On the evening of April 17, "the first share of milk tea" Xiang Piaopiao released its 2023 financial report.
Last year, the company's operating income was about 3.625 billion yuan, a year-on-year increase of 15.9%, and the net profit attributable to the parent company was about 280 million yuan, a year-on-year increase of 31.04%. One day after the release of the earnings report (April 18), Xiangpiaopiao's share price closed at 17.66 yuan per share, up 4.5%.
Last year, Xiangpiaopiao's sales expenses reached 860 million yuan, a new high in four years, a year-on-year increase of 53.42%, and the sales expense ratio also rose to 23.73%. According to the company, it was mainly due to the increase in advertising and marketing expenses, as well as the establishment of a ready-to-drink product sales team, and the increase in manpower expenses.
In recent years, new tea brands such as Mixue Bingcheng and Tea Baidao have risen successively, which has had an impact on brewing milk tea, and Xiangpiaopiao has pinned its growth hopes on bottled beverages.
The brewed milk tea is no longer fragrant
"More than 700 million cups are sold a year, and the cups can circle the earth twice", with this advertising slogan, convenient, delicious and cost-effective fragrant Piaopiao milk tea has entered the streets and alleys of the country and has become the favorite of young people. Since 2012, Xiangpiaopiao has maintained the first market share in the cup brewed milk tea segment for 12 consecutive years, and has played the slogan of "selling 1.3 billion cups a year" when the sales are high.
At present, the company has two major business segments: brewing products and ready-to-drink products, with revenue of 2.686 billion yuan and 901 million yuan respectively last year, accounting for about 74% and 26% respectively.
Brewing milk tea is still the pillar of Xiangpiaopiao's performance, but it has encountered growth bottlenecks in recent years.
Last year, the sales volume of brewed products was 38,171,200 cases, with 30 cups per box, which calculated that it sold 1.145 billion cups a year, which is about 150 million cups less than 1.3 billion cups a few years ago.
In fact, although the sales of brewed products last year were difficult to return to their previous peaks, they have rebounded significantly compared with the previous year. From 2020 to 2022, the sales volume of the company's brewing business was 45.5909 million boxes, 42.9216 million boxes, and 35.1776 million boxes respectively. Affected by this, the company's operating income declined accordingly in the corresponding three years, which were 3.761 billion yuan, 3.466 billion yuan and 3.128 billion yuan respectively.
Affected by changes in consumption trends, a bag of milk tea powder and a bag of coconut fruit were mixed with hot water earlier, and consumers only needed 3.5 yuan to drink a warm and hot drink in winter. Nowadays, with the development of takeaway platforms and the emergence of new freshly made tea drinks, consumers have more healthier and delicious alternatives, and consumers in first- and second-tier cities are gradually abandoning brewed milk tea powder products with non-dairy creamer, and the main market for Xiangpiaopiao is concentrated in third- and fourth-tier cities.
In order to cater to the trend of health, Xiangpiaopiao launched two new products, "Ruxian" handmade oat milk tea and "Xian Coffee" handmade oat latte, last year. From the perspective of marketing actions, the company's brewing products were promoted in Hunan Satellite TV's "Endless Sound", "Time Concert", "Little Chinese New Year's Eve Party", "Mid-Autumn Night", "New Year's Eve Party" and other programs, which also led to a new high in sales expenses in the past four years, reaching 23.7%, a year-on-year increase of 5.8 percentage points.
Water Hibiscus/photo
Urgently looking for a second growth curve
In April 2023, Xiangpiaopiao disclosed a stock option incentive plan, planning to take out 13.57 million stock options (3.30% of the total share capital) to motivate a total of 16 core management and technical personnel of the company, excluding independent directors and shareholders holding more than 5% of the shares, spouses, parents, and children.
The announcement pointed out that the incentive plan reserves to grant part of the stock options, and the performance indicators of Xiangpiaopiao in the next two years are used as the assessment criteria. Based on the operating income in 2022 (3.128 billion yuan), the growth rate of Xiangpiaopiao's operating income in 2024 will not be less than 35%, and the growth rate of operating income in 2025 will not be less than 50%.
If this is calculated, Xiangpiaopiao's revenue target this year will not be less than 4.223 billion yuan (a year-on-year increase of not less than 16.5%), and next year will not be less than 4.692 billion yuan. In the past four years, the company's revenue growth rates were -5.46%, -7.83%, -9.76% and 15.9% respectively. If you want to achieve your goal, you have to work harder.
There is no doubt that compared with brewed tea, Xiangpiaopiao ready-to-drink products have more room for performance growth, shouldering the company's mission of "second growth curve".
Last year, the total revenue of the Xiangpiaopiao ready-to-drink segment (including bottled milk tea, Meco juice tea, and Lanfangyuan frozen lemon tea) was 901 million yuan, a year-on-year increase of 41.16%.
The financial report pointed out that Lanfangyuan Frozen Lemon Tea, the main product of the ready-to-drink sector, gradually promoted the listing and distribution, and achieved pre-tax sales revenue of more than 200 million yuan in the first year of listing. Last year, Lanfangyuan's frozen lemon tea product implantation appeared in variety shows such as "Brother Who Overcame Difficulties" and "No Limit Graduation Ceremony", and the advertising expenses during the reporting period were 221 million yuan, an increase of 88% year-on-year, which is also one of the main reasons for the company's high sales expenses.
Another major reason is the formation of the ready-to-drink product sales team, which has led to an increase in manpower expenditure, and Xiang Piaopiao plans to separate the channel distributors of ready-to-drink products from the brewed products. In the second quarter of last year, Jiang Jianqi, chairman of the company, led a team to build ready-to-drink business channels, and planned to improve systematic operation capabilities in about three years.
For a long time, nearly ninety percent of Xiangpiaopiao's sales revenue comes from dealer channels. Last year, the company added a total of 199 dealers (including 406 new dealers and 207 replacements). As of the end of 2023, the total number of dealers in the country is 1,531.
The reporter noticed that Lanfangyuan frozen lemon tea began to appear in the display cabinets of convenience stores such as FamilyMart, Lawson, and Xishiduo last year, which shows that Xiangpiaopiao's offline channel actions also include the launch of beverage display cases. Summer is the high-frequency consumption season for ice drinks, and the freezer is the best channel to reach the end consumer. "No display, no sales" is a recognized market law in the FMCG beverage industry, so beverage giants such as Nongfu Spring, Wahaha, and Uni-President are competing for freezer resources. According to media reports, the battle for freezer delivery has heated up. This also means that in the future, Xiangpiaopiao will spend more money on related aspects.
At the end of 2023, Xiang Piaopiao has undergone a major personnel change. Jiang Jianqi, the founder and chairman of the company, resigned as general manager, and the rest of his positions remained unchanged. He was the project manager of Guangzhou Procter & Gamble, and successively served as the vice president of Yida Group Asia Pacific, the senior vice president of Super 8 Hotel, and the executive president of White Elephant Food Group.
This is the first time that the general manager position has been changed since the establishment of Xiang Piaopiao, and there is a view in the market that the introduction of professional managers is a positive signal for Xiang Piaopiao's performance improvement.
According to Oriental Wealth data, Yang Dongyun has increased his holdings of Xiangpiaopiao shares several times this year and has become the fourth largest individual shareholder of the company, with a total of 21.017 million shares, accounting for 5.12% of the total share capital.
However, whether the replacement of the general manager can enable Xiang Piaopiao to break through the bottleneck period and complete the future performance target remains to be tested by the market.