I cried when selling milk tea, but the supplier laughed with an IPO

Introduction: The new tea track does not have super monopolies. As a supplier for "selling water", there is a possibility of giants.

01 Selling water for the water selling

Selling milk tea, not making money, is normal.

In 2021, the "New Tea Drink" tea (2105.HK) was adjusted by 145 million after adjustment, from a year -on -year loss to losses. Hi Tea also rumored that the performance was poor, and the IPO process was pushed again and again.

The suppliers behind them have made considerable profits and began to be listed densely.

The fruit tea with a cup of Naixue is essential for fruit juice drinks. It has also entered the listed queue, Dexin Food, the strong beverage supplier.

Dexin fruit juice beverage, Source: Jingdong Mall

On July 19, 2021, Dexin Food and Anxin Securities signed a listing counseling agreement to start A -share listing. One year later, on July 5 this year, Dexin Food pre -disclosed the prospectus, which is planned to be listed on the main board of Shenzhen.

It is expected to issue no more than 16.823 million shares this time, raising 900 million yuan. The raised funds will be used for annual output of 38,000 tons of beverage ingredient production base projects, beverage ingredients and baking product production line projects and plant base beverage production line projects.

The use of funds for funding, Source: Dexin Food Prospectus

As a supplier of current beverage ingredients, the main products provided by Dexin Food are divided into three series: drinks thick pulp, flavored syrup and small drinks.

Specific include:

Drinks thick pulp: fruit and vegetable juice beverage thick pulp, plant protein beverage thick pulp, NFC tea soup, etc.;

Flavor syrup: coffee seasoning syrup, bamboo cane rockose, brown sugar syrup, zero -calorie syrup, etc.;

Small drinks: biscuits, cold sky, jelly, etc.

The prospectus shows that Dexin Food has developed into a supplier of many food and beverage chain brands, including Yumc.n, McDonald's, Starbucks (SBUX.O), 7 points of sweet, honey snow ice city, Ruixing coffee ( LKNCY.OO), Nai Xue's tea (2105.HK), Book of Burning Fairy Cao, Puping Gao Naru (0520.HK), IKEA, Wallace, Awarsta, Lele Tea, Haidilao (6862. HK), King Yonghe and three squirrels (300783.SZ) and so on.

In 2019, 2020 and 2021, the company's operating income was 393 million yuan, 357 million yuan, and 529 million yuan, respectively, and the net profit of the same period was 82 million yuan, 67 million yuan, and 96 million yuan.

Although operating income and net profit were rising, the profit margin decreased year by year, down more than two points from 20.84%. The reason for the decline in net profit margin, the company said that it is mainly the systemic risk brought by the new crown epidemic.

Source: Dexin Food Prospectus, Alpha Factory Sorting

The raw material industry in the food and beverage, the professional threshold is extremely high. It is often due to the founder's professional judgment in this industry and grasping the wind.

Lin Zhiyong, the founder of Dexin Food, was born in the "science class" of food engineering -related majors.

In 1997, after graduating from Master Lin Zhiyong, he entered the Procter & Gamble P & G (PG.N) company. Until 2008, Lin Zhiyong's path has always been a glory career career.

In 2009, Lin Zhiyong saw the wind in the juice industry. After the financial turmoil in 2008, the export volume and prices were seriously dependent on exported Chinese fruit juice companies. The fruit juice giants had to turn the focus to the country, which greatly reduced the cost of raw materials and created a good opportunity for downstream companies to expand.

That year, the industry leader Huiyuan fruit juice was or not for the acquisition of Coca -Cola (KO.N). In addition, the losses of the year made a market share.

Unification (1216.tw), Coca -Cola, Master Kang Holdings (0322.HK), farmer orchard, etc., have added a fruit juice section, and concentrated fruit juice plasma became a popular product at that time.

In June 2008, Shanghai Dexin Beverage Co., Ltd. (later renamed Shanghai Dexin Industrial Co., Ltd., hereinafter referred to as Dexin Industry).

In April 2009, Lin Zhiyong served as executive director of Dexin Industry. In 2009, Dexin launched a series of concentrations of fruit and vegetable juice.

In 2012, Dexin's predecessor, Dexin, was established, and for the first time, it launched its own BIB fruit juice and beverages. After 2014, Dexin Foods developed products categories such as solid drinks, steriles, concentrated fruit juice products, flavored syrup and NFC tea soup.

