Naixue’s tea (hereinafter referred to as Naixue) is one step closer to becoming “the first share of global tea”. Yesterday, information from the Hong Kong Stock Exchange showed that Naixue had passed the listing hearing of the Hong Kong Stock Exchange and disclosed the information set after the hearing. Through this IPO, Naixue is expected to add 1000 stores.
Today, xiaoshidai looked at the newly released 500 page post hearing data set of this new tea chain, which has risen rapidly in just six years, and found that it disclosed a lot of new information, including Naixue market share and 2020 annual performance, how to make profits, future store plans and key points, etc.
Naixue’s tea shop
Now, let’s take a look at them one by one.
The average is 43 yuan per order
According to the latest documents, Naixue is currently the second largest high-end tea shop brand, both in terms of retail sales and store size.
Naixue pointed out that at present, according to the average price of tea, China’s ready-made tea shops can be divided into three categories: high-end ready-made tea shops, middle end tea shops and low-end tea shops. As of December 31, 2020, there are about 3400 high-end ready-made tea shops, 141500 middle end tea shops and 203500 low-end tea shops.
Among them, the high-end spot tea shop is defined as the spot tea shop with an average price of no less than RMB 20, which is commonly referred to as “new tea”. These tea shops generally use high-quality and fresh ingredients to produce spot tea, while providing fashionable offline store space.
The division of high school and low end instant tea
In China’s high-end ready-made tea shop industry, the market concentration is relatively high. According to the information of insight consulting, in 2020, according to the total retail consumption of all products, the top five industry participants accounted for about 58% of the market share.
Among them, the largest participant in China’s high-end ready-made tea shop industry has about 27.7% of the market share, and Naixue’s flagship brand Naixue’s tea is in the second place, with about 18.9% of the market share. The rest of the top five players each have about 4% market share.
Market share of 5 high-end high-end tea chain stores in Chinese mainland
According to the total retail consumption in 2020, Naixue’s tea is the seventh largest brand in China’s current tea shop industry, with a market share of 3.9%.
As of December 31, 2020, according to the number of cities covered, Naixue tea has the most extensive network of high-end ready-made tea shops in China. According to the number of stores as of December 31, 2020, Naixue tea, which has 491 tea shops, is also the second largest high-end tea shop brand in China.
Three best selling tea drinks of Naixue in 2020
In addition, Naixue pointed out that in 2020, the average sales value of Naixue’s tea will reach 43 yuan per order, ranking first among China’s high-end ready-made tea chain stores (the industry average is about 35 yuan).
According to the number of customers’ orders in 2020, its three best-selling classic tea drinks are Baqi cheese strawberry, Baqi orange and Baqi cheese grape, accounting for 27.6% of the total sales of current tea drinks.
According to the information set after the hearing, the number of tea shops in Naixue increased from 44 as of December 31, 2017 to 491 as of December 31, 2020, and further increased to 556 as of the last practicable date.
In addition to the flagship brand “tea of the snow,” the company also operates another brand of tea shop brand, and has opened 64 tea shops in nine cities in Chinese mainland city.
Another sub brand of Naixue tea shop “taigai”
From the product point of view, Naixue’s tea focuses on providing a variety of ready-made tea drinks and baked products, while taigai mainly sells a series of classic milk tea and lemon tea drinks. In terms of customers, Naixue’s tea mainly attracts “more and more affluent urban people with larger age span”, while taigai focuses on “younger generation customers”, including more price sensitive students and young office workers.
Income and proportion of Naixue’s tea and taigai
“As a result, we are purposely pricing the tabletop products in a lower price range than Naixue’s tea. As of the last practicable date, the average price of tabletop products is about 16 yuan, while the average price of ready-made tea drinks provided by Naixue’s tea is 27 yuan. ” Naixue said its flagship tea shop contributed the majority of its revenue and is expected to continue to occupy the majority of its business in the near future.
Naixue Pro tea shop
In the future, Naixue plans to further expand its stores, especially in the first and second tier cities.
The company pointed out that as of December 31, 2020, it had 91 tea shops in Shenzhen; In contrast, there are only 22, 33 and 24 tea shops in Beijing, Shanghai and Guangzhou“ This clearly shows that we still have huge market opportunities to replicate our initial success in Shenzhen in other low penetration and attractive markets, including other first tier cities, new first tier cities and second tier cities. “
Naixue’s tea shop
It is worth noting that even if affected by the epidemic in 2020, the first break even period of Naixue tea is about 4 months, and the payback period of investment is 10.6 months. Industry data show that Chinese food brands usually reach break even and return on cash investment for the first time in 3-6 months and 15-20 months.
Next, “Naixue Pro” will become the main force of Naixue’s new tea shop.
