Source: Beijing Business Daily
The dust of "the second stream of new tea" has settled. On April 23, the tea brand Chabaidao was officially listed on the Hong Kong Stock Exchange, and it is the first new tea enterprise to successfully land on the Hong Kong Stock Exchange in recent three years. It can be seen from the financial report data that in the past three years, Chabaidao has shown a steady growth trend in terms of revenue, gross profit and net profit. Successful listing means that the development of Chabaidao enterprises enters the second half. If you want to continue to gain the attention of the capital market and establish market advantages, it proves that sustainable profitability is the key.
First share of franchise tea making
Eight months after submitting the form to Hong Kong Stock Exchange for the first time, Chabaidao became one of the listed companies. On April 23, Chabaidao was officially listed on the main board of Hong Kong Stock Exchange with stock code 2555.HK. At the opening of Hong Kong shares, Chabaidao fell below the issue price of HK $17.5 and suffered a break. As of the closing, the share price has dropped by more than 26% to HK $12.8, leaving only HK $18.91 billion in market value.
From the financial data, Chabaidao has handed over a good report card. The prospectus shows that from 2021 to 2023, Chabaidao's revenue will be 3.64 billion yuan, 4.23 billion yuan and 5.7 billion yuan respectively, with a compound annual growth rate of 25.1%; The gross profit of the company in the same period was 1.3 billion yuan, 1.46 billion yuan and 1.96 billion yuan, with a compound annual growth rate of 22.9% and a gross profit margin of 34.4%; The adjusted net profit is 900 million yuan, 970 million yuan and 1.26 billion yuan respectively, with the compound annual growth rate of net profit of 18.2%. The adjusted net interest rate in 2023 will reach 22%. This profitability has greatly exceeded the average level of peers.
From the perspective of income structure, the dazzling transcripts mainly come from franchisees. According to the data, from 2021 to 2023, Chabaidao's revenue from selling goods and equipment to franchisees accounted for 94.6%, 95% and 95% respectively, and the revenue in 2023 was about 5.42 billion yuan. Chabaidao said that its revenue mainly comes from the sales of goods and equipment to Chabaidao franchise stores, royalties and franchise fees, design services of Chabaidao stores, online operation and management services of takeout platforms, etc.
In terms of store size, Tea 100 is the "veteran" of the new tea industry. In 2008, the first Chabaidao was established in Chengdu. After 16 years, as of April 5, 2024, the number of Chabaidao stores has reached 8016, covering 31 provinces and cities in China.
According to the retail sales in 2023, the share of Chabaidao in China's current tea beverage market will reach 6.8%, ranking third. In 2023, Tea 100 stores will sell a total of 1016 million cups of milk tea, with a total retail sales of about 16.9 billion yuan.
Supply chain becomes the key to competition in the second half
After more than two years, the tea industry has ushered in the "second share of new tea drinks", and tea is the successor Naixue's Tea After that, the first new tea enterprise successfully landed on the Hong Kong Stock Exchange was also the "first franchise tea company" landing on the Hong Kong Stock Exchange.
Indeed, its joining mode is the key to rapid business growth and success. For the huge franchise system, Chabaidao has been working hard on the profit model, supply chain and supervision system.
From the perspective of store mode, Chabaidao has chosen the small store mode and delivery business with more cost advantages. Among the hundreds of tea stores, 44.3% of them have an area of 30-49 square meters, and 42.8% of them have an area of 50-100 square meters. To be specific, the small store model can save store costs to a large extent, with low rent, decoration, personnel costs and other expenses. At the same time, it can support takeout business and window self lifting, and improve operating efficiency.
However, it is far from enough to support nearly 10000 stores only by the small store model, and a stable franchisee system is the key. Chabaidao has 16 training centers nationwide. The training center not only provides continuous training for franchisees and their employees, but also helps new franchisees through old franchisees, provides online operation and continuous operation support, and improves the operation efficiency of stores through the digital system. At the same time, Chabaidao has set up a regional supervision team composed of about 570 people nationwide. From 2021 to 2023, Chabaidao achieved a store closing rate far lower than the industry average.
At the same time, supply chain construction has become the key to the second half of the competition of the new tea track. And Chabaidao aims at the layout of the origin in the supply chain. By 2023, Chabaidao has directly signed purchase agreements with fruit producing areas across the country for some core fruit raw materials, such as peach, Tainong mango, summer black grape, etc., and strengthened cooperation with leading suppliers around dairy products, tea, frozen fresh juice and other core raw materials, so as to lock in high-quality production areas and supply of upstream raw materials.
