Text |Jin Wei.
Tea giants have been involved in the capital market.
On February 23, Sichuan Baicha Baidao Industrial Co., Ltd. (hereinafter referred to as Chabaidao) updated its IPO prospectus and continued to promote the listing process on the main board of the Hong Kong Stock Exchange, with CICC as the sole sponsor.
In August 2023, Chabaidao submitted a listing application to the Hong Kong Stock Exchange, according to the Hong Kong stock listing rules, the prospectus is valid for 6 months, and enterprises need to update the financial statements and other data in the prospectus in a timely manner, and if they do not update, they will face invalidation.
This time, Chabaidao stepped on the time node to update the prospectus, which shows that it does not want to lose the opportunity to sprint to IPO. Judging from the 2023 data disclosed in its prospectus, the company's revenue will reach 5.7 billion in 2023, the net profit will reach 1.1 billion, and the number of stores will increase significantly to 7,800, however, the profit of a single store is declining.
Tea Baidao opened its first store in 2008, and the expansion rate was very slow in the first few years, until the number of stores exceeded 100 after 8 years, and then, Tea Baidao began to change its past business strategy, and completely opened the franchise channel in 2018, coupled with the efforts of takeaway business in recent years, the scale of the store has rushed to the forefront of the industry within a few years.
As of the latest practicable date, Chabaidao has a total of 7,927 stores in China, covering 31 provinces and cities across the country, achieving full coverage of all provinces and tier-level cities. In 2023, the total retail sales of Chabaidao stores will reach about RMB 16.9 billion, with a total of 101.6 billion cups of milk tea.
According to Frost & Sullivan's report, in terms of retail sales in 2023, Tea Baidao ranks third in China's ready-made tea shop market, with a market share of 68%。
By the end of 2023, a total of 7,801 stores have been opened, of which 7,795 are franchised stores, more than 99% of which are franchised stores. At present, the company has 5,538 franchisees, of which 595 franchisees operate more than two stores.
In terms of expansion speed, Chabaidao is somewhat staggering, with 5,077 stores in 2021, 6,361 in 2022, and 7,801 in 2023, an increase of 2,724 stores in two years.
Like enterprises that rely on the franchise model, the main operating income of Chabaidao comes from the sale of goods and equipment to franchise stores, and the collection of royalties and franchise fees from franchisees, etc., which accounted for % of total revenue in the past three years.
In terms of financial data, in the past 2021, 2022 and 2023, the operating income of Chabaidao was 364.4 billion, 423.2 billion and 570.4 billion, the company's net profit in the same period was 77.9 billion, 96.5 billion and 115.1 billion yuan. In addition, the company's gross profit margin for the same period was: 4% and 344%。
Relying on the expansion of franchise stores, the net profit of Chabaidao revenue has increased, but the profitability of the store is declining.
In 2023, the average retail sales per store of Chabaidao will be 23880,000, with an average daily retail sales of 6,887 per store2 yuan, the average sales volume of each store is 14350,000 cups.
Compared with 2021 and 2022, the average retail sales of stores, average daily retail sales, and average sales volume have all declined. Taking 2021 as an example, the average retail sales per store of Chabaidao was 27280,000 yuan, with an average daily retail sales of 7,414 per store1 yuan, the average sales volume of each store is 16320,000 cups, with retail sales and average sales in stores falling by more than 12% in two years.
In addition, Chabaidao also provided another data comparison, the average daily retail sales of stores opened in 2021 and before reached 7,414 yuan, while the average daily retail sales of stores opened in 2023 were only 5,984 yuan.
It is worth mentioning that Chabaidao is currently cooperating with two major food delivery platforms, Meituan and Ele.me. In 2023, the total retail sales generated by Chabaidao through the takeaway platform will reach 10 billion yuan, with a total sales volume of 56.9 billion cups. The brand's total retail sales last year were 16.9 billion yuan, with a total retail volume of 79.4 billion cups, with an average per cup** rising to 1678 yuan.
At present, the market in China's freshly made tea shops is highly competitive. According to Frost & Sullivan's report, in 2023, China is now.