“We plan to increase the scale of Naixue Pro tea shop. It is estimated that about 70% of the newly opened Naixue tea shops in 2021 and 2022 will be Naixue Pro tea shops.” Naixue believes that compared with Naixue’s tea standard tea shop, Naixue Pro tea shop is more efficient in terms of cost structure, which helps to improve the profitability of the shop.
Naixue Pro tea shop
First of all, Naixue explained that the initial investment cost of Naixue Pro is low“ This is mainly due to the removal of the on-site bakery area at the Naixue Pro tea shop, which eliminates the costs associated with purchasing baking equipment and recruiting, training and retaining additional staff. ” The company said that as of March 31, 2021, the average investment cost of opening each Naixue Pro tea shop was about $1 million, compared with $1.8 million for standard tea shops.
Secondly, Naixue said that because Naixue Pro tea shop has “advanced technology, simplified store layout and simplified operation process”, it can reduce the number of staff. In March 2021, the average number of clerks in the existing Naixue Pro tea shop was about 13, which was lower than the average number of clerks in Naixue tea standard tea shop in the same period of 21.
Previously, in November 2020, Naixue opened the first two Naixue Pro tea shops in Shenzhen. As of the last practicable date, the company has 60 Naixue Pro tea shops in major cities in China.
Net profit of 7.3 million in the first quarter of this year
Naixue’s annual performance in 2020 is also the latest.
According to the data set after the hearing, in terms of revenue, from 2018 to 2020, Naixue achieved revenue of 1.087 billion yuan, 2.502 billion yuan and 3.057 billion yuan respectively. According to the International Accounting Standards No. 17, Naixue will achieve a net profit of 62.17 million yuan in 2020.
Let’s look at the first quarter performance of this year.
According to the data set after the hearing, for the three months ended March 31, 2021, Naixue recorded revenue of RMB 959 million, of which the total revenue generated by tea shops was RMB 904.6 million, accounting for about 94.3% of the total revenue; The adjusted net profit (not measured by international financial reporting standards) was 7.3 million yuan.
“The first quarter is usually not our peak season of the year.” Naixue said that the peak sales of its products are usually during the warm weather and summer vacation from May to August every year, and the purchase orders will increase from time to time during public holidays such as China’s national day.
Xiaoshidai noticed that Naixue’s online orders accounted for a high proportion. According to the latest documents, as of the last feasible date, Naixue has nearly 35 million members, online order revenue accounts for nearly 70%, and self operated small program (private domain traffic) orders are growing rapidly.
Among them, the proportion of takeout orders is also increasing“ In 2018, 2019 and 2020, about 4.4%, 12.5% and 22.9% of the tea orders for customers were sold by customers through our WeChat and Alipay applet, the tea application program of the company and the third party takeaway platform. The company said.
“The road to profitability”
In the information collection after the hearing, Naixue added the discussion of “the road to profit”.
“We expect to further improve our financial performance and achieve profitability in the near future through sustained revenue growth and cost efficiency.” Naixue said that the sustainable and rapid growth of revenue mainly depends on two aspects: 1) the number of tea shops; 2) Average daily sales of single store.
As for the number of tea shops, Naixue said that it is expected to open about 300 and 350 Naixue tea shops (mainly in first tier cities and new first tier cities) in 2021 and 2022 respectively.
“We are still in the early stages of growth as a new brand of in-situ tea shop (compared with a more mature global coffee chain with decades of expansion history and a large store network) “We believe that it is crucial for us to achieve long-term, large-scale and sustainable profitability through the rapid expansion of the tea shop network to drive sustained overall revenue growth,” Naixue said
Let’s look at the average daily sales of a single store.
According to the latest disclosure, from 2018 to 2020, the average daily sales of Naixue tea were 30700 yuan, 27700 yuan and 20200 yuan respectively. Naixue believes that this is “the growth curve tends to be normal”.
Naixue points out that when a new Naixue tea shop opens in a new market, it usually attracts customer flow from its local community or inside and outside the residential area. As the number of tea shops in a particular market continues to grow, the number of visitors and sales of the Naixue tea shop have returned to normal levels, matching the population density of the area initially expected to serve.
The company said it will continue to drive product sales growth through (I) continuous product innovation, expanding product portfolio and attractive cross selling opportunities, (II) penetration into new retail channels to increase online and offline sales, (III) cost-effective marketing and promotion activities, (IV) expanding customer coverage, a broad and expanding customer base and enhancing customer experience.
In order to “lead to profit”, while expanding the store network and promoting sales growth, Naixue is also looking for cost savings.
“As we continue to scale up our business, we will be able to (I) continuously reduce the proportion of costs and expenses generated by stores in revenue; And (II) reduce the cost and expenditure generated at the headquarters level and allocated to the tea shops in proportion, so as to reduce the break even point to achieve overall profitability and improve economies of scale. ” Naixue said.
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Naixue is fierce! Sprint to the first share of global tea, more than 500 pages of IPO latest documents, many new highlights!