Before this time, the village base and the hometown chicken were often questioned by the media about the rapid expansion of KFC's popularity, and even some media called it "KFC's Chinese disciples".
Wen 丨 BT Finance You Li
On the map of world cuisine, Chinese food has an unshakable status.
But unlike other industries that take landing in the secondary market as the highest goal, most of the bosses in the Chinese food industry did not have the desire to finance in the early years, even if they were also catering, compared to milk tea, pastries and other tracks, Chinese food received much less attention and capital injection, which highlighted the strong strength of players running and listing, and the village base that recently announced that it will be listed on the Hong Kong stock market is so.
In fact, this is not the first time that The Village Base has been listed, as early as 2010, the Village Foundation had heard the bell on the New York Stock Exchange with the titles of "China's first catering company listed on the MAIN Board of the United States" and "the first stock of Chinese-style fast food". At that time, its aura was dazzling, the store exceeded 100, the stock rally was obvious, and the founders who were full of spirit could not imagine that they would be delisted after a few years, just as investors could not think of a reason to be optimistic about the rural base again.
With 1145 directly operated stores and a market share of 6.8%, the rural base is coming menacingly this time. However, as zheng Rongnan, a professional investor, said, Chinese fast food has gained good momentum in recent years, and the supply chain and brand construction have been more perfect, which may mean that the certainty of entering Chinese food is higher, "but the certainty is high, which does not mean that the success is high." In the past two years, there have been head companies like Haidilao who have paid the price. ”
The old problem of making a profit is difficult
As mentioned earlier, when the village base was first listed on the U.S. stock market, a hundred stores were its exclusive favorite chips, and this time with the scale of more than a thousand stores, did the country base perform better? The answer is no.
Looking at the rural-based prospectus, it can be seen that more than 1,000 stores have indeed brought a visible favorable impact to the rural-based revenue. In 2019 and 2020, the rural base achieved revenue of 3.257 billion yuan and 3.161 billion yuan respectively. Revenue in the first nine months of 2021 reached 3.424 billion yuan, an increase of 56.4% over the same period in 2020, and in addition to 2020, which has a small base caused by the impact of the epidemic, the revenue data released by the village base in the first three quarters of 2021 has also exceeded the full year of 2019.
In addition to the increase in total revenue, the two major businesses of restaurant-to-store consumption and takeaway consumption maintained growth. The revenue contribution rate of the takeaway business rose from 26% in 2019 to the latest 34%, reflecting that the rural base has kept pace with the times and also reduced the pressure on the in-store business. The epidemic is not over, there are still various emergencies in the post-epidemic era, and the consumption of stores is bound to decrease when the home economy recovers, so it is definitely not a bad thing to tilt or exert resources in the takeaway business at present.
However, as a restaurant with the core business philosophy of "delicious and not expensive" and "extreme cost performance", the village base has benefited from it and is also bound by it. According to the prospectus data, since 2019, the net profit of the rural base has been 82.7 million yuan, -2.42 million yuan and 163 million yuan, respectively. Leaving aside the losses caused by the black swan event, compared with 2019 in the first three quarters of 2021, it will also be found that although the latest revenue has doubled in the past, the net profit margin has only increased from 2.5% to 4.8%. This small profit, no matter in which enterprise or industry is not high.
Another manifestation of the large gap between net profit income and the size of the store is the unit price that is always at a low level. According to the data disclosed in the prospectus, the prices of rent, water and electricity, manpower and raw materials are rising today, whether it is the main brand Village Base or the sub-brand Mr. Rice, the indicator of the average consumption per order is declining.
As of September 30, 2021, the average consumption per single single of the village base was 25.9 yuan, down 0.7 yuan compared with the same period in 2020 and 2019, while the turnover rate remained unchanged. Although Mr. Rice's turnover rate increased from 3.3 to 4.2, the average consumption per order was 22 yuan, which was also 0.7 yuan lower than in 2019 before the epidemic.
