Text | Finance and economics are unscrupulous, the author | Void Abyss
"If you want to pay attention to rice, just eat the old woman's uncle", this Chinese fast food brand in Jiangsu, Zhejiang and Shanghai is about to usher in the IPO test.
The old woman's listing sprint has once again pushed the competition of "the first stock of Chinese fast food" to a white-hot one. Previously, the rural base and the hometown chicken have also launched an impact on the Hong Kong stock and Shanghai markets.
Rooted in Jiangsu, Zhejiang and Shanghai, where are the advantages and disadvantages of the old woman and uncle, can it succeed in this listing impact?
The Chinese fast food overlord of the "free mail area"
Click on the menu of the old lady uncle of the Meituan, in the package bar, you can see "Jiangnan braised fish", "Shaoxing plum vegetable roast meat", "fish lion head", "fish eggplant" and other dishes with Jiangsu and Zhejiang flavors.
This is also one of the characteristics of the Chinese fast food brand in the region that has occupied the position of the region for a long time since the establishment of the old uncle in 2000: it meets the tastes of local consumers, and the taste has remained unchanged for a long time, which is popular with consumers.
Back to the early 21st century at the beginning of the birth of the old uncle, the founder Yang Guomin, after operating the wonton business for more than a year, decided to drive into the track of Chinese fast food, in order to accumulate more than a year of "central kitchen + unified delivery" model, hoping to create a new era of Chinese fast food.
In the early stage of entrepreneurship, Yang Guomin did not choose to "run fast to start", but chose the relatively less "Zhejiang" of "thick accumulation and thin hair", which fully demonstrated the caution and meticulousness of a Huzhou person.
Until 2007, the old lady only owned 6 stores. At this time, Yang Guomin believes that the old woman and uncle are still in the "initial accumulation stage" and need to be steady and steady.
As a Chinese fast food brand that pursues a high degree of standardization, Yang Guomin attaches great importance to the supply of ingredients, and after taking the local direct procurement of the old lady uncle to ensure the reliability of the ingredients, Yang Guomin spent 30 million yuan to upgrade the central kitchen system.
The improvement in standardization brought an important milestone in the business and brand to the old woman, the supply of Chinese fast food for the 2010 Shanghai World Expo.
This appearance at the World Expo is not only an affirmation of the old woman's standardized Chinese fast food, but also an external appearance of Chinese fast food.
The success of the World Expo has strengthened Yang Guomin's determination to take root in Jiangsu, Zhejiang and Shanghai from a certain level. According to the information of the IPO prospectus (filing draft) (hereinafter referred to as the "prospectus"), by the end of 2021, the old uncle has a total of 388 stores in 16 cities in Jiangsu, Zhejiang and Shanghai provinces, including 364 directly operated stores and 24 franchised stores.
Lao Niang's direct competitors, Lao Xiang Ji and Village Ji, have 287 stores in Jiangsu, Zhejiang and Shanghai, respectively. Although in the total number of stores, the old lady uncle and the above two opponents are not at the same level (the total number of hometown chicken stores is 1073, the total number of rural base stores is 1145), but only from the regional market, the old mother has a "home advantage".
In the view of the old uncle, the strategy of holding the development of the "free mail area" can give play to the unique advantages of the brand. First of all, the Yangtze River Delta region is one of the most economically developed areas in the mainland, according to the data of the Seventh Population Census Communiqué, as of the end of 2020, the total permanent population of the Yangtze River Delta has reached 235 million people, and the market capacity for the development of catering is vast.
Secondly, the old lady uncle who sits in the "home" can avoid the risk of developing new markets abroad, and it is still unknown whether the chinese fast food brand with Jiangsu and Zhejiang cuisine can be accepted by consumers in other regions.
For the development strategy of "enclosure and self-love" of the old uncle, as the sponsor of the IPO of the old uncle, CITIC Securities gave the opinion that "the issuer's operating status is good, the enterprise positioning is clear, the consumer market is broad, the store layout is reasonable, the operating performance shows a growth trend, and the fundraising project planning is reasonable".
