Green Tea Group, the operator of the "first generation of net red restaurants", handed over the hong Kong Stock Exchange for the third time.
On 8 April, Green Tea Group Limited ("Green Tea Group"), the operator of casual Chinese restaurants, submitted an application for listing on the Main Board of the Hong Kong Stock Exchange. Citi and CMB International are its co-sponsors.
This is already the third time that Green Tea Group has delivered the table. In March last year, Green Tea Group submitted its first listing application to the Hong Kong Stock Exchange for listing on the Main Board of Hong Kong. However, due to incorrect information in the prospectus, the listing application for the version was disclosed to be "invalid" six months later. Subsequently, in October of the same year, Green Tea Group again submitted a listing application to the Hong Kong Stock Exchange and disclosed the prospectus after the hearing in March this year, but the listing application materials were "invalid" again.
It is worth noting that last year, the catering industry ushered in a wave of "listing tide". However, the first listing application submitted by Laowang, a hot pot brand that was also submitted in March last year, has also been "invalidated". Subsequently, On March 14 this year, Laowang again submitted the form to the Hong Kong Stock Exchange.
After the "bread temptation", it is difficult to make a hit
Green Tea Restaurant can be said to be the "first generation of net red restaurant", in 2008 in Hangzhou opened its first store, focusing on Chinese fusion cuisine, cost-effective, once with the signature dish bread temptation to become popular.
According to the prospectus, Green Tea Restaurant was commented on by the public as "Top 50 Most Popular Restaurants of the Year" in the second year of its opening, and has since begun to expand nationwide, covering all first-tier cities. According to the prospectus, in 2021, Green Tea Group will occupy 0.5% of the market share in the casual Chinese catering market, ranking fourth; the Chinese sauerkraut fish brand Taier will have a market share of 0.8%, ranking second.
Comparison of industry conditions. Source: Green Tea Group Prospectus
Founded more than ten years ago, green tea restaurants have maintained the advantage of parity, and the prospectus shows that from 2019 to 2021, the per capita consumption of green tea restaurants will remain at about 60 yuan. However, green tea restaurants that have become popular with creative dishes and fusion dishes have rarely launched new explosive models for many years.
According to the prospectus, each restaurant of the Group can offer 80 to 100 dishes, updating about 20% of the dishes per year, and launching 120, 147 and 178 new dishes from 2019 to 2021 respectively. However, in various review platforms, bread temptation still ranks first in the list of recommended dishes, and recommended dishes such as green tea roast chicken and stone pot chicken soup tofu have also been launched for many years.
While the lack of new blockbusters, the signature dishes of green tea restaurants have also been imitated by competitors. Taking bread temptation as an example, in the public review search, it can be found that many restaurants offer similar products. But the number of bread temptations recommended at green tea restaurants is about ten times that of other restaurants.
Last year's revenue was nearly 2.3 billion, and the turnover rate was still inferior to that of peers
Judging from the financial data, the impact of the epidemic on Green Tea Group has weakened significantly, and the group achieved a rebound in performance last year and turned a loss into a profit. From 2019 to 2021, the revenue of Green Tea Group was 1.736 billion yuan, 1.569 billion yuan and 2.293 billion yuan, and the net profit was 106 million yuan, the loss was 55.262 million yuan and 114 million yuan, respectively.
Group profit/loss. Source: Green Tea Group Prospectus
The overall performance of Green Tea Group last year was eye-catching, but specifically, some restaurant operations were not ideal. In 2021, there were 44 green tea restaurants with operating losses totaling about 24.35 million yuan. Among them, 31 new restaurants have not yet reached break even, 2 restaurants have been renovated, 6 have operated less than expected, and as of the last practicable date, 2 restaurants have closed.
In terms of the turnover rate, Green Tea Group has not yet recovered to its pre-epidemic level and is lower than its peers. In 2020, the turnover rate of Green Tea Group quickly fell from 3.34 in 2019 to 2.62, and rebounded to 3.23 in 2021, but it was still lower than the pre-epidemic performance. From the perspective of the same industry brand Taier, its turnover rate in 2021 is 3.4, and in 2019 it is 4.8.
Group turnover rate by region. Source: Green Tea Group Prospectus
Despite this, Green Tea Group is still accelerating its store expansion. The Group increased from 163 stores at the end of 2019 to 180 in the following year, and 59 new stores were opened in 2021, an increase of more than 30% over 2020. As of the last practicable date, Green Tea Group has 240 restaurants across the country, and plans to open 75, 100 and 50 new stores in 2022-2024, respectively.
According to the plan, Green Tea Group will focus on second-tier, third-tier and below cities. In its prospectus, the Group said that its cost-effective pricing model gives it a competitive advantage when expanding to lower-tier cities.
In terms of fundraising purposes, Green Tea Group will continue to invest in offline store expansion in the future, in addition, the group will also invest in the construction of central kitchens, with 90% of the production capacity used for store supply and 10% for retail.
The Group's future expansion plans. Source: Green Tea Group Prospectus