It broke on the first day of listing, with a market value of HK $6.95 billion evaporated, and the second share of new tea drinks was not easy to sell.
do person | Ye Danxuan
source |Leopard metamorphosis
The second stream of new tea appeared.
On April 23, Chabaidao was officially listed on the main board of Hong Kong Stock Exchange, becoming the second tea brand listed after Naixue, and the largest IPO of Hong Kong Stock Exchange this year. Different from Naixue's tea, "the first new tea drink", Chabaidao has adopted the franchise system since the beginning of the brand's success. In the fierce new tea listing track, Chabaidao is the first new tea brand that focuses on franchise system.
Before that, there had been a lot of speculation about the breaking of the Tea Way. The issue price of Chabaidao is HK $17.5 per share. Based on the issue price and the issued share capital, the market value of the issue is about HK $25.86 billion. One minute after the opening on April 23, the decline was more than 30%, and the market value rapidly shrank. According to the documents of the Hong Kong Stock Exchange, 100000 shares were awarded. According to the closing price, the shareholder lost 470000 Hong Kong dollars per day.
Judging from the market response, the crisis behind the break is not just about Chabaidao, but also about other new tea brands queuing up for IPO.
When listed, the franchisee is the most worried
Compared with the cheerful bell ringing photos of the founder, the atmosphere in the exchange group of Tea 100 franchisees where Liu Yi is located is tense.
A local franchisee was the first to send the news link of listing to the group, and a few people in the group replied "rose", "applause" and other congratulations. Another franchisee who is looking for the transfer of stores poured cold water: "What does listing have to do with us? It's Lao Wang (Wang Xiaokun, founder of Tea 100) and investors who make money. We can't even drink soup."
There are many franchisees seeking to close or transfer their stores. Liu Yi said that the first time when the news of peers' store closure was frequently heard, probably in the middle of 2023, "the reason is that the price of raw materials is high, we can't afford the preferential activities, and we won't do it at a loss." Then in August 2023, Chabaidao submitted its prospectus at the Hong Kong Stock Exchange for the first time. At that time, Chabaidao announced in its prospectus that it would become the third largest instant tea company in China, accounting for 6.8% of the market share.
In the prospectus, the financial data disclosed by Chabaidao is quite optimistic. From 2021 to 2023, the company's revenue increased from 3.644 billion yuan to 5.706 billion yuan, and its net profit increased from 776 million yuan to 1.151 billion yuan. The operating cash flow was positive for four consecutive years.
From the perspective of profitability, Chabaidao can also be called "making money with dull voice". The sinking giant Mixue Ice City occupies 44% of the market share of China's freshly made tea drinks, and its ability to attract money is well known. However, from the gross profit rate of public data, the gross profit rate of Mixue Ice City is only 29.7%, while the gross profit rate of Chabaidao is unprecedented among the new tea drinks of IPO, as high as 34.4%.
However, the profit of the Snow City comes from the huge and perfect supply chain system and the cost advantage of raw materials brought by this system. In other words, the secret of making money in the Snow City is only four words, small profits but quick turnover. However, Chabaidao, whose gross profit rate is as high as 34.4%, has lagged behind several other IPO players in the same period in the self built supply chain, although it also took the road of joining.
Chabaidao mentioned in the prospectus that the company cooperates with 333 suppliers, in addition to 124 suppliers. In other words, so far, the raw material supply of Chabaidao still relies on the third party.
A veteran multi store franchisee in the tea industry revealed that, from the perspective of a single store, the gross profit rate of the franchisees in the tea industry is the lowest among the competing products. "As far as I know, the average gross profit rate of Guming is 40%, and that of Yihetang can go up to about 45%. However, while Chabaidao restricts franchisees from picking fresh fruits and other raw materials, its supply chain construction is relatively backward, which leads to the fact that the cost of raw materials for franchisees is much higher than that of peers."