The turnover rate is one of the most important factors in measuring the profitability of the catering industry, and the indicator of the rural base, whether it is the main brand or the sub-brand, is not excellent. According to the prospectus data, the village-based turnover rate has not been broken 3, from 2019 to the first nine months of 2021 were 2.8, 2.0, 2.8, and the sub-brand Mr. Rice's overturning rate was 3.3, 3.4 and 4.2 respectively.
At the same time, the latest overturning rate of Haidilao hot pot, which diners eat longer and has a higher unit price, is 3.4, and Tanzai International, which is also a fast food brand, has an average unit price of 53.5 yuan, 58.4 yuan and 58.4 yuan as of 53.5 yuan, 58.4 yuan and 58.4 yuan respectively, respectively, as of 5.5, 4.8 and 3.0 in the first quarter.
In addition, the village-based ping effect is also unsatisfactory. Generally speaking, the ping effect is directly related to the number of seats and the unit price of customers, and is generally used to measure the efficiency of store operations. Compared with the prospectus data, the ping effect of Village Base and Mr. Rice has reached a new high in 2021, but the average daily ping effect of 56.4 yuan and 65.5 yuan is not very good, which reveals that the group's high revenue is more dependent on the problem of extensive store opening, and the old problem of weak profitability is still not solved.
Optimistically, a lower single purchase can attract more consumers, and high passenger traffic can effectively drive an increase in overall income. On the other hand, pessimistically speaking, in today's consumption upgrade and upstream costs continue to increase, how long can the strategy of small profits and high sales be maintained? In the end of the operation of the enterprise, the real competition is efficiency rather than scale, according to the official statement of the village base, the future will continue to open stores, the two brands to open a total of at least 250 stores in 2022, rapid expansion of cash flow pressure finally still need to face.
The sipping of the fast food world
When the news of the listing of the rural base came out, many investors who usually neglected to pay attention to the catering industry confused it with the hometown chicken. After all, compared with the chairman's hand-torn employee salary reduction joint letter, the 200 yuan earthy taste conference and the official micro often "clucking" to touch the fish mix and many other memory points of the hometown chicken, the image of the village base in the hearts of the majority of consumers can be called blurred.
Before this time, these two fast food chains were often questioned by the media about the rapid expansion of KFC's popularity, and even some media called it "KFC's Chinese disciple village base, it looks like the cottage is really delicious to eat".
However, in the eyes of the catering industry, the two companies have actually been fighting for many years. In the list of China's top 50 fast food enterprises published by the China Cuisine Association, as early as 2019, the hometown chicken pressed the seventh village base with the fifth posture. In May last year, Laoxiang Chicken announced that the number of stores nationwide exceeded 1,000, and it was very tight with the rural base in terms of the scale of opening stores, and the goal of laying 1,500 direct stores in 2023 undoubtedly spawned the anxiety of the rural base.
According to the data disclosed in the prospectus, most of the current number of stores in the rural base is concentrated in the Sichuan-Chongqing area, although Hubei and Shanghai are also involved, but in general, there are more first-tier cities where the hometown chicken has opened up and stationed. On January 6 this year, LaoXiang chicken officially announced the end of the Pre-IPO round of financing and prepared to go to the A-share main board for listing, which sounded the horn of fierce competition among Chinese fast food players.
From the perspective of development path, the real benchmark of the village base is not the hometown chicken, but the sipping and feeding of the hot pot track.
Sipping and feeding is a Taiwanese hot pot founded by Taiwanese He Guangqi in 1998, although the main business is not the same, but from the perspective of brand strategy, the village base and sipping have many commonalities, the most obvious of which is their weight on the sub-brand.
The sub-brand of Sipping and Feeding is called Xiang xiang, which focuses on high-end business scenarios and seeks higher premiums and profits under the same conditions through the deep utilization and synergy effect of the supply chain. Statistics from Suning Institute of Finance show that since 2016, the revenue contribution of the Group has increased by an average annual rate of 50%, and in the first half of 2021, the revenue of Xiang xiang accounted for nearly 40% of the group's total revenue. The impact of the epidemic and the huge shock of the company's executives have not affected the layout plan of Xiang tang in east and south China, which analysts believe proves that the parent company continues to be optimistic about the development of the tang tang brand.
