Introduction: The milk tea business is so hot, is it profitable or not?
When can we get out of the current predicament?
Is there still potential in the industry?
The first share of the new tea drink was announced. On February 8, Nai Xue’s tea disclosed its 2021 performance forecast, with an estimated net loss of about 135 million to 165 million yuan.
This shocked consumers, "Milk tea is so expensive, but it's not profitable?" In fact, some new tea companies are not only underperforming, but also turbulent.
On February 9, rumors of a large number of layoffs of HEYTEA spread like wildfire on the Internet, but HEYTEA responded by saying, "There is no so-called large layoffs in the company, and a small number of staff were adjusted to normal staff based on year-end assessments. Tuning and Optimizing".
Last year, Chayan Yuese experienced a large number of store closures, employees and executives "quarreled" in the group and other storms.
This is a far cry from the milk tea business that exploded less than a year ago.
Last year, Michelle Bingcheng "killed crazy" on major social platforms with a "brainwashing" song, and its influence spread exponentially.
Nai Xue's tea also landed on the Hong Kong Stock Exchange on June 30, 2021, becoming the first stock of new tea drinks in Hong Kong stocks.
Hi Tea and Michelle Bingcheng were also rumored to be financing, but they were all refuted.
The milk tea business is so hot, is it profitable or not?
When can we get out of the current predicament?
Is there still potential in the industry?
According to reports, the scale of my country's new tea market revenue is expected to reach 142.8 billion yuan in 2023, but the current growth rate is slowing down in stages. And other important issues, the growth rate of the new tea industry will quickly return to more than 15%."
In the first year of listing in Hong Kong, Nai Xue’s tea lost more than 100 million in advance
2021 is the first year that Nai Xue's tea was listed in Hong Kong, but the performance in the first year was not satisfactory.
Nai Xue's tea's 2021 performance forecast shows that as of December 31, 2021, it recorded revenue of about 4.28 billion yuan to 4.32 billion yuan, and recorded an adjusted net loss (non-IFRS measurement) of about 135 million yuan to 1.65 billion yuan billion.
According to the previous announcement, from 2018 to 2020, Nai Xue's tea revenue was about 910 million yuan, 2.292 billion yuan, and 2.871 billion yuan in sequence; in the same period, under non-IFRS, the net profit was about -56.6 million yuan respectively. , -11.7 million yuan, 16.6 million yuan.
This year, Nai Xue's tea has not been easy.
At the beginning of its listing, Nai Xue's tea was dubbed the "first stock of new tea drinks" in Hong Kong stocks, and investors had high hopes. It is understood that Nai Xue's tea was particularly favored during the IPO period. The tea closed the book one day earlier than the original plan to close the IPO.
According to its announced subscription results, a total of 642,000 subscription applications were received under the Hong Kong Public Offering, which was oversubscribed by more than 432 times.
However, it fell below the issue price on the first day of its listing.
On June 30, 2021, the share price of Nai Xue’s tea closed at HK$17.12 per share on the first day of listing, a single-day drop of 13.54%.
Since then, Nai Xue's tea has fluctuated all the way down. As of the close on February 9, 2022, the current share price of Nai Xue's tea is HK$7.13 per share, with a total market value of HK$12.23 billion.
It has to be said that the new crown epidemic has a greater negative impact on the consumption of offline milk tea stores.
However, Nai Xue's Tea stated in the announcement, "In January 2022, the same-store revenue of the Group's Nai Xue's tea shop maintained a recovery trend. The COVID-19 epidemic in mainland China has eased, and Nai Xue's tea shop in Xi'an has Fully resumed business, the COVID-19 outbreak has limited impact on the Group’s business performance.”
In the past six years, it has entered 81 cities and opened 800+ directly-operated stores. Last year, it launched a new product in an average of 5 days
In November 2015, the company opened the first Nai Xue tea shop in Shenzhen.
It is reported that the origin of the name "Naixue's Tea" is because the founder Peng Xin's online name is "Naixue".
The company targets young women aged 20 to 35 as the main customer group, and innovatively creates the form of "tea drink + soft European bag", and is committed to providing modern people with the experience of "a good tea, a soft European bag".
According to public information, as soon as Nai Xue's tea came out, it developed rapidly and opened three stores in 33 days.
In June 2017, Nai Xue's tea created the phenomenon-level scene "Nai Xue Railway Station"; in September, the first store in Dongguan City was established; in October, Nai Xue's exclusive ranch was established; at the end of 2017, Nai Xue's tea began to go out of Guangdong area , expanding to the whole country, officially launching the "National Urban Expansion Plan".
According to CIC, in terms of total retail consumption in 2020, Nai Xue's tea is the second largest tea shop brand in China's high-end ready-made tea shop market, with a market share of 18.9%.
In terms of total retail consumption value in 2020, Nai Xue's tea is the seventh largest tea shop brand in China's overall ready-made tea shop market, with a market share of 3.9%.