A tea franchisee in the central province told Panther Change that subsidies and promotions are often in the price band of 9.9 yuan, so as to compete with other brands. However, the material cost of a cup of fresh fruit tea is up to more than 7 yuan, and the cost of a cup of fresh fruit tea is more than 10 yuan, making it difficult to make profits.
This has also been confirmed by other franchisees. A Sichuan franchisee said that because it is adjacent to the headquarters, the supervisor has great restrictions on the outsourcing of raw materials for Sichuan franchisees. Another franchisee in the eastern province confirmed that, even though the restrictions on foreign procurement of the headquarters were slightly looser than those in Sichuan, it was difficult for the franchisee to make profits by outsourcing fresh fruits and other raw materials. To reduce the procurement cost, it still depended on the scale effect of the company. "Outsourcing can only say (we) solve the urgent problems in the peak season of some fruits."
Chabaidao also realized the crisis of the supply chain , not only repeatedly stated in the prospectus that the main purpose of the funds raised by listing is to strengthen the supply chain, but also emphasized that the funds will be used for upstream construction such as intelligent production and processing bases and supply chain bases after initial financing.
However, compared with peers, the construction of Chabaidao's supply chain is somewhat late. As early as 2012, the Snow City has begun to build its own factories. At present, it has production bases in five provinces, including Henan, Guangxi and Anhui.
The supply chain construction of Guming also started very early. An insider of Guming revealed to Panther Change that the construction of Guming's supply chain started in 2016. As mentioned in the prospectus, Guming has the largest cold chain storage and logistics infrastructure in the industry, and 97% of its stores can realize the cold chain distribution service of "two days one distribution".
Reef behind the food safety storm
Since March 16, the gloomy atmosphere has always been shrouded in the group of Chabaidao franchisees.
During March 15 this year, Chabaidao was criticized by name because of the store's awareness of changing the expiration date label of ingredients. The negative impact came quickly, and the franchisees did not make such bad expectations. Franchisees in many places confirmed to Panther Change that this incident had a huge impact on the turnover. In the second half of March, the turnover of stores was close to halving, and even worse, the turnover fell to one-third of the same period last year.
More than a month has passed since the 3.15 party, but many franchisees lack confidence in the recovery of turnover. The name call on March 15 only found a breach for the depressed franchisees, and the crisis had already begun before that. An insider close to Chabaidao said, As one of the advantageous markets of Tea 100, the takeout orders of stores in Shanghai have declined to varying degrees since this year, and the overall trend is almost halving.
A franchisee in Jiangsu and Zhejiang told Panther Change that the consensus of peers was that the 3.15 storm had a negative impact on the turnover of individual stores, which was expected to last for half a year.
Half a year is a precious time window for the new tea track with fierce competition. At the moment when the new tea market has been determined to turn into stock competition, consumers are becoming weak. At the same time, competing brands are constantly encrypting their store network, and more and more franchisees cannot afford to wait for half a year.
The food safety crisis is indeed the last straw that overwhelms some franchisees. A former franchisee who had just transferred his store said that he had joined Chabaidao since the beginning of 2023. In the first quarter of this year, his store had been unable to make profits and had already been hard supported. 3.15 After the storm, the daily turnover was cut directly.
Silent franchisees chose to close their stores. According to the data in the prospectus, from 2020 to 2022, the number of closed stores in Chabaidao will be 3, 13 and 76, which will soar to 220 in 2023.
Although Chabaidao is still trying to speed up the opening of stores, the store encryption logic that used to support the business model seems to be being tested, and the retention rate and expansion intention of franchisees are strongly related to the sustainable development of the brand.
According to the prospectus data, the annual net closing rate of Chabaidao has reached about 10%. By the end of 2023, the number of Chabaidao stores has reached 7801, but in the company's caliber, the encryption plan will last at least until 2027.
Another noteworthy data is that in 2023, Chabaidao will terminate cooperation with 663 franchisees, of which 397 franchisees' stores will be transferred to other franchisees for further operation.
