Since Nai Xue's tea was listed, new tea brands have begun to go public, and the market has become more and more enthusiastic about who will be the "second share of new tea drinks".
Now, too, the answer has emerged.
On April 15, Chabaidao officially opened its IPO on the Hong Kong Stock Exchange. The IPO price is 17.50, with 200 shares per lot, and the IPO period is from April 15 to April 18, and it is expected to be listed on April 23, becoming the "second share of new tea drink". This not only represents the improvement of its brand strength and market recognition, but also a microcosm of the vigorous development of the new tea beverage industry.
For investors, the listing of Tea Baidao undoubtedly provides a window to observe and participate in the development of the new tea beverage industry.
Under the current trend of consumption upgrading, the new tea beverage brand has successfully captured the hearts of young consumers with its unique product innovation and high-quality consumer experience. The uniqueness of Chabaidao, which can stand out among many brands and successfully land in the Hong Kong stock market, is worthy of our in-depth discussion.
1. Sustainable and high growth, two key words highlight profitability
Unlike Nayuki's tea, Chamodo was already profitable before it went public.
Based on the core financial data, the author believes that the performance of Chabaidao in recent years can be simply summarized into two key words: sustainability and high growth.
According to the prospectus, while maintaining the status and brand awareness of first-tier and new first-tier cities, Chabaidao continues to penetrate lower-tier cities with huge consumption growth potential. As of the Latest Practicable Date, Chabaidao had a total of 8,016 stores in 31 provinces and cities across the country, achieving full coverage of all provinces and tier-level cities in China.
In terms of retail sales in 2023, Chabaidao ranked third in China's freshly made tea shop market, with a market share of 6.8% and a total retail sales of its stores reaching about 16.9 billion yuan.
In terms of revenue, from 2021 to 2023, the revenue of Tea Baidao increased from 3.644 billion yuan to 5.704 billion yuan, of which the year-on-year growth rate in 2022 was 16.1%, and the growth rate will further accelerate at 34.8% in 2023. The continuous revenue growth not only proves the company's leading position in the market, but also reflects the effectiveness of its business model and accurate grasp of market demand.
In terms of profitability, the gross profit of Chabaidao will reach 1.964 billion yuan in 2023, a year-on-year increase of 34.9%, and the gross profit margin will remain at a healthy 34.4%. The stable and high gross profit margin shows that the company has performed well in cost control and pricing strategies, and can effectively convert market opportunities into actual profits, while maintaining the competitiveness and profitability of products.
What's more noteworthy is that the compound annual growth rate of Chabaidao's net profit reached 21.6% between 2021 and 2023, showing a strong growth momentum in the company's profitability. In the recent fiscal year 2023, the company's profit for the year reached 1.151 billion yuan, a year-on-year increase of 19.3%, which further confirms the excellent performance of Chabaidao in financial management and profitability.
In order to understand the profitability of Chamodo more intuitively, we can put it in a broader perspective and compare it.
Taking the data of 2022 as an example, although Mixue Bingcheng has an advantage in the market with more than 20,000 stores and an annual revenue of 10 billion, Chabaidao has achieved a net profit margin of 22.8% with only 6,361 stores, exceeding the net profit margin of Mixue Bingcheng of 18.5%.
It's like two athletes, Michelle Bingcheng has more fans (number of stores), but Cha Baidao performs better in the competition (higher net profit margin). Despite the large number of spectators (stores) in Mixue Bingcheng, Cha Baidao can win more medals (profit) every time it appears (each store opened).
It can be seen that Chabaidao is more accurate and efficient in terms of single-store profitability, business strategy and market positioning, which is enough to reflect its strong profitability and potential for sustainable growth.
2. Under the support of the two major supports, the path of sustainable growth is clear
From the source, the core of Chabaidao's ability to achieve such performance lies in its clear growth path and key support.
First, a forward-looking business model.
Chabaidao's business model has shown significant forward-looking, such as its comprehensive coverage of all tier-level cities and the continuous increase in the proportion of business in the sinking market, focusing on the small store model and takeaway business, and focusing on digital marketing. In recent years, the "right time and place" of the consumption environment has evolved to provide the basis for rapid and sustainable growth of such tea Baidao.
With the continuous improvement of disposable income and urbanization rate, consumption upgrading has become an irreversible long-term trend, and the awakening of health consciousness has promoted the diversification of demand for catering services, including high-quality and healthy food and service quality, which has directly driven the demand growth of China's freshly made tea shop industry. In addition, the potential of the sinking market has gradually become prominent, and it has become a competitive highland for ready-made tea brands to pursue rapid growth.
