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The Hong Kong Stock Exchange disclosed on February 14 that Shanghai Aunt (Shanghai) Industrial Co., Ltd. submitted an application for listing on the main board of the Hong Kong Stock Exchange, with CITIC Securities, Haitong International and Orient Securities International acting as co-sponsors.

Aunt Shanghai is a leading and rapidly growing ready-to-drink company. According to Insight Consulting, as of September 30, 2023, the company operated the fourth largest network of ready-made tea shops in China, and had a huge network in the sinking market.

According to Insight Consulting, in 2022 and for the nine months ending September 30, 2023, based on the number of stores in the entire system and the GMV growth rate, Shanghai Aunt is the fastest growing ready-made tea shop brand among the top five current tea shop brands based on the number of stores in the entire system.

The number of stores across the system increased by 40.5% from 3,776 on December 31, 2021 to 5,307 on December 31, 2022, and increased 37.5% from 5,307 on December 31, 2022 to 7,297 stores on September 30, 2023.

Shanghai Aunt's GMV increased 45.8% from RMB 4.161 billion in 2021 (same below) to 6.068 billion yuan in 2022, and increased 57.7% from 4.554 billion yuan for the nine months ended September 30, 2022 to 7.183 billion yuan for the nine months ended September 30, 2023. According to Insight Consulting, as of September 30, 2023, the company is a Chinese mid-priced ready-made tea shop brand covering the largest number of Chinese cities.》》》 Registration for the March 16-17 Beijing Course on the Practical Operation of IPOs and Mergers, Acquisitions and Restructuring of Companies Under the Registration System is in progress! Registration consultation 18500141669 (same as WeChat)

In 2013, the company opened its first store in Shanghai to sell “whole grain milk tea” — a type of milk tea with grains as an ingredient. These drinks are best served hot, especially in northern China, and provide a warm and comfortable feeling in the cold winter. With this, the company took steps to expand its network of stores in northern China. Since then, the company has discovered that consumer demand for fresh fruit tea across China continues to grow, particularly in the sinking market. In 2019, the company began providing fresh fruit tea and was well received by customers, enabling the company to expand rapidly across the country, including to the southern region. At the same time, the company expanded its product range through Shanghai Coffee and Light Edition, so that more consumers can enjoy the company's products.

According to Insight Consulting, as of September 30, 2023, based on the number of stores in the entire system, the company's stores in the sinking market occupy a leading position among mid-price ready-made tea shop brands. About 49.0% of the stores in the company's network are located in third-tier cities in China. According to the Insight Consultation, in 2022 and for the nine months ended September 30, 2023, the company is the fastest-growing ready-made tea shop brand among the top five existing tea shop brands in China based on the number of stores in the entire system and the GMV growth rate.

According to Insight Consulting, as of September 30, 2023, Aunt Shanghai is a Chinese mid-priced tea shop brand covering the largest number of Chinese cities; according to Insight Consulting, based on the number of stores in the entire system, as of September 30, 2023, the company ranked first among mid-priced ready-made tea shop brands in northern China.

As of September 30, 2023, among the top five mid-priced tea shop brands in China based on the number of stores in the entire system, the company ranked first in terms of the city coverage of warehouses. According to insight, as of September 30, 2023, the company ranked fourth in the current tea shop market in China based on the number of stores in the entire system and nine months ending September 30, 2023 in terms of GMV.

On September 30, 2023, Aunt Shanghai's store network had 7,297 stores, covering all four municipalities in China, as well as more than 300 cities in five autonomous regions and 22 provinces. The company's network of stores covers the Mohe River in Heilongjiang Province in China in the north and Sanya in Hainan Province in the south.

The company strategically focuses on the sinking market. Based on the number of stores in the entire system, the company is in a market leading position among mid-priced ready-made tea shop brands in China's sinking market. The company has accumulated rich experience in store operations, personnel management and consumer preferences in sinking markets in China, enabling the company's franchisees to enter such markets more efficiently. The current tea shop market in China's third-tier cities and below is the largest and expected fastest growing segment between 2022 and 2027, with huge potential for future growth.