It seems that not all franchisees quit Of be most willing to. A franchisee told Panther Change that the current franchisee signing mode of Chabaidao is slightly different from that of similar brands on the market. The signing period is very short, and it insists on signing once a year. When some franchisees of high quality stores want to transfer their stores, the transfer price arranged by the company will be halved. Therefore, some franchisees who are willing to transfer prefer to recruit people to take over the store on the social platform rather than through the company.
In August 2023, when Chabaidao submitted its statement to HKEx for the first time, a financial data attracted the attention of the outside world. By 2023, the proportion of takeout orders of Chabaidao has risen from 47.6% in 2020 to 59%, approaching 60% of the total orders. Chabaidao also repeatedly mentioned in the prospectus its good cooperation relationship with the head delivery platform, as well as its proud performance through delivery.
However, behind the high exposure and turnover of Chabaidao on the head delivery platform, countless franchisees offered sacrifices to the platform. A franchisee in Hubei showed one order of the store to Panther Change. A cup of single product with a unit price of 15 yuan needs to pay 23% of the commission and service fee to the platform, and also bear the activity subsidy of the platform to customers. The final gross turnover is only 5 yuan.
Where is the next wealth code for Sailing and Coffee?
Going to sea is an inevitable development proposition for new tea brands.
Among the common new tea brands on the market at present, in addition to Guming's slightly cautious response to the field of going overseas, other brands have already moved overseas one after another. In 2018, the first overseas store of the Snow City was located in Vietnam. In 2019, Bawang Chaji opened its first overseas store in Malaysia. In 2023, the tea of Xicha, Tianlala and Naixue will also anchor the opening of stores in Southeast Asia.
It is not difficult to understand that there is a relatively mature milk tea consumption market in Southeast Asia, and there is no need for too much market education. At the same time, the local consumer brands in Southeast Asia are not strong, which can easily rob the minds of users.
However, The location of the first overseas store of Chabaidao is unique, and it landed in Gangnam District, Seoul, South Korea in the middle of January this year. At the same time, Chabaidao is still trying to replicate the domestic store network logic: key encryption. In April, the second store Seoul Hongda Store and the third store Seoul Duoouting Galleria Store also opened one after another. At the same time, the store in Lihua New Village is also located in Seoul.
Although the store network in Seoul is becoming more and more dense, Southeast Asia is the most favored region in the Chabaidao prospectus. As mentioned in the prospectus, it is planned to establish a supply chain system covering Thailand, Vietnam, Malaysia and other Southeast Asian markets in 2024, and to set up a distribution center in 2025 to expand in Southeast Asia.
However, according to Panther Change, the dividend of Southeast Asia milk tea market has been approaching the end, and the inflection point of domestic expansion has begun to replicate in Southeast Asia market. For example, in Vietnam, the promised area protection scope of the pioneering snow city is shrinking from 500 meters to 200 meters by 2022. In this case, the profit space of tea brands will inevitably be divided, The middle price of Chabaidao is a bit awkward in the Southeast Asian market. The low price and high price of Mixue Ice City and Xicha occupy respectively. It is not easy to get out.
It is worth noting that the ambition of Chabaidao has also begun to show in the same inner coffee track. In January 2024, Chabaidao's sub brand "Coffee Grey" opened its first direct store in Chengdu. Although Chabaidao said that coffee ash will be an independent brand and will not participate in the Chabaidao store network, the prospectus shows that 5% of the raised capital will be used for coffee ash.
It is not difficult to see that Chabaidao wants to expand the second income curve. However, the cross-border coffee attempts of milk tea brands on the market, whether it is lucky coffee in the snow ice city, or Xicha, Shanghai aunts, have not yet developed a competitive brand.
In the case that the supply chain of Chabaidao is still relatively weak, will this be a road worth taking?
(Statement: This article only represents the author's view, not Sina.com's position.)