And Mr. Rice, a rural sub-brand, has also risen at an astonishing pace in the past two years. As of the end of the third quarter of 2021, Mr. Rice's operating profit was 1.628 billion yuan, more than 8 times higher than the same period in 2020, accounting for 41.1% of the company's total revenue, while this figure was only 25.7% in 2019.
Mr. Rice's operating margin is also catching up. In 2019, the operating margins of Village Base and Mr. Rice were 10.7% and 6.5%, respectively, and the gap between the two widened to 9.2% and 3.3% in 2020. But by 2021, the distance between the two operating margins began to shorten, and they crossed the double-digit mark, reaching 12.6% and 10.4%.
Therefore, we have reason to believe that the future operation of the rural base may encounter the same problem as the breastfeeding, that is, the sub-brand "Gong Gao Zhen Lord", which side the tilt of resources such as personnel and funds should fall.
After the departure of Zhang Zhenwei, CEO of Xiang xiang hot pot, the investment community generally believes that "Xiang Xiang has lost its soul". Many people in the industry said that a series of personnel changes since then are not unrelated to the competition between various brand factions within the group, which has also indirectly led to the decline in the stock market. Since March 2021, sipping and nursing has begun a sustained sharp decline, the glory of the highest point of 26.94 yuan has not reappeared, and now the stock price of 5.81 yuan, even if the founder himself is down, it is difficult to reverse the decline. For the village base, which has not yet launched a "killer" product, the difficulties encountered will only be more difficult.
Chinese food is not a gladiatorial arena
Of course, the village base is not yet listed, and it may seem premature to discuss the future, and the more serious problems are hidden in the cities mentioned in the previous paragraph. As mentioned above, according to the number disclosed in the prospectus, more than 60% of the thousand stores of the rural base are located in the Sichuan-Chongqing region, and the main brand rural base has a total of 602 stores, of which only 37 are from Yunnan, Shaanxi, Guizhou and other places.
The advantage of regional centralized store opening is that it can effectively and efficiently use the supply chain and reduce the burden of funds, but a real national expansion is indispensable, and the supplementary lesson will eventually come. People who have long followed Chinese catering said: "Brands need to break through the limitations of regional development, whether it is in cross-regional personnel management, supply chain protection, or the construction of the operating system, they still have to do more homework." ”
According to the statistics of enterprise investigation, the number of registrations of catering-related enterprises has been rising year after year in the past decade. In the whole year of 2020, a total of 247.2 enterprises that can connect with catering have registered, and in the first ten months of 2021, this data has refreshed to 3.841 million, with a year-on-year growth rate of 95.4%.
In addition to the fierce competition, it further shows that the pattern of China's catering market is undecided, and new players still have opportunities. Referring to the statement in the prospectus of the village base, according to the revenue of the chain restaurant in 2020, the village base with a market share of 6.8% is already the largest directly operated Chinese fast food group in China. Based on the total revenue of the same year, the market share of 0.5% of the rural base can be ranked fourth.
So for now, the Chinese food track is not a gladiatorial arena for head players, and in the long run, the Chinese food track will not be monopolized by a giant or some giants. Zheng Rongnan said that Western-style fast food has more advantages in chain operation, "compared with the simple and rapid processing of Western-style fast food, the materials, cuisines and dishes of Chinese food are extremely rich in cooking techniques and processes." He believes that the ability of national chain operation is not only a problem that needs to be solved by Chinese fast food such as village-based fast food, but also a story that can be told to the capital market.
The fight between catering enterprises such as village base, laoxiang chicken and jiumaojiu may not be able to determine the king of Chinese fast food, but in this process, the continuous iteration ability of the brand's cultivated products, the ability to reduce internal organization construction and the ability to reduce costs and improve quality and efficiency are all internal strengths, which will be fed back to themselves in the future. And this is the root of the company's survival.
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