Move forward steadily, and then, stay put
So what is the performance of the old woman and uncle who has taken root in Jiangsu, Zhejiang and Shanghai?
According to the prospectus, in the past three years, the revenue of the old uncle was 1.222 billion yuan, 1.207 billion yuan and 1.525 billion yuan, respectively, and the net profit attributable to the mother in the same period was 65.1746 million yuan, 20.7075 million yuan and 62.9922 million yuan, respectively.
In 2020, due to the impact of the epidemic, the scale of the old woman's uncle's revenue and profit declined sharply.
Returning to the old woman's IPO plan, the prospectus shows that the listing will raise about 830 million yuan, of which more than half, nearly 420 million yuan will be used for the construction of new stores in Jiangsu, Zhejiang and Shanghai.
In the past three years, the old woman and uncle have opened 42, 62 and 69 new stores respectively, and the average single store revenue in the same period is 4.3141 million yuan, 3.8618 million yuan and 4.1677 million yuan, respectively.
According to the plan, the average annual operating income of the project after reaching production is 1.3 billion yuan, the internal rate of return on the project investment finance (after tax) is 34.58%, and the project investment payback period is 4.39 years.
At that time, the old lady will have a total of 690 stores, and the location of store development will still be carried out in Jiangsu, Zhejiang and Shanghai. Although in terms of the total number of stores, the old uncle will continue to lag behind the direct competitors, but from the perspective of the number of regional stores, the old uncle's determination to continue to consolidate his core regional status is very obvious.
However, the old lady herself generously admitted in the prospectus that there is a "risk of concentration in the sales area" in the future operation and management: "During the reporting period, more than 96% of the company's revenue came from the catering operation income of the directly operated stores, and the company's directly operated stores were mainly distributed in zhejiang, Shanghai, Jiangsu and Anhui provinces/municipalities directly under the central government, of which the proportion of Zhejiang regional revenue to the operating income of catering stores in each period was 54.08%, 56.88% and 57.13%, respectively, accounting for the highest proportion. The company's revenue is concentrated in the Yangtze River Delta region, and there is a risk that the sales area is relatively concentrated. If there is a material adverse change in the operating environment in the Yangtze River Delta region, it will have a material adverse impact on the company's business. ”
The old lady and uncle of the direct operation model choose large-scale operation is the only way for chain catering enterprises, and the construction, management and labor of directly operated stores require very abundant cash flow, which is also one of the reasons why it is easy to cause high debt ratio.
According to the prospectus, in the past three years, the asset-liability ratio of the old woman's uncle was 60.40%, 43.23% and 61.12% respectively, which was generally higher than the level of listed companies in the same industry. In this regard, the response given by the old woman's uncle is that "the company's asset-liability ratio is generally higher than the average level of listed companies in the same industry, mainly because the company has not yet been listed and its equity financing ability is relatively weak."
In addition to the needs of the old woman's own development, Caijing Wuji also found the requirements of the VAM agreement for the listing of the company in its prospectus: from September to October 2020, the actual controller of the company signed a capital increase agreement containing VAM clauses with the investment institutions Yuanyu Investment, Chenglin Investment Chengzhuo Investment, Chengjin Investment, Jinhui Investment, Heqinxing, and Cornerstone Investment, and in the case that the company failed to submit the initial public offering listing declaration materials and complete the IPO listing within the agreed period, It was agreed that the actual controller should repurchase the investor's equity.
According to the VAM agreement, the old uncle needs to submit the listing declaration materials and complete the IPO within the agreed period, otherwise the actual controller of the old woman will need to repurchase the shares of such investment institutions.
Therefore, an early listing is also a key measure to complete the VAM agreement.
Want to go out of Jiangsu, Zhejiang and Shanghai, the old woman's uncle has a long way to go
We can clearly feel the development ideas of this Huzhou enterprise from the development process of the old mother-in-law and this prospectus: take root in the core area, and repeatedly consolidate its original advantages, take advantage of the high-level economic development advantages of the "free mail area" in Jiangsu, Zhejiang and Shanghai, and the high consumption capacity of the population, and do a good job as a regional Chinese fast food brand.
