Jiang Han: Why does Mixue Bingcheng make money without selling milk tea?

Zhongxin Jingwei, September 28th: ​​Why does Mixue Bingcheng make money without selling milk tea?

Author Jiang Han Pangu Think Tank Senior Researcher

Mi Xue Bingcheng is going to go public in A shares. Looking at the prospectus of Honey Snow Ice City, many people's biggest feelings are that they have always been considered to be ice cream and milk tea giants, and they have made money but do not rely on "selling milk tea". What is the business logic of this? What pressure and challenges are Mixue Bingcheng facing?

Selling ingredients is the most profitable

The official website of the CSRC shows that Mixue Bingcheng Co., Ltd. (hereinafter referred to as Mixue Bingcheng) pre -disclosed the prospectus and wants to apply for the motherboard of Shenzhen City. The prospectus shows that Mixue Bingcheng plans to raise approximately RMB 6.496 billion. Among them, about 2.9 billion yuan intends to put in production and construction projects such as food processing, industrial parks, and 1.9 billion yuan to supplement liquidity funds. About 1.1 billion yuan will be used for warehousing and logistics supporting projects, and the remaining 550 million yuan is intended to be used for marketing services. Systems, R & D centers and other projects.

The prospectus shows that from 2019 to 2021, the operating income realized by Mixue Bingcheng was about 2.566 billion yuan, 4.68 billion yuan, and 10.351 billion yuan, respectively. About 445 million yuan, 632 million yuan, and 1.91 billion yuan, three years of increased by nearly 5 times. In addition, in the first quarter of 2022, Mixue Bingcheng realized operating income of 2.434 billion yuan, and the net profit attributable to shareholders of the parent company was about 390 million yuan.

However, if you look closely at the prospectus of Mixue Bingcheng, you will find that the secret of Miyuki Bingcheng's money does not seem to be selling milk tea. What should I think of the business logic of Mixue Bingcheng?

First of all, the most profitable thing about Mi Xue Bingcheng is actually not selling milk tea, or even the franchise fee of Mixue Bingcheng. According to the prospectus, the management fee of franchisees from January to March 2022 accounted for only 2.62%of the total revenue, while the products of direct stores accounted for only 0.56%of the main business revenue. The most profitable thing about Mixue Bingcheng is selling ingredients. From January to March 2022, Mi Xue Bingcheng sold the ingredients to franchisees by 1.756 billion yuan, accounting for 72.16%of the main business income; the packaging materials of the same period accounted for the Lord 15.55%of operating income. Not only in the first quarter of 2022, two types of businesses accounted for more than 85%from 2019 to 2021. Some media even found that in 2021, the straw business alone contributed 306 million yuan in revenue to Mixue Bingcheng, and the average unit price of the straw was 0.1 yuan/root, that is, Mixue Bingcheng sold the straw in 2021 and sold the straws in 2021 to sell the straws. More than 3 billion yuan.

From this point, it may be seen that the business logic of Mixue Bingcheng is to continuously promote the development of the market by joining, but it does not rely on the franchise fee to make profits. Snowbing City's milk tea raw materials, ingredients, and packaging to make money, this is like some cheap coffee machines on the market do not rely on selling coffee machines to make money, but to make money by selling coffee machines.

Secondly, Mi Xue Bingcheng is making money with scale. Although the business logic of the "Golders is not as good as the water selling" has long been well known, the logic of Mixue Ice City is above this business model. In the entire market, the low prices of Mixue Bingcheng can be described as a household name. The gameplay is to build a supply chain for self -built supply chains. It continuously reduces the cost through the supply chain. With the advantages of the stores, it can effectively control the upstream and downstream of the industry, so that the supplier is willing to be willing The land helps Mixue Bingcheng to buy, and then use a set of the simplest and most practical price pricing strategies to pay for it. This logic is to calculate the lowest cost first and then add a meager profit, launch a lowest price that attracts all consumers, and then use everyone to like the "true fragrance law" gameplay of low prices to continuously attract users. This is why the low -cost ice cream, lemonade, and coffee of honey snow ice city have become the only way to attract users.

For most market competitors, it is difficult to compete with Honey Snow Ice City through the same logic, because this means that the same or lower price must also achieve the quality of Honey Snow Ice City. In this context, the franchisee dare not be able to purchase from Mixue Bingcheng because Mixue Bingcheng maintains this business system.

Cost and store control pressure

Unlike other milk tea companies facing huge pressure on losses when listing, Mi Xue Bingcheng is preparing to go public when making money, and it also has a rich cash flow. Because of this, Honey Snow Ice City has enough confidence to conford Dare to choose to go public on the A -share motherboard.

However, it may not be difficult to go public on the market, but it also faces a certain risk:

The first is to face huge cost challenges at low prices. At present, with the rapid rise in the cost of the entire market supply chain, the price of the supply chain of Mixue Ice City has risen. Although the cost control of Mixue Ice City is strong, there is no way to fight against the price increase pressure of the entire product supply chain price increase. Once the price advantage of Mixue Bingcheng cannot continue, it is likely to face huge market challenges.

Second, the difficulty of store management and control continues to increase. As a chain tea brand, the biggest difficulty of Mixue Ice City is that the pressure of store management and control has continued to increase. As the number of stores is increasing, the management of stores is becoming more and more difficult to manage. If the problem of commercial hygiene and safety, if the store management cannot be effectively carried out, Mixue Bingcheng is likely to have huge problems. (Zhongxin Jingwei APP)

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