Development of Dexin Food Development, Source: Company Official Website

In 2019, Ruixing Coffee, Starbucks and other new tea brands have become the big customers of Dexin Food.

The top five customers of Dexin Food over the years, Source: Company Prospectus

02 Valuation No surprise

Dexin Food has made a round of financing before the declaration is listed.

On May 13, 2021, investors such as Jinlun Investment and Gazette III of CITIC Capital, at the price of 51.31 yuan per share, totaling 260 million yuan in Dexin Foods, accounting for 10.04%of the total shares. Based on this estimation, the post -return valuation of Dexin Food was about 2.6 billion yuan before the listing of Dexin Food.

Source: Dexin Food Prospectus

According to the prospectus, this IPO fundraising does not exceed 16.823 million shares, accounting for not less than 25%after the issuance. Therefore, it is expected that the market value of Dexin Food will exceed 3.6 billion yuan. Based on the net profit of 96 million yuan in 2021, the P / E ratio was about 37.5 times. Dexin Food Prospectus listed Qianwei Chong Kitchen (001215.SZ), Anji Food (603696.SH) and Richen (603755.SH) as comparable companies. These three food companies are mainly engaged in composite seasoning and frozen rice noodles.

In fact, companies with beverage brands as their main customers are more valuable for Dexin Food.

The scale of the income profit of Dexin Food is similar to the fat -planted cream supplier Hairong Technology (300915.SZ), which can use the latter as a valuation reference.

Hairong Technology's static price -earnings ratio is 35.34 times, which is close to the P / E ratio of Daxy Food. At present, Hairong Technology has a market value of nearly 4 billion.

From this point of view, the 3.6 billion valuation of Dexin Food IPO after fundraising is more reasonable from the perspective of peers.

03 The valuation of money is higher

There are many A -share beverage ingredients suppliers.

For example, the ternary creature (301206.sz) and the bowling (002286.SZ) for the vitality forest (301206.SZ); the "expert" Jiahe Food (605300.SH); Hairong Technology, which is supplied to COCO milk tea; recently, the "popular" empty parent company Baoli Food (603170.SH) and so on.

In addition, Hengxin Life (A22099.SZ), a paper cup packaging material, has pre -disclosed the prospectus in May this year. The "deep binding" of the aunt's juice supplier, Tianye (832023.NQ), also plans to log in to the Beijing Stock Exchange after applying for counseling filing.

A -share food and beverage ingredient supplier, Source: Flush iFind

In the above table, the supplier with a valuation of tens of billions has not yet appeared.

In contrast, the new tea brand is very bad, but the valuation/market value is tens of billions.

According to Tianyancha APP, in July 2021, Xicha completed a round D financing, with a amount of 500 million US dollars (about 3.378 billion yuan).

After this round of financing, the valuation of Huancha reached 60 billion yuan. In March 2020, the valuation of the C -round C round was rumored to be only 16 billion yuan. In just 16 months, the valuation has increased by 2.75 times.

Naixue's tea in 2021 was 145 million yuan, and the market value was still over 10 billion.

In January 2021, Miyuki Bingcheng received investment in head institutions such as Gaoming Capital, Meituan Dragon Ball and CPE Yuanfeng, and Pre-IPO financing was 2 billion yuan. After the financing is completed, Mixue Bingcheng's valuation has exceeded 20 billion yuan.

In January 2022, the book also burned 600 million yuan in financing. According to calculations, the valuation has reached 10 billion yuan.

The reason is that the new tea brand chain store is essentially selling the C -side "traffic entrance", which is different from the B -end supplier, and the structure of the competitive pattern is different.

The brand chain store is competing for the market advantageous position, who runs out first. The first -level market investors are willing to pay a high premium for the "head horse" that can monopolize the market in the future.

In addition, once the brand joins the scale, the leverage advantage of light assets is very obvious.

Although the upstream raw material suppliers seized the opportunity to grow at the high -speed market, they earned the hard money of real gold and silver, but compared with brand customers, the valuation was still the same.

04 Demand rigidity

One question is that brand customers do not make money or even lose money.

This needs to start with two aspects.

First, the brand continues to push new tests on the upstream supply chain. In 2021, Nai Xue's tea launched a total of 105 new products, pushing a new cycle for an average of 3 and a half days. Hi Tea did not lag too much. In 2021, nearly 80 new products were launched, with an average of 4 and a half days new.

