“ “bad artist” is not exciting. ”With the end of the leadership battle, Ruixing is looking for a way to return to the secondary market.Recently, some media reported that Ruixing coffee decided to seek listing in the Hong Kong stock market because it was questioned by US stock investors. Ruixing coffee denied that the management was focused on implementing the company’s business strategy and providing customers with excellent products and services. The company will continue to be committed to the capital market in the United States. The direction of listing is still under observation, but there is no plan to list in Hong Kong at present.Since the exposure of financial fraud in April 2020, the management of Ruixing coffee has experienced repeated fluctuations. First, Lu Zhengyao, Li Hui and Liu Erhai of the “iron triangle” were kicked out of the board of directors, Lu Zhengyao and Qian Zhiya gave up the positions of chairman and CEO respectively, and Guo Jinyi, senior vice president of Ruixing, took over their positions.Since then, the new and old leaders have forced the palace. According to Guo Jinyi, Lu Zhengyao and Qian Zhiya coerced dozens of Ruixing middle and senior managers to ask the board of directors to remove Guo Jinyi on the grounds of corruption, rooting out dissidents and low ability. Guo Jinyi responded with a strong “clear conscience” through an internal open letter. As a result, the board of directors sided with Guo Jin and promoted the complete “decoupling” between Shenzhou department executives and Ruixing.From beginning to end, Lu Zhengyao’s game object is not Guo Jinyi as a professional manager, but the investor behind it. As early as in the storm of financial fraud, Ruixing independent director Shao Xiaoheng insisted on investigating Ruixing. Lu Zhengyao once tried to dismiss Shao Xiaoheng, but was rejected by Ruixing’s investors Dazheng capital and pleasure capital.With the calm of the storm, Dazheng capital completed the replacement of Shenzhou capital. As early as the beginning of listing in 2019, Ruixing’s largest shareholder was Lu Zhengyao, with a shareholding ratio of more than 30.53%. However, in January this year, after Dazheng capital, together with IDG capital and Ares SSG, acquired the liquidation equity from the liquidator KPMG, Dazheng capital became the controlling shareholder of Ruixing coffee and held more than 50% of the voting rights.From this perspective, Dazheng capital has realized the “short” and “low absorption” of Ruixing. As Ruixing enters the new rhythm of restarting listing, “Dazheng Ruixing” also shows many differences from “Shenzhou Ruixing”.Old wine new bottle On June 29, 2020, due to the fermentation event of NASDAQ, NASDAQ entered the global OTC market.Pink list market, named after printing quotation with pink paper, is equivalent to the domestic third board market – enterprises that do not meet the listing requirements of the main board trade here. Different from the domestic third board market, there are no regular financial reports and disclosure requirements of company information in the powder sheet market. For enterprises that fail to disclose their financial reports on time, there is no mandatory delisting punishment in the pink list market.From the management’s statement, Ruixing is obviously more inclined to return to the US stock market. From June 2021, Ruixing began to reissue the re audited 2019 financial report, and then reissued the 2020 financial report and disclosed the company’s restructuring plan and the letter of intent for settlement signed with the plaintiff’s representative of American class action. Guo Jinyi explained: “we have been trying to remedy the accounting problems of delayed financial statements and correct historical financial information. The new leadership team will create long-term value for Ruixing coffee shareholders.”The disclosure of public information means constantly giving investors “reassurance” and leaving a backhand for returning to the main board market in the future.On February 4 this year, Ruixing announced that it had met the obligation of US $180 million civil penalty agreed in the settlement agreement with the SEC, which means that Ruixing has completed the settlement process with the SEC and ended the bankruptcy protection procedure at the capital market level.Although the capital market is still worried about the counterfeiting history of Ruixing coffee, the US stock market has a relatively mature Starbucks target after all. Ruixing can still obtain valuation dividends from the identity of “Oriental Starbucks”, while the Hong Kong stock market has no mature target