The IPO is only another step forward on the road of enterprise development, and the planning after the listing is basically in line with the past development rate of the old woman and uncle.
In fact, we can find from the prospectus that although 96% of the revenue of the old uncle comes from store sales, splitting this 96% of the revenue, in the reporting period, the income of the old uncle's catering stores, the takeaway amount was 493 million yuan, 574 million yuan and 700 million yuan, respectively, with an average increase of nearly 20% year by year. The proportion of takeaway amount also increased from 41.38% in 2019 to 47.30% in 2021.
Although the epidemic in recent years has caused a big impact on store revenue, through the improvement of the online operation system, the online turnover of the old woman is gradually becoming an important part of its revenue system.
According to the data of the National Information Center, the turnover of online takeaway in the mainland has been rising, accounting for an increasing proportion of the national catering industry, and the proportion of online takeaway in the catering industry revenue in 2021 has reached more than 20%.
In the listing plan of the old woman's uncle, 44 million yuan will be used for the optimization and construction of the information system in the future.
In terms of the standardization of catering that Yang Guomin has always attached great importance to, from the information disclosed in the prospectus, the future will still be the top priority of the old woman's uncle: the construction cost of the supply chain comprehensive base project is about 306 million yuan, accounting for 36.9% of the overall listing funds raised.
According to the report of The Guolian Securities Research Institute, in terms of revenue caliber, the chain rate of Chinese-style fast food in 2020 is 25.9%. Under the leadership of leading catering enterprises, the standardization of Chinese fast food store operations, raw material procurement, and cooking and production processes is gradually improving. With the improvement of the central kitchen and supply chain, it will continue to promote the standardized operation of the old lady and uncle, and it is also an important measure to enhance the comprehensive ability of the store.
Compared with the direct competitors of Chinese fast food such as Laoxiang Chicken, Village Base, and True Kung Fu, Lao Niang's post-listing strategy seems to be too "safe" for the capital market. The reason for this is not only the above-mentioned positioning of enterprises themselves, the uncertainties for expanding the external market, but more importantly, it is based on the historical and environmental background of the expansion of Chinese fast food.
Born in Chongqing, Rural Foundation was officially listed on the New York Stock Exchange in September 2010, but with a significant decline in operating performance in the later period, it was delisted in April 2016 after 5 years of listing; At one point, he said that he would open 1,000 companies in 2010, and because of the company's internal equity dispute, he eventually failed to impact the listing.
From the perspective of product innovation and enterprise research and development, the old lady and uncle seem to have done not do enough. The prospectus discloses that from 2019 to 2021, the old woman's research and development expenses will be 3.2701 million yuan, 2.7288 million yuan and 3.3202 million yuan, and the proportion of research and development expenses will be 0.27%, 0.23% and 0.22% respectively, which will not increase but decrease, which is lower than the average of peers: 0.49%, 0.59% and 0.57%.
As of December 31, 2021, the old lady has 3,419 employees. Among them, there are 43 R&D marketers, accounting for 1.26%, and 3 core technical personnel; In terms of academic qualifications, there are 2,307 people in high school and below (including technical secondary schools and technical schools), accounting for 67.48%.
Although as a fast food company, R & D personnel do not play a key role in the development of enterprises, but product innovation, technological breakthroughs, or need the corresponding talent reserves, in this regard, the old uncle obviously has a lot of room for improvement.
According to the data provided by the "2021 China Chain Catering Industry Report", the market size of China's Chinese fast food industry in 2021 will reach 774.4 billion yuan, an increase of 115.4 billion yuan over 2020, an increase of 17.51% year-on-year.
In the face of the huge stock of Chinese fast food market, the steady business philosophy supports the old woman and uncle step by step, and the complete standardized operation makes its catering and service have a good regional market reputation.
However, for a catering company that aims to impact the capital market and rapidly expand the scale of stores, the mentality of the old lady and uncle to seek stability seems to be detrimental to its favor for obtaining capital.
Whether innovation can be achieved in the short term, how online operations can support half of the sky of revenue, and when the ambition to expand outwards will be revealed are issues that the old lady uncle needs to think about urgently, and it is also an important barrier set by the capital market for the listing of the old woman.