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With the increasing consumer demand for healthy drinks, the new tea drink market is booming. Tea brands have launched innovative flavours and marketing strategies in an effort to capture market share. At the same time, new tea brands are also emerging, intensifying the fierce competition in the market. On June 30, 2021, Nai Xue's tea was listed on the Hong Kong Stock Exchange, officially becoming China's "first stock of new tea drinks", providing ideas for tea drinks and even Chinese tea culture to go global. After nearly three years, China's new tea drink track has finally ushered in the "second share"!
On April 23, 2024, Sichuan Baicha Baidao Industrial Co., Ltd. (hereinafter referred to as "Chabaidao") was listed on the main board of the Hong Kong Stock Exchange, with an issue price of HK$17.5 per share, issuing 148 million shares and raising a total of HK$2.586 billion. So far, after Nai Xue's tea, Tea Baidao has become China's "second share of new tea drinks".
According to Qichamao, Sichuan Baicha Baidao Industrial Co., Ltd. was established on December 31, 2020. The registered capital is RMB 132,987,090, and the legal representative is Wang Xiaokun. The business scope includes: licensed items: food business (sales of pre-packaged food); Urban distribution and transportation services (excluding dangerous goods) (projects subject to approval in accordance with the law can only be carried out after approval by relevant departments, and specific business projects are subject to the approval documents or licenses of relevant departments).
However, Tea Baidao does not seem to be favored by capital, and it broke on the first day of listing, and within an hour of ringing the bell, the stock price of Tea Baidao fell all the way, and even fell by more than 30% in the intraday. As of yesterday afternoon, Chabaidao fell 35.89% to HK$11.22, with a turnover of about HK$111 million. As of the close of the afternoon, Chabaidao still maintained a decline of 26.86%, closing at HK$12.8 per share, with a circulating market value of HK$18.91 billion. (Note: "Breaking" of new shares means that the shares fall below the issue price on the day of issuance and listing).
According to the prospectus, from 2021 to 2023, the revenue of Tea Baidao will be 3.64 billion, 4.23 billion and 5.7 billion yuan respectively, with a compound annual growth rate of 25.1%. The company's gross profit was 1.3 billion, 1.46 billion and 1.96 billion yuan respectively, with a compound annual growth rate of 22.9%. From 2021 to 2023, the adjusted net profit of Chabaidao will be 900 million, 970 million and 1.26 billion yuan respectively, with a compound annual growth rate of 18.2% in net profit and an adjusted net profit margin of 22% in 2023. Judging from the fact that the stock price fell by more than 38.29% within one hour of listing, Chabaidao "evaporated" the total net profit of 2021-2023 almost in an hour.
Industry insiders said that the first day of the listing of tea Baidao is actually traceable, and the current fierce competition in China's new tea beverage track remains high, and in the process of competing for consumers and franchisees, some brands even rush to go public, which is easy to leave hidden dangers for follow-up capital support.
Looking back at the development of the new tea beverage industry from the "Tea Baidao IPO in Hong Kong":
——The new tea drink has entered the 3.0 era
After more than 30 years of development, the new tea drink has roughly experienced three stages of development: the era of tea drink 1.0 "tea + milk", that is, the rapid development stage of bubble tea in 1990 and before; In the era of tea drink 2.0 "tea + milk + fruit", mainly from 2012 to 2019, that is, the birth stage of new tea drinks, a large number of tea brands continued to iterate; At present, it has developed into the era of tea 3.0 "tea + milk + fruit + culture", during which capital has promoted the further rapid development of the industry, the epidemic has accelerated the industry reshuffle, and the development of the supply chain, the influx of talents, and the construction of digital operations have become the key factors for brand development.
-- The supply of new tea drinks in the market
In 2022, new tea drinks are still the sub-category with the largest number of stores among the mainland's ready-made beverages, accounting for 61.9%, compared with 65.5% in 2020. According to incomplete statistics, the total number of new tea stores in operation at the end of 2022 was about 486,000, an increase of more than 28% from 378,000 at the end of 2020.
-- Market demand for new tea drinks
According to the survey of "Generation Z" new tea consumers by National Business Daily and Huichen Co., Ltd., 30.5% of respondents listed fruit tea as their favorite type of tea; followed by milk tea, accounting for 27.6%; Milk cover tea ranked third, accounting for 16.4%.
In terms of market size, according to data from the China Chain Store & Franchise Association, the market size of new tea drinks in mainland China has increased from 42.2 billion yuan in 2017 to 100.3 billion yuan in 2021, with a compound annual growth rate of more than 20%. From 2020 to 2022, the growth rate of the market size fluctuated and declined due to the impact of the epidemic, and the preliminary estimate of the market size of new tea drinks in 2022 was 104 billion yuan, which was basically the same as that in 2021.
-- Investment and financing of new tea beverage brands
On June 30, 2021, Nai Xue's tea was officially listed in Hong Kong, becoming the "first stock of new tea drinks", with the stock code "02150"; On September 22, 2022, according to the information on the official website of the China Securities Regulatory Commission, the A-share listing application of Mixue Bingcheng Co., Ltd. has been accepted and the prospectus has been officially pre-disclosed, and it plans to land on the main board of the Shenzhen Stock Exchange, or it may become the second new tea brand to be successfully listed. In recent years, with the blessing of capital, the financing of new tea beverage brands has been emerging, and brands such as Shuyi Burning Fairy Grass and Shanghai Auntie have been favored by investment institutions.
According to the report of the Prospective Industry Research Institute, the growth rate of the new tea beverage market in mainland China from 2020 to 2022 fluctuated and declined due to the impact of the epidemic, and the preliminary estimate of the market size of the new tea drink in 2022 was 104 billion yuan, basically the same as in 2021. With the adjustment of epidemic prevention and control policies, after the second quarter of 2023, national consumption enthusiasm is expected to be ignited, and the market size of new tea drinks is expected to recover to 145 billion yuan in 2023, recovering to a three-year compound growth rate of nearly 20%. Combined with the historical growth rate, it is conservatively estimated that the market size of new tea drinks in the mainland is expected to exceed 250 billion yuan by 2028, with a compound growth rate of about 12% from 2023 to 2028.
Zhu Danpeng, an analyst of China's food industry, said that the core of future competition among tea companies lies in the integrity of the supply chain. Products can be copied, models can be copied, prices can be imitated, and stores can be cloned, but the supply chain is not something that can be copied overnight. In his view, in the future, only the leading enterprises will have the ability to carry out a complete layout of the supply chain, and the integrity of the entire supply chain determines the future sustainability of the enterprise.
Prospective Economist APP Information Group
For more research and analysis of this industry, please refer to the "Market Prospect and Investment Strategic Planning Analysis Report of China's New Tea Industry" by the Prospective Industry Research Institute.
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