the Hong Kong Stock Exchange, becoming the "first share" of Pu'er tea.
According to public information, on January 25, 2024, Fujian Mindong Black Tea Industry Technology Co., Ltd. went public to list in the United States and obtained the filing notice from the Securities Regulatory Commission. The company submitted a prospectus to the US SEC in October 2023 and filed with the China Securities Regulatory Commission in November 2023. The company had submitted a prospectus for listing on the main board of the Hong Kong Stock Exchange to the Hong Kong Stock Exchange in 2021, but there was no result.
Why gross profit margins vary so much
Why has the listing process of tea companies been so bumpy?
Zhu Danpeng told the Economic Observer reporter that the traditional tea industry belongs to a high gross profit industry, although it is said that there is no problem with its overall profits, but from the entire purchase, sales and inventory, internal audit financial data, tax payment and other operations are not standardized, many domestic tea brands have not yet entered a standardized, professional, branded, capitalized and large-scale stage, want to be listed in China, basically it is very difficult, all need to be constantly adjusted to meet the needs of listing.
The reporter checked the prospectus of the three leading tea companies in China and found that their gross profit margins were as high as more than 40%. Among them, the prospectus of Lancang Ancient Tea shows that from 2020 to 2022, the gross profit margin of Lancang Ancient Tea's main business is as high as more than 60%; From 2019 to the first half of 2022, the comprehensive gross profit margin of China's main tea business was ., respectively96% and 4236%；From 2019 to January to September 2022, the gross profit margin of Bama Tea's main business was72% and 5345%。
Zhu Danpeng told reporters that tea belongs to the primary industry from planting to production, the processing of tea into finished tea that can be directly drunk by people belongs to the secondary industry, and the consumption of tea service industry belongs to the tertiary industry. Among the three major tea industries, the primary industry does not make money, and the secondary industry makes very little money. The key is the tertiary industry, that is, the stage when brands, channels and terminals process and package the tea industry to customers after the tea industry is processed and packaged, and there is a high gross profit, which is the specific manifestation of tea brand power.
At the same time, the reporter also found that Lancang Ancient Tea has the least revenue and net profit among the three leading tea companies, but the gross profit margin is the highest; China has the best tea revenue and profit, but the lowest gross profit margin. Among them, from 2019 to the first half of 2022, China's tea operating income was about 163.4 billion yuan, 189.3 billion yuan, 24$3.4 billion and $14$2.3 billion; The net profit attributable to the parent company was about 16.6 billion yuan, 23.9 billion yuan, 2$8.4 billion and $1$9.8 billion; From 2019 to the first three quarters of 2022, the revenue of the Eight Horse Tea Industry was 102.3 billion yuan, 126.6 billion yuan, 174.4 billion and 140.6 billion yuan, net profit was 9,087610,000 yuan, 11.6 billion yuan, 16.2 billion and 1$4.4 billion; In 2020, 2021, 2022, 2022 and the first half of 2023, the revenue of Lancang Ancient Tea was 40.5 billion yuan, 55.8 billion yuan, 46.3 billion yuan, 2$2.3 billion and $23.2 billion yuan, net profit was 12.3 billion yuan, 1$2.9 billion, $70 million, $30 million and $23 million.
Bama Tea Industry stated in the prospectus that the gross profit margin of Lancang Ancient Tea is higher than that of Bama Tea Industry because the main product of Lancang Ancient Tea is Pu'er tea, and the product line structure is quite different from that of Bama Tea Industry. At the same time, the gross profit margin of China's tea is lower than that of the Bama tea industry, which is mainly due to the fact that the product structure of China's tea is quite different from that of the Bama tea industry, and part of the income is the raw material tea business with low gross profit margin. In addition, China's tea sales channels are also quite different from the Eight Horse Tea Industry, and its main sales channels are "traditional channels", that is, dealers purchase Chinese tea products from the Chinese tea system and resell them through wholesale or wholesale and retail sales. That is to say, under the "traditional channel" model, channel providers at all levels need to obtain reasonable profit margins, and the gross profit margin enjoyed by Chinese tea is relatively small.
Plain teas and blended teas
In the tea industry, tea brands like to create "mountain tea", "vintage tea" and other high-quality varieties. For example, the Eight Horse Tea Industry Xinji series products focus on "Shantou Tea", "Vintage Tea" and other relatively high-value Pu'er tea, after the launch of this series of products, the sales revenue and sales growth of high-end products in the Eight Horse Tea Industry in 2019 increased significantly year-on-year.
Eight Horse Tea Industry introduced in the prospectus that the scarcity of Shantou tea tea resources, the tea trees in specific production areas have a unique ecological environment, and the unique geographical environment of specific production areas has created a unique aroma and quality of tea, with relatively higher product value. Since 2019, the company has been selling some of the reserved Pu'er tea products in the form of "vintage tea", and has moderately increased its terminal retail ** every year according to market conditions.
In addition to the Eight Horse Tea Industry, Lancang Ancient Tea also has an ancient tree ripe tea product called the Ugin series. Since 2009, a new product has been launched every four years, according to the reporter's understanding, the product has increased from 600 yuan a brick in 2009 to 3500 yuan a brick today.
However, according to the reporter's understanding, there are still many opaque places in the price of these so-called famous mountain and vintage teas. In Zhu Danpeng's view, all the famous mountains and famous teas now, it can't be said that they are not genuine, but it is difficult to say that they are not worthy of it. The blending of tea mountains, production areas, and vintage tea blends are different, but they are very different and opaque.
Whether it is from a famous mountain or village, old tea customers or industry people can drink it as soon as they drink it. A senior tea industry person in South China told reporters.
According to the reporter's understanding, tea is divided into pure tea and blended tea, the former often comes from a single mountain or park of tea, while the latter is from a number of mountains or parks respectively extract a certain proportion of tea processing, and tea brands usually claim that the blended tea comes from the mountains or parks are from famous mountains and villages.
For these two types of tea, different tea people have different introductions to this, and they are not even sure which statement can be believed. At a tea exhibition held in Guangzhou in December 2023, some people in the tea industry told reporters that pure tea is not blended and is a scarce variety, so it will be more expensive than blended tea. Since then, another person in the tea industry told reporters that the mainstream of the market is still blended tea, each hill and park has its own advantages and disadvantages, blended tea can learn from each other's strengths, and the taste of soaking out will have surprises, and the taste of pure tea is too single.
When Lancang Ancient Tea applied for A-share listing, the China Securities Regulatory Commission (CSRC) raised questions and asked Lancang Ancient Tea to explain the business process, production process, production cycle, etc. of blended tea, and at the same time explain the specific basis for determining the cost of different quality tea and blended tea, and the method of collecting, distributing and carrying forward various costs and expenses.