Tuyere financial reporter Zhao Chong
Recently, Xiang Piaopiao, the "first share of milk tea", released its 2023 financial report.
According to the financial report, 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%.
It is worth noting that Xiangpiaopiao's operating income has declined year-on-year for three consecutive years (2020 to 2022), and its year-on-year increase in revenue and net profit in 2023 is based on the company's increased marketing: 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.
The brewed milk tea is no longer fragrant
In 2005, Xiangpiaopiao was established, and in the same year, the first cup of Xiangpiaopiao brewed milk tea was launched. Three years after its establishment, Xiang Piaopiao sold 300 million cups a year, and six years after its establishment, Xiang Piaopiao sold 1 billion cups a year. In 2020, Xiangpiaopiao sold a total of 13 billion cups of milk tea, claiming that "cups can circle the earth 40 times when connected".
At present, the company has two major business segments: brewing products and ready-to-drink products, and the brewing business revenue based on "Xiang Piaopiao" classic series, "Ruxian" oat milk tea, "Xian coffee" oat latte and other products was 2.686 billion yuan, a year-on-year increase of 9.37%; The operating income of ready-to-drink business such as Meco's "cup juice tea", "Lan Fang Yuan" Hong Kong-style tea, and "Xiang Piaopiao" ready-to-drink milk tea was 901 million yuan, a year-on-year increase of 41.16%.
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.
Jiang Han, a senior researcher at Pangu Think Tank, said in an interview with a financial reporter from the tuyere, "When the domestic brewed drink market was in its infancy, due to the easy blending, instant and effective, the brewed tea represented by Xiangpiaopiao was more popular, but with the development of the market, China has entered the ready-made blending market, and the market advantage of brewed tea has been decreasing, and it has become very difficult for brewed tea drinks such as Xiangpiaopiao to achieve sustainable development." ”
Selling expenses are 3 times net profit
In order to cater to the trend of health, in 2023, Xiangpiaopiao will drive the revenue of the brewing business to rise by launching new products such as "Ruxian" handmade oat milk tea, "Xian Coffee" handmade oat latte, "CC lemon liquid" and "brown sugar ginseng ginger tea", but the growth rate of the brewing series is much lower than that of the ready-to-drink series.
Judging from the past three years, the performance of the ready-to-drink series is not ideal: from 2020 to 2022, the ready-to-drink business achieved revenue of 657 million yuan, 642 million yuan and 639 million yuan respectively, not rising but falling. Even if it increases to 901 million yuan in 2023, there is still a gap from the volume of 1.005 billion yuan in 2019.
In 2023, Xiangpiaopiao will continue to increase its investment in ready-to-drink series such as Meco juice tea and Lan Fong Yuen Hong Kong-style tea. For example, in order to promote the rapid development of ready-to-drink series, Xiangpiaopiao has spared no effort in marketing and promotion. During the reporting period, Meco Juice Tea became the chief partner of Hunan Satellite TV's "Chinese Restaurant" program, and Lan Fangyuan carried out in-depth cooperation with Hunan Satellite TV's "Unlimited Graduation Ceremony" and "Brother Who Overcame Difficulties" in the third season.
However, during the reporting period, compared with the gross profit margin of 44.68% of the brewing business, the ready-to-drink business was only 18.41%, which lowered the overall gross profit margin.
Xiang Piaopiao said, "The ready-to-drink business is still in the market investment period, and it still needs more time and resources, and the company's single product will continue to exist for a period of time." If there is a significant change in the brewed milk tea market, the company's business situation may be affected."
At the same time, it can be seen from the annual report that high marketing investment has always been one of the problems of Xiangpiaopiao, relying on advertising out of the circle of Xiangpiaopiao's formation of a certain dependence on marketing, since 2019, Xiangpiaopiao's marketing expenses have remained high.
From 2019 to 2023, Xiangpiaopiao's sales expenses will be about 967 million yuan, 714 million yuan, 740 million yuan, 561 million yuan and 860 million yuan respectively. During the same period, the net profit attributable to the parent company of Xiangpiaopiao was about 347 million yuan, 358 million yuan, 223 million yuan, 214 million yuan and 280 million yuan respectively. It can be seen that from 2019 to 2023, the sales expenses will be 2.79 times, 1.99 times, 3.32 times, 2.62 times, and 3.07 times of the net profit attributable to the parent company, respectively.
In contrast, from 2019 to 2023, Xiangpiaopiao's R&D expenses will be about 31.0254 million yuan, 23.4229 million yuan, 28.0476 million yuan, 28.306 million yuan and 32.6008 million yuan, accounting for only about 3.2%, 3.2%, 3.8%, 5.0% and 3.8% of the sales expenses in the same period.
Zhu Danpeng, an analyst of China's food industry, said in an interview with a financial reporter that Xiang Piaopiao has been doing transformation in recent years, but the overall effect is not very obvious, and the entire sales cost is high.
Decentralization of family businesses
During the period from 2020 to 2022, in the face of three consecutive years of declining revenue, the "first share of milk tea" had to start to change, including the establishment of a ready-to-drink sales team and the adjustment of management.
At the end of 2023, Jiang Jianqi, chairman and general manager of the company, applied for resignation as general manager of the company, and appointed Yang Dongyun, who has worked in many FMCG companies such as Procter & Gamble and White Elephant, as the general manager of the company. In March this year, Jiang Jianbin of the founder's family applied for resignation as director and vice chairman of the company for personal reasons. In the eyes of the industry, the successive resignations of the Jiang brothers mean that Xiang Piaopiao is developing in the direction of professional managers to manage the company. However, the change of leadership when the business needs to exert force has also caused the market to worry about its development prospects.
At present, Xiangpiaopiao is facing fierce competition, in addition to peer pressure, it is also facing the squeeze of market share by ready-made tea beverage companies.
According to iiMedia Consulting, the size of China's solid beverage market increased from 78.00 billion yuan in 2014 to 88.56 billion yuan in 2019, and may exceed 100 billion yuan in 2024, but the development rate is relatively slower than that of other soft drink segments: Zhiyan Consulting data shows that the brewed milk tea market is far behind the ready-made milk tea market in terms of scale and growth rate.
In contrast, the ready-made tea drink in the milk tea industry with the same volume as Xiangpiaopiao has become a climate, and the national new tea beverage market size is expected to reach 149.8 billion yuan in 2023, and the market size is expected to exceed 200 billion yuan in 2025. On April 15, 2024, Chabaidao, which "sells 1 billion cups a year", announced that the IPO intends to issue 148 million shares globally at an issue price of HK$17.5, and is expected to be listed on the main board of the Hong Kong Stock Exchange on April 23. Previously, Nai Xue's tea had been listed on the Hong Kong Stock Exchange.
In the face of the rapid development of new tea drinks such as Nai Xue's tea, Hey Tea, and Mixue Bingcheng, Xiang Piaopiao has become inadequate.
In November 2017, Xiangpiaopiao sprinted to IPO success, becoming the "first stock of China's milk tea", with a market value of nearly 14 billion yuan, as of the close of April 19, Xiangpiaopiao's market value was only 6.974 billion yuan, nearly half of which evaporated from the peak, and the stock price also fell from the peak of 37.52 yuan/share to 16.98 yuan/share.