Tea Baidao officially landed on the Hong Kong Stock Exchange yesterday, as the second stock of the new tea beverage track and the largest IPO of the Hong Kong Stock Exchange in 2024, it can be said that it has attracted much attention
In particular, the new tea brands standing in line behind and waiting to be listed, such as Mixue Bingcheng, Gu Ming, Shanghai Auntie, Chayan Yuese, and Bawang Tea Ji are all looking forward to it, hoping that Tea Baidao can bring good news
Naturally, as a consumer race belt, the new tea drink is currently one of the branches with the strongest growth momentum and the largest demand, and hot money is also waiting for a step
However, on the first day of the listing of Chabaidao, it poured a basin of cold water on the industry and the capital market! To be exact, a basin of ice water.
One day down and three years of profits
There are retail investors with a floating loss of HK$4.7 million
In recent years, in the consumption track, especially in the catering industry, the new tea beverage industry can be said to be the one with the best growth momentum. In the face of strong growth momentum, the leading brands are lining up to run to the 10,000-store plan, and together they have created a tea boom
Naturally, from the perspective of the industry, from the upstream supply chain of ingredients and packaging, to the franchise model, and then to the terminal retail, it can be said that the new tea beverage industry has also run out of a very mature and diversified business model, and therefore, the tea market has also become a sweet spot in the eyes of the primary market
Especially in 2024, a large number of leading brands have also begun to line up to prepare to set foot in the capital market and accumulate grass for subsequent expansion.
Yesterday, Tea Baidao, which was established in 2008, successfully landed on the Hong Kong Stock Exchange, becoming the second new tea brand to be successfully listed after Nai Xue's tea. and with a total amount of nearly HK$2.6 billion raised, it will become the largest IPO of Hong Kong stocks since 2024.
The whole industry is also looking forward to the listing of Tea Baidao, which can bring new confidence to the industry, but the reality is very cruel, waiting for Tea Baidao on the first day of listing is actually broken, and the intraday decline once exceeded 35%, almost erasing the net profit of the past three years.
As of yesterday's close, Chabaidao closed down 26.86%, with a total market capitalization of about HK $18.91 billion.
Compared with the issue price of HK$17.5 per share, the market value evaporated by nearly HK$7 billion on the first day.
As the largest IPO of Hong Kong stocks this year, as well as the second share of tea drinks, but in fact, the capital market does not seem to be enthusiastic about the listing of Tea Baidao, and according to media reports, when the new shares of Tea Baidao were subscribed, there was an undersubscription situation.
At the same time, according to the disclosure of Chabaidao, the winning rate of retail investors in this stock issuance is 100%. In other words, as long as retail investors make new deals, they can get distribution.
According to the announcement of the distribution results of Chabaidao, one person subscribed for 1 million shares, which also means that the investor's book loss reached 4.7 million Hong Kong dollars.
As of press time today (April 24), Chabaidao fell another 8.5%, and the total market value fell to HK $17.3 billion.
Obviously, on the first day of the listing of Tea Baidao, not only failed to bring confidence to the market, but it was more like a hailstorm
What is the color of tea Baidao?
Then the question arises, what is the reason for the cold incident in the listing? Let's go back to the tea Baidao itself
Founded by Wang Xiaokun and Liu Weihong, the first store opened in Chengdu, Sichuan Province in 2008, with franchise as the main development model. As of April 5, 2024, Chabaidao has a total of 8,016 stores in China, including 6 directly operated stores and 8,010 franchised stores
In terms of positioning, Tea Baidao avoids the high-end market of Naixue and Heytea and takes the large-scale cost-effective route of Mixue Bingcheng, but is in the most competitive mid-price segment, with the successful entry into the capital market, it is obvious that it can actively seize the consumption mind of this price segment.
According to the prospectus data, from 2021 to 2023, the revenue of tea Baidao will be 3.64 billion, 4.23 billion and 5.70 billion yuan respectively, with a compound annual growth rate of 25.1%.
In terms of profitability, from 2021 to 2023, the company's gross profit will be 1.30 billion, 1.46 billion and 1.96 billion yuan respectively, with a compound annual growth rate of 22.9%, while the gross profit margin will remain at 34.4%. Compared with the gross profit margin of 29.7%, it is much higher.
During the reporting period, the adjusted net profit of Chabaidao was 900 million yuan, 970 million yuan and 1.26 billion yuan respectively, with a compound annual growth rate of 18.2% in net profit, and the adjusted net profit margin in 2023 reached 22%, significantly exceeding the industry average.
