The Zhitong Finance App learned that Huaan Securities released a research report that believes that behind the emergence of a number of 10 billion brands is the rise of the ultimate cost performance ratio against the trend, and the polarization of affordable and expensive prices. Currently, the core logic of ready-made tea is the two major increases of sinking and going overseas. What is inherently is the structural replacement and health upgrade of affordable tea drinks with traditional varieties of bottled beverages. The team believes that the past ten years have been a nascent period of extensive growth. The trumpet for listing has kicked off an advanced competition, and the long-term dimension will be the benchmark for the oligarchy era
Introduction: Why pay attention to ready-to-drink teas? In '23, the GMV of Michelle Ice City was nearly 50 billion, Ruixing (LKNCY.US) was over 30 billion, Gu Ming/Baidao (02555) was nearly 20 billion, and Bawang Chahime/Aunt Shanghai was about 10 billion... Behind the emergence of a number of 10 billion brands, the rise of extreme cost performance against the trend, and the polarization of affordability and price differentiation. In terms of growth, the core logic of current tea production is the two major increases of sinking and going overseas. Internally, it is the structural replacement and health upgrade of affordable tea drinks with traditional varieties of bottled beverages. The sinking power is full of vigor, as if Mixue bucked the trend with the ultimate cost performance ratio of 2-8 yuan. The competitor is already the world's top 3 ready-to-drink company, and its competitor is already bottled; how vast the overseas market is, ready-to-drink tea can be seen as China's first consumer circuit similar to Coca Cola/Starbucks/McDonald's. The essence of going overseas is supply chain export+tea culture export. Similar to latte driving coffee, milk tea can be exported to the outside world with unprecedented expectations.
Current: What are the advantages and disadvantages of freshly made tea? The overall market pattern is beginning to emerge. Affordability dominates exclusively, and the public competes fully, and high prices are forced to be downgraded due to the rise at the bottom. In terms of competition, the core of the current competition for ready-made tea is the scale effect brought about by supply chain and standardization. The essence of business is to exert the flywheel effect of the 2B supply chain. ❶ Product: Homogenization and standardization is the biggest pain point, and Michelle Ice City/Bawang Chaji's big single products stand out and easier to standardize; ❷ Supply chain: supply chain efficiency is the core competition point, with Michelle Bingcheng/Guming leading the cold chain in scale, and Bawang Chaji focuses on the minimalist supply chain; ❸ Brand: The best angle of short-term momentum comes from traffic/long term returns to the essence of the supply chain. Currently, the IP building and national style of Mishue Ice City/Bawang Chaji have outstanding results; ❹ Channel: The scale of the store is the foundation of the trading table, and Mixue Bingcheng/Ancient Ming has sunk down to the essence of the supply chain; Channel: The scale of the store is the foundation of the trading table. Leading and overbearing Chahime/Hi Cha has significant potential to open new businesses; ❺ Growth profit and single store model: comprehensive According to the analysis, the profit quality of Michelle Bingcheng/Gu Ming is outstanding, but the development strategy is different. Mixue is active, Gu Ming is stable, and the Bawang Chahime single store model is definitely leading.
Future: How will the “Spring and Autumn Warring States” be iterated? The past ten years have been a nascent period of extensive growth. The trumpet for listing kicked off an advanced competition, and the long-term dimension will also be the benchmark for the oligarchy era. Most of the core companies were founded in 2008. The competitive elements were the scale under homogenization (cost+opening of the store), and the competitive elements were iterated into differentiated operations (from sinking to going overseas, from homogenization to commercialization). We further discussed ❶ The dispute over sinking: intensification, manufacturers compete to lower the franchise threshold and race to the horse racing ground; ❷ Offshore dispute: Blue Ocean, leading and up-and-coming manufacturers are all eager to try it out.: Tea transformation is the next direction. Overlord Chahime is relatively leading the tea trend. The next step is to explore the value of tea and use “tea” ❸ “Culture”, we anticipate that the commercialization window for the industry is about to open.
Pricing: Multi-dimensional comparison selects Snow Ice City, Bawang Tea Princess, and Ancient Ming. Michelle Ice City (affordable king + overseas launch: estimated to have opened more than 70,000 domestic stores, market capitalization of 100 billion dollars), Bawang Chaji (Guofeng Fresh Milk Tea Winner+ Model Best: GMV hopes to double Starbucks China this year, the first long-term brand), Gu Ming (regional hegemon is stable and stable: national chemicals have doubled space, franchise reputation and profit quality are outstanding, market capitalization space 40 billion dollars), and actively follow Chabaidao (supply chain layout accelerated, PE was only 11x in '23).
Risk warning: New product expansion falls short of expectations; store expansion falls short of expectations; IPO progress falls short of expectations; single-store model damaged