of this track. Before the exposure of financial fraud, Ruixing’s share price rose all the way, with a maximum market value of more than $12 billion.At the investor level, Ruixing’s management is seeking confidence repair through prudent strategies.From the perspective of business strategy, the new leadership represented by Guo Jinyi has reversed Ruixing’s previous strategic planning. In the view of many investors, Guo Jinyi is leading Ruixing from the stage of radical expansion to the stage of fine operation.From 2017 to the end of 2021, the number of Ruixing’s self operated stores nationwide was 4, 1811, 4239, 3929 and 4397 respectively. According to Qian Zhiya’s statement at Ruixing Global Partner Conference in June 2019, Ruixing will build 10000 stores in 2021.Fortunately, the retail expansion process of Binrui has been interrupted, and the retail expansion process of Binrui has been suspended in 2020.This will fundamentally change Ruixing’s investment logic. During the leading period of Shenzhou department, Ruixing is considered to be a representative enterprise of transforming traditional retail through the Internet. It obtains customers through large user subsidies, and its advantage lies in the low-cost expansion ability of standardized store opening; With the positive operating cash flow from 2021, Ruixing is returning to the traditional retail model, with more emphasis on obtaining growth from the throttling of labor cost, material cost and rental cost at the operation level.Meanwhile, Ruixing’s thirst for financing will also weaken. After listing on NASDAQ in May 2019, Ruixing’s IPO raised US $695 million; But only eight months later, Ruixing hurriedly threw out the unmanned retail strategy, applied for an additional 12 million shares and issued $400 million in convertible bonds, with a total fund-raising scale exceeding the IPO financing amount. The huge capital gap created by the rapid expansion makes Ruixing finally fall into the stain of financial fraud.To a certain extent, Ruixing in the era of great justice is more trustworthy to investors.In 2019, Ruixing’s revenue was 3.025 billion yuan, but its operating cost was as high as 6.237 billion yuan, which was mainly used for renting stores, buying materials and subsidizing consumers in newly opened stores. Ruixing has also been criticized by investors as “selling one cup and losing two cups”.With the positive cash flow of Ruixing single store in 2020, Ruixing’s motivation for financial fraud is weakening. Although the financial report of 2021 shows that Ruixing still has a loss of 539 million yuan under the general accounting standards, it has been significantly reduced from the loss of 2.587 billion yuan in 2020.Take the proportion of Ruixing’s marketing expenses in revenue as an example. In 2018, this proportion was as high as 88.73%, but decreased to 4% in 2021. Ruixing, who once “invited consumers to coffee”, is gone.Two barriers According to the financial report data of 2021, Ruixing coffee seems to have achieved explosive growth in performance in a short time.According to the financial report, in 2021, Ruixing achieved a revenue of 7.965 billion yuan, a year-on-year increase of 97.5%; In 2020, Ruixing’s revenue growth was only 33.3%; In 2019, dominated by Shenzhou department, the revenue growth rate was 260%. In addition, Ruixing also achieved a significant reduction in the amount of losses. From the perspective of single store profitability, the profit margin of stores increased from 12.5% in 2020 to 20.9%.How to realize the performance of Xingyan?Taking the number of consumers as an example, in 2021, Ruixing’s average monthly trading customers were 13 million, an increase of 55.2% over 2020; In terms of the number of stores, the growth rate of Ruixing’s self operated stores in 2021 was only 11.91%.Among them, the franchise stores contributed about one-third of the revenue increment to Ruixing. Since January 2021, Ruixing has released the recruitment plan for new retail partners. Ruixing will share the profits of franchisees with a gross profit of more than 20000 yuan. By the end of 2021, Ruixing’s franchise stores accounted for 27% of the total number of stores, and the annual operating revenue was 1.306.1 billion yuan, with a year-on-year growth rate of 312.5%.From the perspective of revenue cost, one data is worth paying attention to – under the background of the increase in the number of stores, Ruixing’s material cost, leasing and other operating costs have increased to varying degrees, but the sales cost has decreased by 27.1% compared with 2020.In the early stage of brand development, Ruixing’s 3.80% discount was once deeply rooted in the hearts of the people. Consumers can buy a cup of coffee at a price of less than 10 yuan. However, since the financial fraud, Ruixing has reduced its discount marketing efforts. Some consumers said that since then, Ruixing’s price has been very embarrassing – its experience is not as good as Starbucks and its cost performance is not as good as convenience stores.From the perspective of investors, there are significant changes in Ruixing’s growth logic.