Picture worm creativity.
Blue Whale financial reporter Zhang Jinglun.
On February 14, Shanghai Auntie (Shanghai) Industrial Co., Ltd. *** hereinafter referred to as "Shanghai Auntie") submitted a listing application to the Hong Kong Stock Exchange, and the joint sponsors were CITIC**, Haitong International and Orient Securities International.
Shanghai Auntie has also become another new tea brand that has launched a sprint to Hong Kong stocks after Tea Baidao, Gu Ming, and Mixue Bingcheng. Nearly three years after Nai Xue's tea was listed, the competition for the "second share of tea" in Hong Kong stocks has also entered the most fierce window period.
Shanghai Auntie revealed that the financing will be mainly used to improve digital capabilities, including upgrading digital infrastructure and upgrading store systems; upgrade the franchisee platform; Enhance the ability of the first chain; Expand the store network, enhance the brand image, etc.
Franchise-based
Shanghai Auntie was founded in 2013 and started with "freshly brewed grain tea". With the continuous development of the brand and the demand of Gen Z consumers for healthy and refreshing tea, in May 2021, Shanghai Auntie fully upgraded to a new "fresh fruit tea" strategy.
At first, the development of Shanghai Auntie was not fast, from 2013 to 2019, it exceeded 1,000 stores in 6 years. Since 2020, it has started "contrarian expansion", and as of September 30, 2023, the number of its stores has reached 7,297, of which 993% are operated by franchisees.
As of September 30, 2023, Shanghai Auntie is the largest medium-priced freshly made tea shop brand in northern China and the third largest medium-priced freshly made tea shop brand in China in terms of the number of stores in the whole system, according to the CIC Consulting report cited in the prospectus of Shanghai Auntie.
Behind the rapid development is inseparable from the promotion of capital. Tianyancha APP shows that Shanghai Auntie has completed 4 rounds of financing, of which in November 2020, it received nearly 100 million yuan in Series A financing from Jiayu Capital; In June 2021, it received nearly 100 million yuan in Series A+ financing from Jiayu Capital. On August 9, 2023, Shanghai Auntie completed the B round of strategic financing, with investors including Zhiyi Investment, Jiayu Capital and other institutions, with a transaction amount of 2300 million RMB. On February 14, 2024, Aunt Shanghai won another 12.2 billion financing, the investor was not disclosed.
In terms of financial data, for the whole year and the first nine months of 2023, the operating income of Shanghai Auntie was 164 billion yuan, 219.9 billion yuan, 253.5 billion yuan, the corresponding net profit was 08.3 billion yuan, 14.9 billion yuan, 3$2.4 billion.
As of the first nine months of 2023, the vast majority of Shanghai Auntie's revenue comes from franchise business, mainly including sales of goods and franchise services, accounting for 961%。In the same period, the sales revenue of store materials and equipment sold by Mixue Bingcheng to franchisees accounted for about 98%, and the same business revenue of Gu Ming and Tea Baidao accounted for 80% and 95% respectively.
Although the sales of Shanghai Auntie are good, compared with competitors at the same level, the indicators are not outstanding. Gu Ming, which is in the same reporting period as the Shanghai Auntie prospectus, achieved 557.1 billion yuan in revenue, net profit of 104.5 billion yuan, and the number of stores reached 8,578. In other words, in the case of a difference of 1,281 stores, Gu Ming's revenue scale can be more than 2 times that of Shanghai Auntie, and the net profit can be more than 3 times. Another tea drink brand, Mixue Bingcheng, has a revenue of 15.4 billion yuan in the first nine months of 2023, with more than 36,000 stores, 5 times the number of stores and 6 times that of Shanghai Auntie.
Focus on the sinking market
From the point of view, Shanghai Auntie belongs to the second echelon, and the product is in the range of 7-22 yuan, and tea Baidao and ancient tea belong to this ** belt.
Compared with the urban layout of the three brands of Tea Baidao, Gu Ming and Shanghai Auntie, Tea Baidao is more focused on new first-tier and second-tier cities, while Gu Ming and Shanghai Auntie pay more attention to sinking. According to the data, as of the end of March 2023, the number of stores in third-tier and below cities accounted for 394%。As of the end of September 2023, there are about 490% of stores are located in third-tier cities and below. As of the end of 2023, the number of stores in third-tier cities and below accounted for 49%.
is also deeply involved in the sinking market, but Gu Ming and Shanghai Auntie have gone to different regions. Aunt Shanghai is stronger in the north. According to the prospectus, the number of Shanghai Auntie's stores in northern China has reached 3,752, and brands A and B have about one store in the north. According to the prospectus of Gu Ming, it prefers to implement regional encryption strategies in Zhejiang, Fujian, Jiangxi and other places near the base camp, and even until now, Gu Ming has not entered the two first-tier cities of Beijing and Shanghai.
It is worth mentioning that among all tiers of cities in China, the compound growth rate of GMV of ready-made tea shops in third-tier cities and below will reach 25 between 2022 and 2027At the same time, it is expected that the GMV of the ready-made tea shop market in China's third-tier and below cities will reach 227.2 billion yuan in 2027, and it is expected to become the fastest-growing segment in China's ready-made tea shop market.
In the future, she said that she plans to continue to expand her business, leverage her successful experience to further cultivate the current market in various parts of China, and expand her business to more third-tier cities and below.
High growth of mid-priced freshly made tea
At the industry level, according to CIC, the total market size of China's ready-made tea shops was RMB168 billion in 2022 and is expected to grow to RMB451.3 billion by 2027, with a compound annual growth rate of about 219%。Among them, the average selling price of 10-20 yuan in the middle price of tea shops has the largest share, reaching 515%。It is expected to grow at a CAGR of 231%。
In order to meet the diversified needs of consumers for different categories and different price points, Shanghai Auntie has made some adjustments and launched the "Shanghai Auntie Light Edition" in 2023, which is a store model designed for consumers in third-tier cities and below. Compared with the general Shanghai aunt, the price of the light version is 2-12 yuan, which is close to Mixue Bingcheng, the store type is smaller and the store location is more flexible. According to the prospectus, it is planned to upgrade the store model in the future and further enter county-level cities.
In addition, Shanghai Auntie is also trying to enter the coffee market and seek new growth points. In 2022, Shanghai Auntie launched the coffee brand "Shanghai Coffee", which adopts a "shop-in-shop" model, usually embedded in Shanghai Auntie's milk tea shop, with a total of 1,964 Shanghai coffee at the end of the reporting period, 780,000 orders in the first nine months of 2023, and 2 orders for all brands700 million, which can only be counted as a fraction. In the future strategy, Huca's plan is still to expand mainly through the existing Shanghai Auntie stores.
In addition, Shanghai Auntie continues to promote product innovation. According to the prospectus, almost every year, Shanghai Auntie will launch more than 100 new products. However, whether this average of 100 new products per year will help Shanghai Auntie establish a greater brand voice is worth putting a question mark. From products to marketing methods, the innovation of chain milk tea brands has been very intense. Competition in the number of new products alone cannot really win over the mouthful of consumers.
For the listing prospects of Shanghai Auntie, Zhu Danpeng, an analyst of China's food industry, said that the overall development of Shanghai Auntie is decent, with a certain brand effect and scale effect, but with the serious involution of the industry and the intensification of homogenization, Shanghai Auntie will take the road of IPO to enhance its competitiveness, but the problem is not necessarily immediate success. Shanghai Auntie needs to accelerate product iteration and create more new highlights to differentiate itself in the fierce competition for new tea drinks in the future.