From the perspective of store structure, by the end of 2023, the number of Chabaidao stores in first-tier, new first-tier, second-tier, third-tier, fourth-tier and below cities will account for 10.6%, 26.9%, 20.9%, 19.4% and 22.2% respectively.
Judging from the indicators as a whole, Tea Baidao still has good growth, so why doesn't the secondary market buy it? We need to find out at a deeper level.
The capital market can't drink a hundred ways of tea
What's the problem?
As we all know, the current tea market is accelerating its expansion, as well as accelerating its sinking, but the expansion rate of Tea Baidao seems to be slowing down, and the prospectus data shows that from 2020 to 2023, the annual growth of tea Baidao stores will be 1485, 2844, 1817, and 1441 respectively, compared with 2021, the increase in the number of stores in 2023 will be nearly half.
At the same time, the sinking speed is also slow, in the store structure, the proportion of cities below the four-line machine of tea Baidao is 22.2%, which is obviously inconsistent with the current accelerated sinking of the tea industry.
Of course, more importantly, the construction of the supply chain of Chabaidao is significantly lagging behind its peers such as Mixue Bingcheng. As we all know, today's new tea brand side is a typical TO B business, that is, in addition to the profit model of franchise fees, the supply chain of ingredients is also the most optimistic profit direction.
The industry also generally believed that the supply chain of the tea industry was king.
However, according to the data of the tea Baidao prospectus, it is not difficult to see that today Tea Baidao is still highly dependent on third-party suppliers. Tea Baidao mentioned in the prospectus that the company works with 333 suppliers, including dairy products, ingredients, packaging materials, and even fruit juices.
In other words, that is, Cha Baidao first purchases raw materials and packaging materials from suppliers, and then sells them to franchisees, earning the price difference.
According to the prospectus data, about 60% of the income should be used every year to purchase dairy products, tea, juice, etc. from suppliers.
The greater value of the tea brand lies in not only holding the supply chain in its own hands, but also reducing the cost of franchisees as much as possible through the construction of the full-link supply chain, so as to create more profits for franchisees and ensure the stability of franchisees.
At present, in the entire business system of Tea Baidao, there are still a large number of roles in making price differences, and some media quoted franchisees as saying that the materials of Tea Baidao are relatively expensive, and the basic performance of 100,000 yuan needs to match 40,000 yuan of payment.
According to the data in the prospectus, the annual net closure rate of Chabaidao has reached about 10%. And this is precisely where the shortcomings of tea Baidao lie.
In the prospectus, Chabaidao also said that about 51% of the net funds raised by Chabaidao will be used to improve the overall operational capacity and strengthen the supply chain.
Obviously, compared with peers such as Mixue Bingcheng, Chabaidao is half a beat slower in terms of supply chain construction.
Tea Baidao has laid a hail on the industry
Peers trembled
From a macro point of view, there is still a lot of room for growth in the tea market, and the "Research Report on China's New Tea Market Prospects and Investment Opportunities" released by the China Business Industry Research Institute shows that the market size of the mainland's new tea shop industry has increased from 66.8 billion yuan in 2017 to 202.9 billion yuan in 2022, with a compound annual growth rate of about 24.9%.
The market share of the new tea shop industry increased from 58.0% in 2017 to 66.4% in 2022.
Other data also show that the scale of the new tea consumption market is expected to reach 149.8 billion yuan in 2023, recovering to a three-year compound growth rate of nearly 20%. By 2025, the scale of the domestic consumer market is expected to further expand to 201.5 billion yuan.
However, from the perspective of the industry, the industry is seriously homogeneous, the competition is still fierce, and the supply chain construction is undoubtedly the key to how to reflect the differentiated competitiveness of brands.
Today's increasingly discerning capital markets are paying more and more attention to this differentiated competitiveness. For example, on the first day of listing on June 30, 2021, the first share of Nai Xue's tea, the first share of New Tea Drink, also fell by more than 13%, and the cumulative decline since listing has exceeded 88%.
From another point of view, whether it is Nai Xue's tea or tea Baidao, although the IPO is in the front, at present, it seems that it is difficult for them to become industry benchmarks.
At present, the market pattern of new tea drinks is gradually stabilizing, and the data shows that the top five players will occupy a total of about 40.2% of the market share in 2023.
This also means that the IPO of this industry is also accelerating the curtain, as of now, Mixue Bingcheng, Gu Ming, Shanghai Auntie, Chayan Yuese, that is, Bawang Chaji, etc. are already on the way to IPO.
Naturally, Nai Xue's tea and tea Baidao are cold in the capital market, which also casts a shadow on the entire industry. It will inevitably affect the smoothness of the subsequent listing of peers.
Shigowski ©️
Author|小柴贰号
Edited by Tan Song