Name Chuang Youpin is not "excellent enough"

Author | Karong

Edit | Tang Fei

US stocks "poor students" are about to airborne Hong Kong stocks.

As early as October 2020, Mingchuang Youpin had already landed on the New York Stock Exchange. On June 29, 2022, Mingchuang Youpin announced that it was planned to make a double major listing on the main board of the Hong Kong Stock Exchange. The announcement of IPO pricing means that the well -known products are one step closer to the double listing of Hong Kong stocks. On July 6, Mingchuang Youpin planned the price of its Hong Kong stock IPO at HK $ 13.80 per share, a 37%discount of 37%than the highest issue price.

As for why he chose to go public in Hong Kong, Mingchuang Youpin explained that it was to avoid "potential delisting risks in the United States." It makes sense to say this. In the past year, the stocks have continued to undergo pressure, and the stock price of many listed companies has a new low.

Right now, it is a good choice to go public in Hong Kong, but it is necessary to harden the iron. Based on the financial data of the famous and innocent products, it is caught in a "store dilemma", which disappoints US stock investors. Those may be the main purpose of the double listing of Hong Kong stocks.

Losses have expanded year by year

As the leader of the new consumption field, at the beginning of the listing, Mingchuang Youpin could be described as beautiful.

On October 15, 2020, Beijing time, Mingchuang Youpin landed on the New York Stock Exchange. On the day of listing, Mingchuang Youpin American Stocks opened by 20%, the highest share price was US $ 24.90 per share, and the market value of the market once exceeded 7.5 billion US dollars. Later, the stock price of Chuangyou Pin rose steadily, with a high point of $ 34.8/share in February 2021.

Picture source: Google

However, the stock price of Mingchuang Youpin began to "fall". As of July 7, Eastern Time, its stock price was only $ 7.5/share, a higher point of more than 78%.

In the face of this sluggish stock price performance, some investment institutions also chose to "escape." According to the 13F report disclosed to the SEC, large institutions such as freshwater spring, Jane Street, and Exoduspoint Capital have clearly cleared and excellent products.

Famous Chuang Youpin's stock price is not dazzling, although it has a certain connection with the collective frustration of China Stocks, but more importantly, because its core financial data continues to deteriorate, it is difficult to make investors see the future.

Picture source: prospectus

According to the financial report, the fiscal year 2019-2019, the revenue of famous and innocent products was 9.395 billion yuan, 8.979 billion yuan, and 9.072 billion yuan, and the net profit was -294 million yuan, -260 million yuan, and -1429 billion yuan, respectively. Essence The horizontal contrast can be found that not only the speed of revenue increases, but also the increasing losses.

In terms of Mingchuangyou, the expansion of losses is mainly caused by the epidemic. The prospectus shows that the epidemic has temporarily closed the overseas stores with 4%of Mingyin Youpin and interrupted the logistics and transportation operations of the Chinese market.

The financial report shows that the revenue of single stores in famous for the past three years has continued to grow. In fiscal year 2019-2019, the revenue of Mingchuang Youpin single stores was 2.7 million yuan, 2.2 million yuan, and 1.9 million yuan, respectively, a year-on-year decrease of 19.8%and 11.3%, respectively.

Taking the Q4 of 2021 as an example, the average quarterly revenue of Single Stores of Mingchuang Youpin was only 370,000 yuan, a decrease of 51.32%compared to the previous high of 760,000 yuan.

Industry insiders said that in addition to the decline in the performance of the famous performance performance, in addition to the factors of consumer consumption enthusiasm, it is to a greater extent because the stores of Mingchuang Youpin have opened too much, resulting in "mutual fighting" between stores.

At the beginning of 2022, Lai Yang, a member of the expert committee of the China Business Federation, talked about the business model of Mingchuang Youpin, "The operating costs of physical stores are high. There are also fewer and fewer stores in the store, which leads to the location of the newly opened stores. It is not particularly ideal, and it is difficult to have good benefits. "

Being in the "Strange Circle of Stores"

Surprisingly, the realization of the realization of offline stores is declining, but it does not seem to affect the enthusiasm of the store opening.

The prospectus shows that as of the end of March 2022, there were a total of 5113 stores worldwide, and the number of stores in the Chinese market was 3,197, an increase of 13.69%year -on -year; the number of overseas stores was 1916, a year -on -year increase of 7.94%.

In fact, as early as 2017, Ye Guofu, the founder of Mingchuang Youpin, proposed the "100 million stores" plan. In 2019, he entered 100 countries and regions and opened over 10,000 stores. The annual revenue exceeded 100 billion yuan. Essence However, in 2019, Mingchuang Youpin did not complete this task, and Ye Guofu will postpone the target to 2022.

To a large extent, Name Chuang Youpin's Store Connection is forced by the "dual -cycle" business model.

In the consumer goods industry, shipping has always been the greatest right to speak. If you want to get low -cost supply chain resources, then enterprises must ensure sufficient scale economy.

There are more stores and shipments. Naturally, the right to speak of famous and innocent products can be seen from the turnover cycle. According to the financial report, as of the end of 2021, the inventory cycle of the famous and innocent products was 68 days, and the upstream payment cycle was 30 to 60 days. In other words, Mingchuang Youpin has received the goods for a while, and even the week before it is sold, it will pay the supply chain.

A long enough accounting period, let the accounts always maintain a certain amount of cash reserves on the accounts of Mingyuyou products. With this money, you can open a new store to further promote sales.