According to Frost & Sullivan, from 2018 to 2023, the market size of the ready-made tea shop industry reached 247.3 billion yuan, with a compound annual growth rate of 25.2%, and is expected to reach 538.5 billion yuan by 2028, with a compound annual growth rate of 15.4%. Among them, from 2024 to 2028, the market for ready-made tea shops in second-tier cities, third-tier cities, and fourth-tier cities and below is expected to grow at a compound annual growth rate of 15.0%, 18.0% and 15.0%, respectively.
In addition, since 2023, a new round of consumption recovery has been built on the basis of rational consumption, and the catering consumption market has also paid more attention to the "quality-price ratio". The high quality-price ratio inevitably means that the high cost should be digested with ultra-high efficiency, and the scale effect and cost advantage of the chain brand are highlighted, which is reflected in the continuous acceleration of the chaining of China's catering market.
This also means that the penetration rate of ready-made tea shop chain brands will continue to grow.
According to data from Frost & Sullivan, in 2023, the market share of ready-made tea chain brands in China's ready-made tea shop market was 64.7%, and this figure is expected to increase to 73.5% by 2028.
On the basis of chain operation, Chabaidao focuses on the small store model and takeaway business, which has more cost advantages and leverages more young consumers, which can not only meet the needs of consumers in terms of quality and price ratio, but also better guarantee the growth of business performance.
The small store model can save store costs to a great extent, with lower expenses in terms of rent, decoration, and personnel costs, and at the same time can support takeaway business and window pick-up to improve operational efficiency. Among the Chabaidao stores, 44.3% of the stores are between 30 and 49 square meters, and 42.8% are between 50 and 100 square meters.
It is also worth mentioning that Tea Baidao has achieved a "human" type of competition through digital marketing, which is deeply loved by young people.
An intuitive example is that Tea Baidao has established an absolute advantage on the Douyin platform, and Douyin live broadcast has won the first place in many industries such as "ranking first in the national group buying list with goods", "GMV of live broadcast of tea drinks", and "brand special conversion rate". Among them, on March 10, 2023, the GMV of its Douyin live broadcast exceeded 100 million yuan in a single day, and the number of fans increased by about 230,000 in a single day, setting a new GMV record for the special live broadcast of the Douyin life service brand.
At the same time, the number of members of Chabaido is growing rapidly. In the fourth quarter of 2023, the number of active members reached 20.4 million, and the repurchase rate of members reached 35%, which is higher than the industry average.
Second, strong supply chain support.
Behind the business model, Chabaidao also has a strong supply chain system as the underlying support, which can expand rapidly and maintain strong profitability. If a forward-looking business model brings growth, a strong supply chain brings certainty.
Specifically, Chabaidao has formed an industry-leading national supply chain capability, and plans to continue to optimize this capability and promote a complete layout.
At present, Chabaidao has established a nationwide warehousing and logistics network through self-management and third-party cooperation to achieve high-frequency and timely distribution services, and ensure the supply of fresh and high-quality materials with the help of digital empowerment such as the establishment of an order management system (OMS) and a transportation management system (TMS).
At the same time, Tea Baidao has deepened the layout of the production area, strengthened the "last mile", and created a "resource + technology" supply chain system.
As of 2023, Chabaidao has directly signed procurement agreements with high-quality fruit producing areas across the country for some core fruits, such as peaches, Tainong mangoes, summer black grapes, etc., and strengthened cooperation with leading suppliers around core raw materials such as dairy products, tea, and frozen freshly squeezed juices, so as to lock in high-quality production areas and supply of upstream raw materials.
The prospectus also shows that Chabaidao will further explore the national high-quality production areas, increase the category and proportion of directly harvested fruits, and plan to carry out counterpart support programs (such as charitable funds or other charitable projects) for fruit producing areas with large procurement scale, so as to strengthen cooperation with local suppliers and support local farmers and local economic development.
Looking forward to the future, even though the products, models, prices and store forms of Chabaidao may be copied or imitated, the construction of the supply chain will not be achieved overnight and will take a long time to precipitate. This will directly determine the competitiveness and performance sustainability of Chabaidao in the future competition.
3. Conclusion
In short, the listing of Chabaidao is not only an affirmation of its past achievements, but also a new starting point for the brand to move towards higher goals.
From the perspective of valuation, in 2023, Chabaidao has successfully received a capital injection of 970 million yuan, led by Orchid Asia, followed by many well-known investment institutions such as Zhengxin Valley, Grassroots Zhiben, CICC, and Tomato Capital, which confirms the capital's high recognition of Chabaidao and the affirmation of its business model.
The favor of capital provides strong financial support for the company, and also provides a solid foundation for the implementation of its expansion plan and market strategy.
After listing, Chabaidao is expected to use the power of the capital market to further optimize its operating model, strengthen brand building, improve the quality of products and services, and constantly refresh its performance record, so as to maintain its leading position in the fierce market competition. This deductive path may drive the company's value curve upward, and it is worth paying more attention to the investment.