Author: Big Brother, Editor: Xiao Shimei
In June 2021, Nai Xue's tea completed its IPO in Hong Kong stocks. In the following three years, the new tea drink developed rapidly and the competition intensified, but the industry did not usher in a second listed company.
Since 2024, new tea beverage companies have once again launched a listing competition, including well-known brands such as Shanghai Auntie, Gu Ming, and Mixue Bingcheng, which have started the IPO process of Hong Kong stocks.
As one of the fastest-growing new tea brands in recent years, Chabaidao's performance is outstanding and it is loved by capital, but it also hides many hidden dangers in food safety, franchise management, and chain stability, and there are still great variables in the future growth road.
[The new favorite of capital].
The new tea industry, which focuses on the consumption upgrading of young people, is undoubtedly one of the hottest tracks in recent years.
According to reports from Frost & Sullivan and other institutions, the compound growth rate of China's new tea industry from 2017 to 2022 is as high as 249%, much higher than China's soft drink industry 41% overall growth. The compound growth rate is expected to remain high at 190%, with a CAGR of nearly 25% in third-tier and lower cities.
Founded in 2008, Cha Baidao can be called a veteran player of new tea drinks, but until 2017, the company still has only 180 stores, far less than some new brands established later.
The real rise of Chabaidao was during the three-year epidemic. Taking advantage of the opportunity of the gradual breakthrough of the new tea beverage industry, with the help of social ** and online transactions, the tea Baidao, which has been accumulated in the industry for a long time, has quickly ascended.
From 2020 to 2022, the number of new stores of Chabaidao will be 1,485, 2,844 and 1,817 respectively, making it one of the fastest-growing new tea brands. As of February 18, 2024, Chabaidao has a total of 7,927 stores in China, achieving full coverage in all provinces and tier-level cities in China.
With the expansion of stores, the performance of Tea Baidao has risen.
From 2020 to 2022, the company's revenue will be 108 billion yuan, 364.4 billion yuan, 423.2 billion yuan, net profit of 2 in the same period3.8 billion yuan, 77.9 billion yuan, 96.5 billion yuan, with a compound annual growth rate of more than 95% in revenue and net profit, and the performance growth is unparalleled in the industry.
According to the recently updated prospectus, the company achieved revenue of 570.4 billion yuan, a year-on-year increase of 348%；Net profit 115.1 billion yuan, a year-on-year increase of 1927%, still maintaining a high growth rate, with a market share of 66% to 68%, ranking third in the industry, second only to Mixue Bingcheng and Gu Ming.
Tea Baidao, which stands out among many new tea brands, is one of the companies that has attracted the most attention from capital in the past two years.
In June 2023, Chabaidao opened its first public financing in more than ten years since its establishment, with a total financing amount of 9700 million yuan, which is one of the largest financing of new tea beverage enterprises in recent years. Investors include TowerQuality, Zhengxin Valley, New Hope, Tomato Capital, CICC, etc.
After the completion of this financing, the valuation of Chabaidao is as high as 18 billion yuan, which has far surpassed Naixue (the current market value is about 5 billion Hong Kong dollars).
[Growth Hidden Dangers].
From the perspective of business model, Chabaidao is a typical TOB company, and the company's real customers are actually franchisees, not consumers.
As of March 31, 2023, Chabaidao has a total of 5,591 franchisees, of which 444 franchisees have opened more than two stores.
Different from Naixue's direct sales model, Chabaidao mainly expands the store network through the franchise model, with nearly 8,000 stores, more than 99% of which are from franchise stores, and the number of direct stores is mainly for brand display and consumer experience, and the number is even less than 10.
Although the franchisee is the company's main customer, the franchise fee is not the main income of Chabaidao, and the company's largest revenue is to the franchisee ** goods and equipment.
From 2021 to 2023, the sales of tea Baidao goods and equipment will achieve a revenue of 344.7 billion, 402 billion, 54200 million, accounting for %; Royalty and franchise fee income were 15.9 billion, 17.2 billion, 23.2 billion, accounting for respectively. 1%。
The franchisee model has promoted the rapid expansion of Chabaidao, but it has put forward a new challenge to the management of the first chain, and it is not easy to ensure that all stores can standardize the operation.
Open the black cat complaint platform and search for the keyword "tea Baidao", and the number of complaints exceeded 2,000, involving "foreign bodies in the drink", "drinking tea Baidao caused gastroenteritis to seek medical treatment", "product deterioration and peculiar smell", "bad attitude of service personnel" and other issues.
Because of food safety issues, Chabaidao has been on the hot search of major platforms many times in recent years, and some stores have even been closed or included in the list of serious violations and dishonesty. Even a few days after submitting the prospectus to the Hong Kong Stock Exchange in mid-August 2023, it was revealed that a consumer in Tianjin found cockroaches in the tea Baidao drink he bought, and the topic entry once rushed to the hot search on Sina Weibo.
