Producer: Sina Finance Listed Company Research Institute
Author: New Consumption Advocate / Mu Yu
The chain coffee seems to be "rolling" and not moving.
According to incomplete statistics from One View Business, in March 2024, 20 domestic chain coffee brands opened a total of 592 new stores, a year-on-year decrease of 33.9%, which is the lowest number of stores opened since March 2023.
As the market calms down, Tims China announced its fourth quarter and full year 2023 results. According to the financial report data, the company achieved a total revenue of 391 million yuan in the fourth quarter, an increase of 29.8% over 2022. The annual revenue was about 1.576 billion yuan, a significant increase of 55.9% year-on-year.
The problem of loss is still unsolved. During the reporting period, Tims Tianhao China's net loss reached a new high of 876 million yuan, an increase of 18.0% year-on-year. Net loss in the fourth quarter was $311 million, compared to $223 million in the same period in 2022, and the adjusted net loss for a single quarter was approximately $118 million, an increase of nearly 10 percentage points from the previous quarter. From 2019 to 2023, the company's cumulative net loss has exceeded 2.2 billion yuan.
The speed of store expansion has significantly lagged behind The adjusted EBITDA margin decreased year-on-year
Behind the increase in income but not profit, there is a self-operated model that is difficult to achieve both scale and profit.
According to the data of previous financial reports, from 2021 to 2022, Tims Tianhao China will mainly rely on the expansion of self-operated stores. From the first quarter to the third quarter of 2021, the quarter-on-quarter growth rate of its self-operated stores remained stable at more than 30%. Until the third quarter of 2022, more than 90% of the company's stores are self-operated, and the proportion of contribution to the total revenue of the current period remains around 95%.
Although it will be fully opened to franchise in 2023, self-operated stores are still the "main force" of Tims Tianhao China. During the reporting period, the company added 295 net new stores, of which 82 were self-operated stores. As of December 31, 2023, the number of self-operated stores in Tims China accounted for approximately 69.0% of the total number of stores, and the revenue from self-operated stores accounted for approximately 89.2% of the total revenue.
However, relying on the self-operated model also means that there is a need for heavy asset investment, and the cost of raw materials, rent, and labor remains high. In 2023, the cost of food and packaging in Tims Tianhao China will be approximately RMB493 million, the rental and property management fees will be approximately RMB296 million, and the total salary and benefits of employees will be RMB311 million. If the depreciation expense of fixed assets is included, the total operating cost of the company's self-operated stores reached 1.239 billion yuan, accounting for nearly 80% of the total revenue.
From 2019 to 2022, the net cash outflow generated by Tims China's operating activities was 77 million yuan, 146 million yuan, 245 million yuan and 287 million yuan respectively, showing an upward trend year by year. In 2023, the company's net cash flow from operating activities will remain negative, narrowing by 31.7% year-on-year to RMB196 million.
The long-term "bleeding does not stop", to a certain extent, limits the speed of Tims's staking in China. Combined with the financial report and publicly disclosed data, from the first quarter to the fourth quarter of 2023, the company added 31, 52, 63 and 149 net new stores respectively, and the total number of stores in operation by the end of the year was 912.
In comparison, Luckin Coffee, Cudi Coffee and Starbucks China added 8,034, 6,977 and 885 net new stores during the year, respectively, and the total number of stores in operation was about 17.78 times, 7.75 times and 7.65 times that of Tims Tianhao China. The rising rookie NOWWA Coffee and Manner Coffee, which takes the boutique route, will also successfully cross the 1,000-store mark in 2023.
From January to March 2024, Tims Tianhao China opened 13, 14 and 5 new stores respectively, with the lowest growth rate among many competitors. A total of 32 new stores were added in the first quarter, which is not even half of the lucky coffee under Mixue Bingcheng, and it is not the same as the grand occasion of Luckin Coffee's more than 2,100 new stores.