Picture source: Guoyuan Securities

But the problem is that the capacity of the consumer market is limited, which brings certain challenges to the expansion of famous and innocent products. Data from the National Bureau of Statistics show that in December 2021, the total retail sales of Chinese social consumer goods increased by 1.7%year -on -year, and the growth rate continued to narrow. In addition, as online traffic is touched, Ali and JD.com have also seen the opportunity to sink the market "ten yuan stores" to launch their own brands in the way of OEM/ODM.

For example, in October 2021, JD.com established a BOE business group. The business group was consistent with the level of Jingdong Retail and was also an independent business unit. One month later, the sales of BOE Tokyo increased by 156%year -on -year. During the 618 Shopping Festival in 2022, the total turnover built by BOE Tokyo increased by 80%year -on -year.

In addition to the continuous efforts of online platforms, Mingchuang Youpin has to face the competition of players in the same industry. Take the KK Group, which has submitted the prospectus to the Hong Kong Stock Exchange as an example. It has brands such as KKV, X11, KK Museum, and operating products such as beauty, tide, food, food and other products, which are very similar to the business model of Mingchuang Youpin.

The prospectus shows that from the first half of 2018 to the first half of 2021, the sales of KK Group were 155 million yuan, 464 million yuan, 1.646 billion yuan, and 1.683 billion yuan, which were amazing.

Considering that consumers' purchase channels are becoming increasingly far, and there are "chasing soldiers" from online and offline. At this stage Outside the mode, find a practical growth curve to give investors confidence.

The "second curve" has not yet appeared

In fact, at the beginning of the US stock market, Mingchuang Youpin threw the second curve called "X-Strategy".

This strategy is to create new brands through internal incubation to obtain business growth.

In January and December of 2020, Mingchuang Youpin successively launched a beautiful makeup collection store Wow Colour and TOP TOY. In this regard, Ye Guofu once said: "There is no cost -effectiveness now, and the products must be unique and design. In the past, we mainly focused on living homes, and now gradually increased some tide things."

Judging from the market trend, the two tracks of Mingchuang Youpin's choice do have certain imagination.

Picture source: Zhiyan Consultation

According to the data of Zhiyan Consultation, in 2021, the total retail sales of Chinese cosmetics were 402.6 billion yuan, an increase of 18.4%year -on -year. The "2021 China Trend toy Market Development Report" released by the Academy of Social Sciences shows that from 2015 to 2020, the compound annual growth rate of China's tide-playing industry was 36%, and it is expected that the relevant market size in 2022 will reach 47.8 billion yuan.

However, in actual operations, none of these two new businesses of famous and innocent products have not showed the potential that new growth points should have.

At the strategic conference in 2020, WOW Colour has released a good saying. In the next three years, it will deploy more than 1,000 offline stores in the country at a speed of one store.

But in 2020, Yang Yang, the founder and CEO of Wow Color, suddenly resigned. Subsequently, Yang Yang told the media that leaving is purely personal, and "will not affect the development of the company." However, "Interface" quoted insiders that Yang Yang's resignation was partly because of the inconsistent business philosophy of Ye Guofu, and some reason was because of the impact of the epidemic. Wow Color's performance was not ideal.

With Yang Yang's departure, wow color also stunned. In early 2022, there were only about 135 stores, which were more than half of the 300 -to -top 300.

WOW Colour has not opened the situation. To a large extent, it is because Mingchuang Youpin overestimates the market prospect of domestic makeup. It is understood that at the beginning of the launch, nearly 70 % of the products of WOW Colour's makeup categories are domestic net red brands. At the end of 2020, WOW Colour began to transform, increasing international brands such as L'Oreal, Shiseido, and United Lahua.

But the problem is that this choice puts wow color in a dilemma. Compared with the beauty gathering shop represented by Harmay and Haydon Black Hole Warehouse, WOW color has no cost advantage; compared Wow color has no channel advantage.

As for the TOP TOY of the Chao Play Collection Store, there are many lives as WOW Colour. The Q3 financial report of 2022 shows that as of the end of March 2022, TOP TOY revenue was 111 million yuan, an increase of 377.3%year -on -year, but it only accounted for 1.1%of the company's total revenue.

This is likely to have a path dependence on the supply chain, and it still creates a tide -to -play product according to the traditional standard model. It is understood that only 30 % of the current TOP TOY IPs are original, and the remaining seven are co -branded, and the joint IP has no pricing power.

According to industry experience, the importance of IP and design in the industrial chain of tide is significantly higher than that of channels. Taking Bubble Mart as an example, the financial report shows that the bubble Mart's own IP revenue in 2021 was 2.587 billion yuan, an increase of 164%year -on -year, accounting for 57.6%of the total revenue.

In summary, the biggest problem of famous and innocent products at this stage is not only its traditional retail business falls into a "shop -opening strange circle", but also that it has not found a real "second curve".Coupled with as a consumer product, many products of Mingchuang Youpin have been exposed to quality problems.In November 2020, on the 12th day after the listing of U.S. stocks, Mingchuang Youpin specially held a quality strategic conference. Ye Guofu announced that he had contributed 100 million yuan to strengthen quality control.

However, the result does not seem to be satisfactory. On the black cat complaint platform, there are 1480 complaints related to Mingchuang Youpin, of which the quality -related issue is the "main force" of the complaint.

The listing of hundreds of stores and thousands of places is listed on the two places. These labels are enough to help famous and create "face", but refined management and quality construction are the "li" of a company to be long.There is still a long way to go.

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