Food safety is the "lifeline" of new tea brands, relying on the barbaric growth brought by the franchise model, it is not easy for tea Baidao to completely eliminate food safety hazards.
[The future is uncertain].
Aside from food safety issues, Tea Baidao also faces many challenges in maintaining its current position in the increasingly competitive new tea industry.
From the perspective of brand recognition, Tea Baidao can only be regarded as a second-tier brand at present, and the first echelon of the domestic new tea market is still the top three of Naixue, Heytea, and Mixue Bingcheng. Among them, Naixue and Heytea are positioned as high-end, mainly distributed in first- and second-tier cities, mainly directly operated stores, and Mixue Bingcheng is mainly positioned in the mid-range, mainly franchised stores, and the number of stores in third-tier and below cities accounts for the largest proportion, reaching 569%。
It is also through the franchise model to achieve scale expansion, and it is also dominated by low-tier cities, but there is a big gap between Chabaidao and Mixue Bingcheng in terms of first-class chain and cost control.
About 60% of the beverage ingredients provided by Mixue Bingcheng to franchisees are self-produced, which is the highest in China's ready-made beverage industry. Due to the cost advantage brought by the self-sufficiency of raw materials, the competitiveness of Mixue Bingcheng is extremely prominent, so the coverage rate in the third and fourth tier cities is extremely high, the number of stores exceeds 30,000, and the channel scale is much larger than that of Chabaidao.
In contrast, the tea raw materials and ingredients sold by the tea Baidao to the franchise store are purchased by the company from the top merchants, of which the top 5 major merchants account for more than 40% of the purchase, the company's ability to control upstream resources is limited, and the safety of the chain has become one of the important factors restricting the development of the company.
According to the prospectus, the revenue of Mixue Bingcheng in the first three quarters of 2021, 2022 and 2023 will be 103 respectively5.1 billion yuan, 1357.6 billion yuan, 153$9.3 billion; Net profit was 19100 million yuan, 2 billion yuan, 24500 million yuan, which is more than double that of tea Baidao. As the most direct competitor, Mixue Bingcheng, which has crushing advantages in cost, chain and scale, has self-evident competitive pressure on Chabaidao.
The efforts of leading brands such as Heytea and Naixue in the sinking market have also had a great impact on Tea Baidao.
In the face of the new forces in the industry, Heytea and Naixue, which were mainly directly operated and mid-to-high-end, have also opened a franchise model in recent years, and launched low-level products to seize the market share of second-tier brands such as "Tea Baidao" in low-tier cities.
In 2023, Heytea will enter more than 150 new cities, doubling its urban coverage and opening more than 2,300 new stores, a year-on-year increase of as much as 3 times, becoming the new tea beverage brand with the fastest store growth rate that year.
Nai Xue, who has lagged behind sharply in the number of stores, has gradually put down her position to adjust her business strategy in the context of continued sluggish performance and stock price. Since 2024, Naixue has begun to significantly lower the threshold for joining, and the franchise fee has dropped from millions in the past to about 500,000. It can be expected that with super brand recognition, Naixue's stores will see a huge growth rate in 2024.
In addition to the pressure of the head enterprises, the competition of waist enterprises is also extremely fierce, and brands such as Chayan Yuese, Gu Ming, and Bawang Chaji have a very strong growth momentum in recent years, compared with the advantages of tea Baidao.
In fact, the retail sales and average sales volume of Chabaidao's stores have begun to decline in the past two years, and the growth rate of revenue and net profit has gradually slowed down.
The choice of new tea beverage enterprises to go public and raise funds at this time is not unrelated to the changes in the capital market environment.
According to the big data of Red Meal, as of the end of July 2023, a total of 18 financing events have been disclosed in the tea beverage track, with a total financing amount of more than 1.3 billion yuan, while in 2021, 30 financing events disclosed by the industry with a financing amount of more than 12.5 billion. As the primary market has become more cautious in its investment in the new tea beverage track, impacting the secondary market has become the main channel for new tea beverage enterprises to obtain capital support.
To a certain extent, the success of Tea Baidao as the "second share of new tea drinks" is related to the development of the enterprise, the profits of early capital, and the realization of the net worth of the founding major shareholders, but whether it can bring good returns to investors after listing remains to be tested by the market.
Disclaimer of Warranties
The content of this article related to listed companies is the author's personal analysis and judgment based on the information publicly disclosed by listed companies in accordance with their legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.); The information or opinions contained herein do not constitute any investment or other business advice, and Market CapWatch disclaims any liability for any actions resulting from the adoption of this article.
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