The market size of the tea shop market is RMB247.3 billion, with the top five players accounting for approximately 40% of the market share in terms of retail sales.
As the tea market has entered the competition from the increment to the stock, the market is becoming more and more volatile, and the tea beverage industry has been "rolled to the extreme" from the volume of **, volume marketing, to the volume of stores, volume raw materials, and volume of the volume.
From the point of view, the tea market is mainly divided into ** freshly made tea shops above 20 yuan, 10 yuan to 20 yuan of public freshly made tea shops, and 10 yuan and below the affordable freshly made tea shops.
According to the prospectus of Tea Baidao, the best-selling classic tea drinks mainly include Yangzhi nectar, soy milk jade unicorn, signature taro round milk tea, jasmine milk green and watermelon Bobo. During the Track Record Period, the list price of classic teas on the menu was between 6$0 to $22$0. As of December 31, 2023, the average selling price of its classic tea was RMB13$9.
In various price segments of tea drinks, there are many major giants, such as Hey Tea and Nai Xue, which occupy the high-end market; Mixue Bingcheng firmly grasps the sinking market with the advantages of first-class, scale and first-chain chain; The tea Baidao is in the middle of the most crowded market, and the opponents include new and old brands such as Gu Ming, Bawang Tea Ji and Shanghai Auntie, and Chayan Yuese.
According to the "Ranking and Market Share of the Top 5 Players in China's Ready-made Tea Shop Market by Retail Sales in 2023", Mixue Bingcheng is currently the largest chain tea brand in China, with more than 30,000 stores, followed by Gu Ming, with 9,000 stores; the third is Chabaidao, with 7,801 stores by the end of 2023; the fourth is the Shanghai Auntie, whose scale and quantity are similar to those of Tea Baidao; The fifth is Shuyi Burning Fairy Grass, with 7,000 stores.
In the prospectus, Chabaidao said that we are increasingly competitive with other leading players in all aspects of our business, including product innovation, product quality, customer experience, and customer acquisition and retention. "Due to the increasing number of ready-made tea shop brands and the product differentiation of these brands in key aspects such as product ** and ** level, the competition may become increasingly fierce in the future. Freshly made tea shops of different brands may be located in adjacent areas, which also leads to more fierce competition. ”
At present, the expansion of tea beverage enterprises is basically similar, in the scale of store opening multi-pronged, on the one hand, in mature areas to increase the density of stores, on the other hand, to strengthen the coverage of the sinking market blank areas, and at the same time hope to go overseas.
Since the first submission of the prospectus in August 2023, there have been two changes that are noteworthy.
First of all, Chabaidao disclosed its overseas progress and follow-up planning, and its first overseas store has landed in Seoul, South Korea in January, and will enhance the ability of overseas ** chain in the future. Cha Baidao plans to start establishing a first-chain system covering Southeast Asian markets such as Thailand, Vietnam and Malaysia this year, and plans to start setting up a distribution center in 2025 to support expansion in the Southeast Asian market.
According to a report by Frost & Sullivan, the market size of ready-made tea shops in Southeast Asia will be 32.9 billion yuan in 2023 and is expected to increase to 78.3 billion yuan in 2028.
With the expansion of scale, Chabaidao has been optimizing the intelligent warehousing and logistics system, the first chain middle platform system, food safety traceability system, etc., the prospectus shows: at present, Chabaidao has established 21 high-standard warehouses, with a total construction area of about 80,000 square meters of storage facilities. In the logistics sector, it has established the logistics storage and distribution capacity of the vast majority of stores across the country with a distribution frequency of two times a week or more.
For this IPO, Chabaidao also proposed to continue to use the raised funds to improve the overall operational capacity and strengthen the ** chain; For product development and innovation, including recruitment, training and retention of in-house R&D personnel, and the establishment of an R&D centre at the headquarters equipped with advanced software and hardware to streamline and optimize product development work; For branding and promotional activities.
At present, the top four tea brands in the total number of stores in China are Mixue Bingcheng, Gu Ming, Tea Baidao, and Shanghai Auntie, and the four have submitted prospectuses on the Hong Kong Stock Exchange.
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