Naixue's tea "2021 Big Data Report", Source: Naixue's tea

For new, it is required that the supplier's production chain must have sufficient elasticity to have the ability to respond to the purchasing needs of customers' rapid changes.

On June 30 this year, Jiahe Food also mentioned in the investigation of 85 institutions that the new speed of tea products is very fast.

Driven by this demand, customers will have higher requirements for raw material suppliers cooperating with R & D. If a customer can find a strong supplier who has a strong comprehensive in terms of strain, production capacity, quality, etc., it will definitely give priority to "strategic procurement" its products.

The second is that the material demand itself is elastic and "rigid." Taking Naixue's tea as an example, in 2021, Naixue's tea materials cost 1.4 billion, accounting for 32.6%of the main income, an increase of 20.8%year -on -year.

Source: Naixue's Tea 2021 Annual Report

The cost of materials is high, and the new tea brand has also begun to seek self -built production bases in the origin of the origin and extend to the upper reaches of the industrial chain.

However, it is subject to dispersion of fruits, large procurement radius, large seasonal weather changes and high loss rates. For certain raw materials, brands have to choose professional suppliers, even if the latter's price is scary.

In order to meet the speed of opening and production capacity, the new tea brand depends on raw material suppliers, even if it is more costly. Therefore, regardless of whether the new tea brand itself is profitable, it must "make the middlemen earn a difference."

Of course, the emergence of this situation is related to the strong financing capabilities of the new tea brand. The current attention point is the expansion of the business. It is not so harsh for the stable supplier that can support its expansion. 05 How far can the raw material supplier run in the future?

Valuation is a book number. Making money is the weight of maintaining corporate competitiveness.

The new tea brand that has been in "profitable anxiety" for a long time is not good for life.

In 2021, market preferences began to "down". According to the "2020-2021 Chinese New Tea Industry Development Report", in 2021, the market for products of the new tea drink in China will account for more than 80 %; nearly 60 % of consumers can only accept the unit price of 10 to 15 yuan. Essence

Perhaps in accordance with this trend, head brands have reduced prices.

Beginning in 2022, Xicha took the lead in the war-cutting war. More than 60%of the products were priced at 15-25 yuan, which was close to the price of the mid-range market.

Nai Xue's tea can only be followed up, put her body down to the same as Mixuebing City, and launch the "starting from 9 yuan" products. The low unit price means low gross profit.

On the other hand, the cost end is constantly squeezing profitable space.

According to the financial report of 2020 and 2021, Nai Xue's tea costs and expenses have a total of more than 100%of the revenue ratio. Nai Xue's tea is a considerable distance from the overall profit.

Source: Nai Xue's tea 2021 financial report, Alpha Factory finishing

Another phenomenon worthy of attention is that in order to reduce capital expenditure, the new tea shop is getting smaller and smaller. Taking Naixue as an example, its stores are divided into standard stores, first Pro stores and second -class Pro stores. Compared with the cost of opening a store with a standard store of 1.8 million stores, the PRO store area is smaller, and the cost of opening a store has also dropped to 1 million.

This change has led to a decline in the revenue and profits of single -storey stores. The financial report shows that the operating profit margin of the second Catey PRO store is only about 1/3 of the standard store.

Source: Naixue's Tea 2021 Financial Report

The second type of PRO tea shop has a daily profit of only 682 yuan. Calculated by opening a new store 1 million input, the recovery period is at least four years. Under the clouds of the new crown epidemic, the assumptions that have been opened for 360 days can be described as very optimistic.

Whether it is price reduction, the number of store opening, or more small -area direct -operated stores, the ceiling that sells the number of cups and even the average daily income of a single store is getting lower and lower, which will also affect the revenue of raw material suppliers.

Only when the new tea brand is squeezed into the head camp, can they have the opportunity to win the favor of investors. However, under the influence of various uncertain factors, closing and closing will also become the norm of the industry.

In recent years, the new tea brand has been continuously undergoing a reshuffle, and the "odds" of the survival of the upstream suppliers, and it is not necessary to watch it.

It is worth noting that due to the characteristics of catering, there will be super monopolies in the new tea track, which means that this market may be an extremely decentralized market. In this way, as a supplier for "selling water", there is a possibility of giants.

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