The fire of the new tea drink burned in front of the Hong Kong Stock Exchange.
Following the tea Baidao, there are new tea brands rushing to the Hong Kong Stock Exchange. On January 2, Gu Ming and Mixue Bingcheng successively submitted prospectuses to the Hong Kong Stock Exchange.
What is the difference between the two and what signals are sent? New tea brands have been listed one after another, will the entire new tea market pattern change in the future?
Gu Ming and Mixue Bingcheng submitted listing applications on the same day
What are the signals?
According to the prospectus, Mixue Bingcheng is "the first in China and the second in the world", while the other Gu Ming is "China's largest mass freshly made tea shop brand (10 yuan to 20 yuan price range)".
The strength is not bad, but in terms of revenue, store size, etc., the data of the two companies have their own highlights.
1. They are all going public to make money, and the net profit margin of Guming is higher
According to the prospectus, in the first three quarters of 2023, Gu Ming's revenue was 5.571 billion yuan and its adjusted profit was 1.045 billion yuan. In the same time period, Mixue Bingcheng achieved a revenue of 15.4 billion yuan and a net profit of 2.5 billion yuan. Compared with 2022, the revenue and net profit of both companies have increased.
It can be estimated that the profit margin of Gu Ming in the first three quarters of 2023 is 18.8%, while the profit margin of Mixue Bingcheng is 16.2%. In terms of profit margins alone, Gu Ming is slightly better.
△图片来源:古茗
In addition, the data also shows that in 2023, the single-store operating profit of Guming franchisees will reach 376,000 yuan, the single-store operating profit margin will reach 20.2%, and the average number of franchisees will reach 3.1. In other words, the earning power of the Gu Ming franchise store is not weak.
2, Mixue Bingcheng almost leads the country, and Gu Ming has stabilized the basic market
The store volume of Mixue Bingcheng and Gu Ming is one of the best in the entire new tea industry.
According to the prospectus, as of September 30, 2023, the number of global stores has exceeded 36,000, and the number of domestic stores has 32,000+, making it the only enterprise in the domestic ready-made beverage industry to reach 30,000 stores. By the end of 2023, Guming will have more than 9,000 stores.
△ Image source: Mixue Ice City
There is no doubt that the scale of the stores in Mixue Bingcheng far exceeds that of Gu Ming. In terms of store layout, due to its own positioning of affordable prices, most of the stores in Mixue Bingcheng are distributed in the sinking market. It can also be seen from its prospectus that the stores of Mixue Bingcheng have radiated to the whole country, and most of the employment opportunities brought by the stores are distributed in lower-tier cities and counties in China. The number of stores in second-tier cities and below accounted for 79%, and the number of stores located in townships and towns accounted for 38%.
Interestingly, in addition to Zhejiang, Fujian, Hunan and other provinces, Mixue Bingcheng has won the first place in the number of ready-made beverage stores in most provinces and cities in the country. Among the cities mentioned above, Zhejiang is the birthplace of Gu Ming, and Fujian is a strategic place after Gu Ming stepped out of Zhejiang. According to the big data of Red Meal, Gu Ming has more than 2,000 stores in Zhejiang Province and more than 1,000 stores in Fujian. It is no wonder that in these two provinces, Mixue Bingcheng still failed to grab Gu Ming.
3. They are betting on the supply chain to build competitive barriers
Although the two companies have their own characteristics in terms of scale and revenue, they also have something in common, that is, they have a consensus on strengthening their supply chain capabilities.
According to the prospectus, Mixue Bingcheng has built a procurement network covering 66 continents and 35 countries around the world, which can ensure the quality and stable supply of raw materials, and at the same time, Mixue Bingcheng has also established a localized logistics system, including 11 self-operated warehouses with a total of about 66,000 square meters and localized distribution services.
△ Image source: Mixue Ice City
On the other hand, the storage infrastructure consists of 21 warehouses with a total construction area of more than 200,000 square meters, including more than 40,000 cubic meters of cold storage that can support different temperature ranges. At the same time, more than 75% of its stores are located within 150 kilometers of the warehouse, and more than 97% of its stores provide two-day one-day cold chain delivery services. In the first three quarters of 2023, the value of raw materials distributed through the cold chain will be about 3 billion, which is the highest level in China's ready-made tea shop industry.