“New entropy” believes that physical barriers and psychological barriers are very important in Ruixing’s investment logic.The former represents the formation of a dense and convenient store network in the chain coffee market. As Qian Zhiya stated in his speech in 2019, the convenience of providing coffee supply far exceeds that of competitors through intensive stores and takeout supplement.The latter represents the mental barrier of users, which is the reason for choosing Ruixing coffee. Qian Zhiya’s expression is that it is cheaper than Starbucks model, better than convenience store products, and even less expensive.From the perspective of hard physical barriers, Ruixing’s growth is slowing down in the high-speed urban scene of coffee core.Although the financial report did not disclose the proportion of self operated stores and franchise stores in Ruixing’s new stores in the fourth quarter of 2021. However, from the comparison of financial reports from 2020 to 2021, it can be found that the growth rate of new stores of Ruixing self operated stores and franchise stores is 11.91% and 86.15% respectively. Although the base number of franchise stores is lower, it still shows that Ruixing’s store growth is mainly concentrated in the sinking market.From the perspective of store density, the domestic chain coffee track has no competitors of Ruixing. What consumers in high-speed cities can clearly feel is that the store density of Ruixing coffee has been very high in core areas such as office buildings and business districts, leaving less and less encryption space for Ruixing.In the sinking market, the catering and coffee category is still in the user education period. Through the franchise mode, Ruixing “outsourced” the user education cost at the cost of greater uncertainty in the operation. In the context of the rapid growth of franchise store performance in the financial report of 2021, it still needs to be continuously observed whether franchise can replace direct operation and change Ruixing’s growth logic.From the perspective of soft user mental barriers, Ruixing has lost the marketing confidence of “no more expensive than convenience stores” in Qian Zhiya’s mouth. The price of Ruixing coffee mainstream products is returning from the unit price of about 15 yuan per cup to the range of 20-30 yuan, and its price range between catering stores and bottled coffee is becoming blurred.For Ruixing, if the brand abandons the third space model of Starbucks, it must start from the consumption frequency and seek to become the “ration” of coffee consumers. With the increase of consumers who are “persuaded” by price, Ruixing needs to balance the relationship between product strength and cost performance, so as to continuously refine its own market positioning.At the same time, Ruixing’s competitors are increasing. As Ruixing has accelerated market education by subsidizing consumers, more brands such as manner, m stand and tims are accelerating the financing progress. From the perspective of innovation ability, the raw coconut latte created by Ruixing was quickly re engraved by competitors after becoming popular. In high-speed cities with mature consumer education, Ruixing needs continuous innovation to improve the user experience. In the sinking market, compared with rivals with coffee products of less than 10 yuan, such as honey Snow Ice City, Ruixing needs to ensure the cost performance advantage of products, which increases the difficulty of competition at the same time.If Ruixing’s investment logic was mainly physical barriers in the period of Shenzhou department, depending on the speed of opening stores and the efficiency of obtaining customers, then in the period of Dazheng department, Ruixing’s investment logic will change to growth quality, reduce hard costs such as manpower and marketing, improve operation efficiency, develop innovative categories and maintain the mind of consumers. After the net profit turned from loss to profit, the market test faced by Ruixing really began.作者：白芷；编辑：月见；来源：新熵（ID：baoliaohui），转载已获得授权。转载授权及媒体商务合作：Amy（微信号：13701559246）；加入社群：Cherry（微信号：18261804307）。