Chinanews client, Beijing, March 2 (Zuo Yukun) With nearly five thousand years of accumulation, "tea" has become a shining page in my country's traditional culture; on New Year's Eve in 2021, a family name has " "Tea" enterprises have opened a new chapter in the industry with a prospectus.
The capital market began to smell of milk tea, but behind the sweetness, it is not that simple to tell new stories about new teas.
Image source: Weibo @奈雪的茶Nayuki
Sweet business, sprint for IPO on New Year's Eve
On New Year’s Eve, you and I were on vacation at home to make dumplings, but a milk tea shop was working overtime to submit the prospectus.
On February 11, Nayuki's tea formally applied for an IPO on the Hong Kong Stock Exchange.
If it goes public, it also means that Nayuki's tea will become the first new tea drink.
Nayuki's tea "going one step ahead" is also completely planned.
It has been revealing news of going public since 2019, and it has successively completed multiple rounds of financing.
After the C round of financing at the beginning of this year, Nayuki's tea valuation is close to 2 billion US dollars.
As the leading brand of the tea-drinking track, Tianyancha shows that Naixue's tea was born in 2015. The largest shareholders are the founders, Peng Xin, Zhao Lin and his wife, who hold 67.04% of the shares through Lin Xin Holdings.
Behind the birth of this "mom-and-pop shop", there is also a romantic love story.
Data map: There is a long line in front of Nayuki's tea door.
Photo by Zheng Jiangluo
According to their public speech, Peng Xin, who had been a director of a Hong Kong IT company, resigned because of the dream of opening a store.
Under the recommendation of a friend, she found Zhao Lin, who has been in the catering industry for more than ten years, soliciting advice.
After meeting for the first time for more than two hours, Peng Xin talked about her entrepreneurial dreams, but she didn't know that Zhao Lin, a "bachelor" in his 30s, was actually here to find the other half of his life.
"He said that I think your idea is very good. If you want to land faster, you can fall in love with me and the two of us will start a business together."
The two people who fell in love reached an agreement on life and business. After meeting, they got married and successfully opened a store. The name of the store was Peng Xin's online name Nayuki at the time.
In November 2015, Nayuki's tea was launched in Shenzhen and opened three stores as soon as it debuted.
"Even the brand director cut bread in the store during the three-day holiday on New Year's Day." Peng Xin once recalled the hot scene at the beginning of the opening.
It is said that the milk tea industry has made huge profits, but you secretly lost money
Many netizens expressed their congratulations as "spiritual shareholders" for Naxue's tea rushing to run the "first share of milk tea".
But some people found a problem in its prospectus: The current situation of Nayuki's tea business is not optimistic, and it can be summed up in four words: losing three years in a row.
From the point of view of net profit, from 2018 to the first nine months of 2020, Nayuki’s tea lost 69.73 million yuan, 39.68 million yuan, and 27.51 million yuan respectively. During the reporting period, there was no profit, and the cumulative loss in three years exceeded 100 million yuan. yuan.
Screenshot source: Nayuki's tea prospectus
"I dare to enter Prada with Nayuki's tea." When milk tea, a traditional drink, has been upgraded to a light and luxurious lifestyle for young people, "expensive" has also become a label they can't take off.
The prospectus disclosed that as of the first three quarters of 2020, the average selling price of Naixue's tea reached 43.3 yuan per order, the highest among domestic high-end freshly made tea chain stores, far exceeding the industry average of 35 yuan.
With the price equivalent to a quarter of the "court jade liquor" still losing money, people are more concerned about how the money is gone than how it came from.
"This business is not as profitable as everyone thinks." Peng Xin explained in an earlier interview that the cost of food is high, and the cost of labor is high. The only thing that is lower now is the cost of rent.
This is also confirmed in the prospectus.
Taking the period from January to September 2020 as an example, Nayuki’s tea raw material costs, staff costs, rental expenses, and property management fees accounted for 38.4%, 28.6%, and 15.2% of the total revenue, respectively. The three costs and expenses together accounted for the total revenue. More than 80% of the income.
This phenomenon has made Nayuki's tea IPO in Hong Kong called a "bleeding listing", but this is precisely the "burning money" written in the genes after my country's milk tea market has entered the 3.0 era.
Screenshot source: "2020 China's New Tea Industry Development White Paper"
Raw materials, manpower, rent, Nayuki’s triple difficulties
The first is the cost of raw materials.