After the listing, Nai Xue's tea received more attention from the public, and soon encountered a "black swan" of food safety. It was exposed by the media that there were various food safety problems in some stores.
At the end of 2021, Nai Xue's Tea released an annual review report on its official WeChat account.
The report shows that in 2021, the group will launch a new product in an average of 5 days, and a total of 79 new products will be launched throughout the year, including 36 types of tea, 37 types of roasting and 6 types of coffee.
In order to "enable Nai Xue's tea to truly operate in the international market for a long time and sustainably", Nai Xue's tea continues to make efforts in brand building and research and development of new products. Such products are generally welcomed by consumers, which has a positive impact on the business performance of the Group. The results of the Group for the year ended December 31, 2021 are yet to be finalized. The audited financial results of the Group for the year ended December 31, 2021 The information will be disclosed in the results announcement in compliance with the requirements of the Listing Rules.”
From 2015 to 2021, Nai Xue's tea has entered 81 cities across the country and opened 800+ directly-operated stores.
Analysis: In the next two or three years, the growth rate of the new tea market will slow down in stages, and it is expected to return to more than 15% after rapid consolidation
The Beijing News Shell Finance reporter noticed that while Nai Xue's tea continued to open stores, there were also store closures.
It is understood that Nai Xue's Tea closed 0, 1 and 8 Nai Xue's tea shops in 2018, 2019 and 2020 respectively, mainly due to the relocation of the tea shop to a better location nearby or Underperforming.
In the third and fourth quarters of 2021, 3 and 7 Nai Xue’s tea shops were closed respectively.
The increase in the number of closed stores and the pre-loss of performance are not the situation that Nayuki's tea is facing alone.
According to a report released by iResearch, there are many brands in the new tea industry. According to incomplete statistics, there are currently 163 new tea brands in China. Among them, Shanghai, Guangzhou and Beijing have the largest number of new tea brands, 41 respectively. , 33 and 28.
Chain brands have a relatively large market share in the entire new tea industry, about 90.8%, of which the franchise model is the majority, accounting for about 67.3% of all chain brands.
The mid-to-low-end chain tea brands represented by Michelle Bingcheng occupy the top market share in the new-style tea industry, accounting for nearly 50% of the market share. Tea brands collectively accounted for approximately 7.7% of the market share.
At the end of last year, due to the "quarrel" between employees and executives in the group, the topic #chayanyuese# was on the top of the hot search. Afterwards, the founder of Chayanyuese, Lu Liang, admitted that he had emo, "(2021) 11th The monthly salary adjustment is indeed a decision made based on the company's poor performance and the temporary closure of some stores in Changsha."
Then, Chayan Yuese put the price increase on the agenda, "It is understood that the price increase this time is mainly concentrated on milk tea products, most of which are generally adjusted by 1 yuan. Among them, Zhixiao's price increased by 2 yuan, while leisurely leisurely, floating life for half a day, There is no price increase for Zheng Zheng Zhi Yuan this time. The new price will be activated on January 7, 2022.”
Recently, some media reported that Hi Tea is implementing layoffs within the company.
The report shows that HEYTEA has started layoffs a few years ago, and will lay off some more after the year, involving 30% of the employees in total; the information security department has been laid off, and the store expansion department has been laid off by 50%; the laid-off employees will receive normal N+ 1 Compensation, you can also choose to transfer internally to other departments, such as technical positions to business positions, etc.
In this regard, on February 9, the relevant person in charge of HEYTEA told Shell Finance reporter: "The rumors are all false information, the company does not have the so-called large layoffs, and a small number of personnel were adjusted to normal personnel adjustments based on year-end assessment and year-end assessment. Optimization. At the same time, employees' year-end bonuses have been distributed to employees as normal before the Spring Festival according to their performance."
The "2021 New Tea Drinks Research Report" released by the China Chain Store & Franchise Association shows that from 2017 to 2020, the scale of my country's new tea drink market revenue increased from 42.2 billion yuan to 83.1 billion yuan, and is expected to reach 142.8 billion yuan in 2023.
In the next 2 to 3 years, the growth rate of new tea beverages will slow down in stages and be adjusted to 10% to 15%.
As for the reasons behind the slowdown in growth, the report analyzes: From the perspective of enterprises, in the face of intensified competition, higher rents, limited talent pools, food safety management needs to be further strengthened, and takeaways account for a high proportion of low profits and other factors, rapid Growth will have great management risks; from the perspective of external competition, the consolidation of the sinking market and the development of the western and northern markets all require market verification.
The report also pointed out, "If companies solve important issues such as branding, operational capabilities, and food safety management in the next 2 to 3 years, the growth rate of the new tea industry will quickly return to more than 15%."
The Beijing News Shell Finance reporter Yan Xia editor Chen Li proofreads Yang Xuli