In addition, Chabaidao also disclosed in its prospectus that it has a factory "Senmian Factory" in Chengdu, Sichuan Province, which produces new environmental protection materials and packaging materials, with a total area of more than 10000 square meters, and will be put into production in 2021. The capacity of the factory will reach 13952 tons in 2023. The biodegradable straws, packaging bags and other environmental protection packaging materials produced by the factory can not only be used by Chabaidao's own products, but also supply external procurement needs.
An investor in the consumer industry said that Chabaidao has achieved rapid expansion through the franchise mode, and the number of its stores has achieved significant growth in recent years. This mode helps Chabaidao to quickly occupy the market, and the sale of raw materials, machinery, etc. also becomes the main source of income. However, the profitability of Chabaidao depends to some extent on its cost control and pricing strategy. From the data, both gross profit rate and net profit rate remain at a high level. Next, continuous optimization of its cost control and pricing strategy is still the top priority to ensure the continued stability of profitability.
Chinese food Zhu Danpeng, an industry analyst, said that the competition of the new tea track gradually entered the second half, and the top players had reached the point where they needed to compete with each other in the basic skills of the supply chain. However, there is no shortcut for the construction of supply chain capacity, which requires the brand to pay enough attention from a strategic perspective and invest in real money to lay a solid foundation bit by bit.
Maintain good profitability
In recent years, the new tea market continues to heat up, attracting many brands, and the crowding of the track is obvious. Each brand competed for market share through different strategies, from price war, co branding to roll health, the tea track entering the second half can be described as a hundred schools of thought contending. In this context, the successful listing of Chabaidao undoubtedly brings new challenges and opportunities to the whole industry.
In the opinion of Bai Wenxi, vice chairman of China Enterprise Capital Alliance, the listing of Chabaidao not only highlights the development space of the new tea market, but also reflects the capital market's favor of the new tea industry. For the brand itself, this listing has enhanced the brand influence and set a benchmark for the whole new tea industry. However, in the face of the intensification of market competition, the increase of consumers' attention to healthy diet and the pressure and expectation of the capital market after the listing of Chabaidao, it is also necessary to maintain keen market insight and innovation ability, and maintain good financial status and profitability.
As for the purpose of the raised funds, in the hearing materials, it was also clearly stated that it would mainly be used to improve the overall operating capacity and strengthen the supply chain; Develop digital capabilities and hire professionals; Brand building and promotion activities; Promote self operated coffee brands, product development and innovation. Specifically, in terms of promoting self operated coffee brands, Chabaidao said that it plans to open 15 "coffee grey" coffee shops in the next three years. The coffee brands will adopt two modes of direct marketing and franchise, including large coffee shops with an area of more than 50 square meters and small coffee shops with an area of less than 50 square meters for fast food pickup and takeaway.
In this regard, Jiang Han, a senior researcher of Pangu Think Tank, said that the financing strategy of Chabaidao is targeted. Improving the overall operation capability and strengthening the supply chain are the basis for the sustainable development of any catering enterprise. Relying on this, Chabaidao can ensure product quality, improve service efficiency, and maintain its advantages in the fierce market competition. At the same time, digitalization can not only improve operational efficiency, but also better analyze consumer behavior, optimize market strategies, develop digital capabilities and hire professionals, which is an inevitable choice to adapt to modern business trends. In addition, Chabaidao's efforts to promote its own coffee brand, product development and innovation will help it expand new growth points.
Jiang Han believes that the competition in the tea market is becoming increasingly fierce. If Chabaidao wants to enhance its profitability, the key is to continuously improve product quality and service experience. The brand needs to pay close attention to consumer demand and feedback, continue to optimize the product taste and innovate the drink style, so as to improve the repurchase rate and public praise, and then promote sales growth. At the same time, Chabaidao can promote its brand through online social media, offline activities and other channels to enhance brand awareness and reputation. In addition, Chabaidao can consider cooperating with e-commerce platforms and carrying out takeout business to expand its sales channels and partners and further expand its sales scope and market share. Exploring new product lines or entering relevant fields to realize diversified operation will also help reduce business risks.
Beijing Business Daily reporter Guo Binlu Zhang Tianyuan
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