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海伦司国际控股(01526.HK):年轻人线下社交平台 高性价比“夜间星巴克”

Helens International Holdings (01526.HK): Cost-effective offline social networking platform for young people “Starbucks at night”

中泰證券 ·  Jul 21, 2021 00:00

  The pub industry: Benefiting from nighttime economic policies and the release of Gen Z & lower tier consumption capacity. Provincial, municipal, and local governments have successively issued policies to encourage nighttime economic development, which will drive the further development of the pub industry; young customers have become the main consumers, and pubs can meet the needs of young people for alcohol, services and social networking; the per capita disposable income growth rate of third-tier cities and below has generally been above 8% in recent years, with strong consumption potential. According to Frost&Sullivan statistics, the revenue of China's pub industry in 2019 was 117.9 billion yuan, and CAGR reached 8.7%. With the increase in consumption capacity and the number of pubs, CAGR is expected to reach 18.8% in 2020-2025.

A leader in the pub industry. Established in 2009, Helens Bistro is positioned as a cost-effective offline leisure space, providing young consumers aged 18 to 28 with a high-quality and cost-effective product portfolio and a comfortable and enjoyable social space. By the end of 2020, the number of Helens taverns reached 351, covering 83 cities in 22 provincial administrative districts in mainland China and Hong Kong, China. According to Frost&Sullivan statistics, in terms of the number of pubs, the company became the largest offline pub chain in China for three consecutive years.

Competitive advantage: Cost-effective targeting young people, and high standardization helps rapid expansion. (1) Build an influencer bistro brand: it has accumulated more than 5.7 million followers on the official WeChat, Douyin and Weibo accounts, and the product “Helen's Cola Barrel” became popular on Douyin with the topic “Helen's Cola Barrel National Unified Posture”, and the video was viewed more than 1 billion times; (2) Targeting young people and targeting college students: from site selection to marketing methods, it is very suitable for college students to target young people; (3) A highly cost-effective product mix: all bottled beers: all bottled beer The price of the products is 10 yuan/ Within the bottle, the price of third-party products is about 35%-67% lower than the average price of peers. They are extremely cost-effective and suitable for young people to consume; (4) Own alcohol has an obvious scale effect:

Excluding the intermediary link, the scale effect is prominent, and gross margin is high; (5) High standardization helps efficient expansion: Standardized operation has been achieved in terms of products, operations, management, and talent, supporting rapid and efficient expansion, and the break-even period for each new directly-operated pub continues to decline.

Single store model: Considering that employee salaries and unit rents in low-tier cities are lower than in high-tier cities, but the order unit price is basically the same, we conducted a sensitivity analysis. When the employee salary is 4,000 yuan/month and the unit rent is 2.5 yuan/square meter/day, the net interest rate of a single store can reach 22.81%, and when the employee's salary is 3,500 yuan/month and the unit rent is 2 yuan/square meter/day, the net interest rate of a single store can reach 25.73%.

Expand store space: Using the number of colleges and universities as a reference, you can open at least 2,688 stores. Helens's main consumer groups are college students and young white-collar workers aged 18 to 28, and most of them are located near colleges, so the number of colleges and universities in China is used as the bottom line for the company's expansion. According to statistics from the Ministry of Education, as of the end of 2019, there were 2,688 ordinary colleges and universities in China. Assuming that every college can support 1 Helens tavern, considering that every college may have different campuses, then Helens can open at least 2,688.

Operational and financial analysis: Profitability of own alcohol is strong and has obvious scale effects. Benefiting from the rapid expansion of direct-run stores and the excellent performance of a single store, revenue was 820 million yuan in 20 years, and CAGR reached 167% in the past three years. The gross profit margin of owned alcohol reached 78.4% in 2020. The scale effect was significant, which was higher than the 51.5% gross profit margin of third-party alcoholic beverages.

Development plan: rapid expansion, continuous investment in technology research and development. The plan is to open 400/630/900 pubs nationwide in 2021/22/23, respectively, and increase the number of pubs to about 2,200 by the end of 2023. Existing pubs are mainly concentrated in Tier 1 and 2 cities in China, and will be further deployed in lower-tier cities in the future. Furthermore, it will continue to invest in talent pool construction, technology research and development, and marketing channels.

Risk warning: food safety risk; risk of store expansion falling short of expectations; risk of decline in the same store due to rapid expansion; risk of fluctuations in raw material prices.

The translation is provided by third-party software.


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