In the 1.0 era, the first generation of milk tea was really blended with milk tea powder and water. This cheap aroma, bought at an average price of less than 10 yuan, existed in the memories of many people’s childhood milk tea shops on the street.
In the 3.0 era of new tea drinks represented by Nay Xue’s tea and Hey Tea, fresh fruits, high-quality tea, and fresh milk have become "standard", and top brands have gone deep into the upper reaches of the supply chain, such as Nay Xue’s tea. An exclusive strawberry garden has been established, and Hey Tea has built 500 acres of organic tea garden by itself.
The price of focusing on "real materials" is high cost.
In addition to labor costs, this is inseparable from the strategic positioning of Nayuki's tea "a cup of good tea, a soft European bag".
Nayuki's tea drinks and soft European bags.
Image source: Weibo @奈雪的茶Nayuki
"The cost of Nayuki is much higher than that of Hey Tea, because Nayuki has European bags." Some insiders said that Nayuki's soft European bags also emphasize on-the-spot production. The standard Nayuki's tea shop is usually equipped with a roaster and specializes in making it. Baking employees.
But these baking employees are sometimes idle.
"If the baked products are not sold out, they cannot continue to be made, but employees of different lines cannot be transferred. The tea drinking side is too busy but no one can help." This led to the number of people in Nayuki's tea shop. It has almost doubled, and the cost has doubled.
Finally, there are rental costs.
Compared with Hey Tea, Nayuki's tea burns more money in rent.
According to its staff, Nayuki’s tea is completely different from Heycha’s shop. The latter is mostly "takeaway" small shops, while Nayuki’s tea is basically large, with an average area of 200 square meters. Above, there are nearly 20 employees in each store.
Unlike previous milk tea shops, which are often located on the negative 1 or 5 and 6 floors of shopping malls, it is now a common practice for shopping malls to use new tea brands as the facade of the entrance area.
According to the information provided by CIC, as of December 31, 2020, based on the total merchandise transactions in 2020, 28 of the top 50 shopping malls in China, Nayuki's tea have entered, and the rent pressure can be imagined.
New style tea, "addiction" on the market
Having said so much, it is not difficult to find that when it comes to Nayuki's tea, it is difficult to avoid its old rival, Hey Cha.
Nayuki's Tea, which ranks second in the industry, submitted the prospectus first. People naturally also care about when the industry's top-ranked Hey Tea, which is highly praised by the capital, will hit the capital market.
Similar positioning, similar development model, similar price, and the same "milk tea duo" Xicha, the pace of financing has never stopped since 2016.
It is reported that Xicha has now completed the C round of financing, and it is only time to land in the capital market.
At the same time, Michelle Ice City, which focuses on the cheap route, did not fall behind.
Michelle Ice City has completed the first round of capital financing of 2 billion yuan, with a valuation of more than 20 billion yuan.
According to other news, Michelle Ice City’s A-share listing is also in the form of submission stage, and the listing process is expected to be completed within this year.
Facing the tea market with competing products like forests, the major top brands also seem to have reached a bottleneck period of development.
When the Internet celebrity milk tea, finally inevitably became a "net celebrity face", listing seems to be the only breakthrough method at present.
Data map: milk tea.
Image source: Visual China
Nayuki's Tea, which has declining profit margins and losing money year after year, insisted on going public. It explained in the prospectus that it will be used to expand the company's tea shop network and increase market penetration in the next three years; further carry out the digitalization of overall operations , In order to improve operational efficiency by enhancing technical capabilities.
In the face of the promising tea market, Nayuki's tea also needs to be "blood transfusion" for him.
But in the past, going public can only be icing on the cake, not just in time.
"The biggest problem with Naixue's tea is that its brand, product, and consumer group positioning have been deviated." According to Zhu Danpeng, an analyst in the Chinese food industry, Naxue's tea's own operating capabilities can support high-end products. Positioning and strategy?
Its original store orders and sales continued to decline, which has shown that there are major problems with its strategic positioning.
"Naixue's tea is a young brand." As Peng Xin mentioned in the prospectus when talking about the founding of the original intention, this is an era in which the tea industry can build a global brand.
In any case, when everyone is looking forward to an oriental beverage symbol that will rise in the vast Chinese market with solid purchasing power and sweep the world, these young brands have already set off.
Who are you more optimistic about on the new tea-drinking track?
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