Through the addition of procurement, logistics, transportation and other aspects, it ensures the stable supply of products in the stores of the two companies, and gives the brand stronger bargaining power.
Previously, an unnamed investor told the red meal network that in the stage of competition for scale and price of major tea brands, the construction of the upstream supply chain is the core, and it is also the most expensive to use money. "Raw material factories and cold chain capabilities are the key to achieving scale under the premise of brand quality assurance. ”
Sell goods to franchisees and charge service fees
The listing of new tea drinks depends on joining?
If you dig deep into the prospectuses of the two companies, you can also see that in the franchise area, the two companies have similar strategies, but also have different operating methods.
In terms of business model, although Mixue Bingcheng and Gu Ming have opened stores in the way of "direct sales + franchise", and franchise stores account for the majority of them. According to the prospectus, as of September 2023, 99.8% of the 36,000 Mixue Bingcheng are franchised stores, while only 6 of the more than 9,000 stores of Gu Ming are directly managed.
More importantly, almost all of the income sources of the two companies come from franchisees, including selling goods and equipment to franchisees, and collecting franchise fees, service fees, and training fees. Among them, the income from the sale of goods accounts for the vast majority.
According to the prospectus, in the first nine months of 2023, the revenue from the sale of goods (selling goods to franchisees) will be about 14.5 billion, accounting for 94% of the total revenue. In the same period, Gu Ming's revenue from the sale of goods was 4.17 billion, accounting for 75%.
The difference is that in terms of franchise management service income, Gu Ming is higher than Mixue Bingcheng.
Taking the first nine months of 2023 as an example, Mixue Bingcheng's franchise and related service revenue is less than 300 million, accounting for less than 2% of the total revenue, while Gu Ming's franchise management service revenue accounts for 19.5%, including the initial franchise fee, continuous support service fee, training and other service fees), of which the initial franchise fee accounts for 1.5%.
△ The left is the Honey Snow Ice City, and the right is the ancient tea. Image source: Screenshot of the prospectus
Generally speaking, the main way for chain restaurant companies to maintain performance growth is store expansion, and the expansion methods are nothing more than franchise and direct sales. Direct sales are more conducive to ensuring the tonality of services and brands, but the investment is also large, the expansion is slow, and the payback period is long.
Through the franchise model, we can not only quickly expand our market share and reduce financial pressure, but also earn the difference in price by selling goods and raw materials as a middleman, and obtain considerable profits.
There are at least 3 more in the queue for listing
The battle for the new tea drink brand has begun
It is worth mentioning that before Mixue Bingcheng and Gu Ming, Chabaidao had submitted a prospectus to the Hong Kong Stock Exchange in August 2023.
As early as July last year, Bloomberg quoted information from "sources" that six new tea brands, including Shanghai Auntie, Gu Ming, Mixue Bingcheng, Tea Baidao, Bawang Tea Ji, and Xinshi Brew, are all preparing to sprint to the market, and the financing amount of other companies may not exceed 500 million US dollars, except for Mixue Bingcheng.
It was also mentioned that Cha Bai Dao and Gu Ming would be IPOs in Hong Kong at the earliest, Xinshi Brew, which sells fried chicken and fruit tea, was also planning to list in Hong Kong, and Bawang Chaji was working with Bank of America and Citi to explore a potential US IPO, and Michelle Bingcheng had not yet decided on a listing location.
△图片来源:古茗
Now it seems that Tea Baidao, Gu Ming, and Mixue Bingcheng have all rushed to the Hong Kong IPO market, and Shanghai Auntie, Bawang Chaji, Xinshi Brewing and other companies may not be far away from landing in the capital market.
The involuted tea drink track has ushered in the "last window period". In the next few years, the market concentration and chain rate will be higher and higher. For the new tea brand in the top position, only by striving to maintain the scale advantage can it not be easily thrown off the gap.
Behind the construction of scale advantages, a large amount of financial support is also needed. This is also one of the important reasons why new tea brands are competing for IPOs.
In the future, who can take the lead in a successful IPO, or will be able to seize the opportunity! Borrowing from the capital market, who will eventually spend the "second share of new tea drinks"?