The company adopts a franchise-focused business model. As of September 30, 2023, 99.3% or 7,245 of the 7,297 stores in the company's network were operated by franchisees. The vast majority of the company's revenue comes from franchise business, which mainly includes sales of goods and franchise services.

The company's mutually beneficial and win-win franchise system is the foundation for long-term stable cooperation between the company and franchisees. As of September 30, 2023, of the company's 4,284 franchisees, 32.3% or 1,382 franchisees have opened more than one store. For the nine months ended September 30, 2023, the company's current franchisees opened 47.3% or 1,087 new franchisees.

On the financial side, in 2021, 2022 and the first nine months of 2023, the company recorded revenue of 1.64 billion yuan, 2,199 billion yuan and 2,535 million yuan respectively; profit attributable to parent company owners during the corresponding period was 83.399 million yuan, 149 million yuan, and 324 million yuan.

The company provides consumers with a seamless and convenient shopping experience through efficient store planning and the application of various technologies, such as digital payment and online ordering systems. In order to ensure the uniform design of all stores, the company provides store design plans and standards for franchisees. The company is currently launching three brand concepts, namely Shanghai Aunt, Shanghai Coffee and Light Edition, to cater to different consumer preferences.

Shanghai Aunt: Shanghai Aunt is the main brand launched by the company in 2013. It offers a range of products, including fresh fruit tea, multi-ingredient milk tea, light milk tea, yogurt shakes, and snacks in bags. The company aims to bring cost-effective health products to consumers all over China (especially in third-tier cities and below). Under this brand concept, the price range for major products usually ranges from RMB 7 to RMB 22 per model.

Shanghai Coffee: Launched in 2022, Shanghai Coffee is generally located in Shanghai Auntie's stores. The company provides a variety of coffee drinks under Shanghai Coffee, and plans to launch “Oriental Lattes”, including coffee lattes, tea lattes, and tea and coffee lattes to broaden market reach. Under this brand concept, the price range for major products usually ranges from RMB 13 to RMB 23 per model.

Lightweight Edition: Launched in 2023, the brand concept provides consumers in third-tier cities and below with a more cost-effective choice of tea. The main products offered in the light version are multi-ingredient milk tea, light milk tea, fruit tea and ice cream. Compared with Shanghai Aunt, the lightweight version is more flexible in terms of pricing and store location selection, helping it further expand into county-level cities.

Under this brand concept, the price range for major products usually ranges from RMB 2 to RMB 12 per model. As of the last practical date, all of the company's Light Premium stores are operating with version 1.0 (Shanghai Aunt Light Edition). The company plans to upgrade the lightweight brand concept to version 2.0 to capture the needs of the sinking market with an eye-catching logo, upgraded store design, and new promotion activities.

The company attaches great importance to the sinking market. As of September 30, 2023, about 49.0% of the stores in the company's network are located in third-tier cities and below. According to insight and based on the number of stores in the entire system, the company's stores in the sinking market occupy a leading position among mid-priced current tea shop brands. In the nine months ended September 30, 2023, 50.4% of the company's new online stores were opened in third-tier cities and below.

The current tea shop market in China's third-tier cities and below is the largest and expected fastest growing segment between 2022 and 2027, with huge potential for future growth. The company plans to continue to expand its business, use its successful experience to further cultivate the current market in various parts of China, and expand its business to more third-tier cities and below.

Aunt Shanghai supports the rapid expansion of the store network by establishing a nationwide supply chain and strong management capabilities. According to Insight Consulting, as of September 30, 2023, the company ranked first among the top five mid-priced tea shop brands in China based on the number of stores in the entire system based on the number of cities covered by warehouses.

Aunt Shanghai plans to use the amount raised from the Hong Kong IPO to enhance the company's digital capabilities; develop and improve the quality of raw materials and ingredients, create popular products, and upgrade the company's equipment and machinery; enhance the company's production, processing, warehousing, logistics and distribution capabilities to strengthen the company's supply chain capabilities; enhance the company's brand potential and further expand and expand the company's store network; invest in various marketing activities; and use it for working capital and other general corporate purposes.

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