In terms of single-store operating performance, Tims Tianhao China's performance is not outstanding. In the fourth quarter of 2023, the company's self-operated store same-store sales increased by only 2.5%, an improvement of 9.6% year-over-year, but still not recovered to the same level as the same period in 2021, and the adjusted self-operated store EBTIDA margin was approximately 4.6%, down 2.9% sequentially and slightly down 0.1% from the fourth quarter of 2022.
Comparing the core indicators of Luckin Coffee, in the second quarter of 2023, the gap between the same-store sales growth rate of the two self-operated stores once narrowed to 0.4%. After entering the second half of the year, Tims Tianhao China fell behind again, and the same-store sales growth rate in the reporting period was 10-20% lower than that of Luckin Coffee. In the fourth quarter of 2023, Luckin Coffee's self-operated store operating margin was approximately 13.5%, which was approximately 8.9 percentage points higher than Tims China's adjusted EBITDA margin of self-operated stores, and the first time since the second quarter of 2021 that the difference between the two parties fell to less than 10%.
Cross-border KA cooperation, taking over the Internet celebrity fried chicken, the market value evaporated by 87%, less than a fraction of Luckin
Or in order to keep up with the pace of peers as soon as possible, Tims Tianhao China has found another way. In addition to opening partners to join, it also adopts the KA (Key Account) enterprise cooperation model, and opens cafes into large supermarkets, snack shops, real estate agents, gas station convenience stores and other scenes.
By the end of 2023, the company has jointly developed 149 Sinopec Yijie convenience store X Tims Express fusion stores and 2 BESTORE X Tims Express fusion stores with KA franchise partners. According to its official website, Tims Tianhao China also has 12 21st Century Real Estate X Tims Express fusion stores and 3 Haier Three-winged Bird X Tims Express fusion stores. Based on this simple calculation, KA franchise stores account for more than 60% of the total number of franchised stores.
However, the "shop-in-shop" format is highly susceptible to fluctuations in the flow of customers in offline retail outlets, with a low degree of overlap in the target customer group, relatively limited business space to provide differentiated hot food services that require kitchens, and other food and beverage options in supermarkets, convenience stores, and snack stores may also compete directly with the products offered in stores.
According to public reports, Tims Tianhao China reached a cooperation with METRO China in 2021, and originally planned to open at least 9 stores in 6 cities. At present, there are only 4 METRO stores listed on the official website, covering three cities: Nanjing, Chengdu and Langfang. It can be seen that it is still unknown how much incremental cross-border cooperation can actually bring.
In addition, Tims Tianhao China is also ready to test the fried chicken business. In March 2023, the company, with the help of its major shareholder Descartes Capital, took over the exclusive rights and franchise rights of the American online celebrity fried chicken chain brand Popeyes in Chinese mainland and Macau.
At present, it seems that the progress of the new business is slow, and it is in the early stage of exploration for the time being. According to the statistics of Narrow Door Restaurant, Popeyes has only opened 12 self-operated stores in the past 13 months, of which 11 are located in Shanghai and one in Hong Kong. Tims estimates that Popeyes' stores will grow to 1,700 in the next 10 years, with an average of 3-4 new stores opening every week.
However, the synergistic effect of coffee with fried chicken is debatable. Popeyes' previous two entries into China have failed, and its products are not adapted to the Chinese market, and its marketing has frequently overturned. According to the financial report data, Popeyes' total revenue in 2023 will only be 15.761 million yuan, and the net loss will be about 33.196 million yuan. Whether Tims Tianhao China can turn the situation around after taking over remains to be seen by time.
It's just that the patience of the capital market has basically run out. After backdoor listing on the NASDAQ in September 2022, Tims Tianhao China's stock price has been "falling endlessly". It has been hovering in the $1 range since November 2023, and the lowest fell to $0.84 per share in April this year, directly facing the risk of delisting. As of press time, the company's total market capitalization is only $177 million, which is more than 87% of its valuation at the time of listing, and only about 2.9% of the market value of Luckin Coffee in the pink sheet market.
（来源：wind）