In recent days, the prices of various products for “clothing, food, housing and transportation” have increased one after another: gasoline, Tesla Xiaopeng, maverick electric, and Leshi potato chips… Under the “rising sound”, there are sharp price reductions of products, which shocked the fund king!
Net black milk tea Naixue recently announced: “substantial price reduction, 9 yuan to 19 yuan fresh fruit tea, new every month”. Previously, the average unit price of Naixue products was 27 yuan, and the maximum price reached 38 yuan. Now, after the price adjustment, the main price band will be reduced to 14-25 yuan, with a minimum of 9 yuan, bid farewell to the era of 30 yuan.
This high-quality milk tea “baifumei” put down its body, which is a helpless move. The new tea market has long been a red sea. Na Xue’s tea is also burning investors’ money losing money, making a loss from 2018 to 2021 for four consecutive years. When it was listed in June last year, the bubble of “one cup of milk tea propped up 30 billion” broke down rapidly in less than a year. Today, the market value is only 7 billion 700 million Hong Kong dollars, down 75%.
Naixue’s tea food safety problem has never been solved, and the number of complaints remains high, such as moldy bread, the use of blackened mangoes, the continued use of labels falling into mango mud, diarrhea after drinking, and so on.
once “half a day’s salary for one cup”
In recent years, with the help of capital, the new tea market has transformed from a blue ocean into a red ocean, killing the sky and the earth. Honey Snow Ice City, which focuses on young people in small towns, has directly reduced the price of main products to 6 yuan. By 2022, Naixue, the “first stock of online black milk tea” taking the high-end route, will not be able to collapse and change the pattern to reduce the price. Of course, according to the company, the original intention is to consider consumers.
First, in January this year, Naixue announced that from January 17, 2022, it would launch a one month “easy purchase” series of discounts. The lowest price of tea and coffee was only 9 yuan, and the overall price reduction reached 5-7 yuan. Naixuefang said that the price adjustment is “an adjustment made by the brand with insight into consumer demand and based on its own supply chain ability, digital ability and quality control ability” and “hopes to provide consumers with richer choices in a wider price band”.
Although the so-called “easy purchase” period is one month, in fact, in February, it is still “9 yuan to drink Naixue”.
In March, Naixue didn’t pack directly and tore off the “Mask“. On March 17, the company announced that the “substantial price reduction” and “relaxed” series were up to 19 yuan / cup, with a maximum decrease of 10 yuan, and then “at least one new tea product less than 20 yuan will be launched every month”. It said it was “a brand reshaping”.
According to the price range of new tea products, the price of high-end products is generally 23 yuan to 38 yuan, the price of middle-end products is generally 13 yuan to 22 yuan, and the price of low-end products is generally 5 yuan to 12 yuan.
Naixue has always advertised itself with high-end tea. According to its listing prospectus last year, the average unit price of Naixue’s tea is 27 yuan, up to 38 yuan. The company once had a cup of “domineering mangosteen” of 58 yuan and a cup of “domineering Durian” of 88 yuan. Some netizens lamented that “poverty limits imagination” and “the monthly salary is 5000, and the price of one cup is half a day’s salary”.
After this adjustment, the price band of Naixue products will move down to the lowest 9 yuan, and 14 yuan to 25 yuan will become its main price range. At present, there are no products with more than 30 yuan.
repeated food safety problems
However, if you spend half a day’s salary to buy a cup of “baifumei”, you may not even pass the basic food safety pass.
On August 2 last year, the media reported that there were “cockroaches on the ground”, “blackened mangoes” and “production label identification errors” in Naixue’s Tea Beijing Xidan Grandjoy Holdings Group Co.Ltd(000031) store and Chang’an shopping mall. Then on August 3, the Beijing municipal market supervision department and the Guangdong provincial market supervision department comprehensively investigated 1811 Naixue tea and similar stores under their jurisdiction, ordered 50 to rectify, warned 2, and filed 23 cases for investigation.
For this matter, Naixue’s tea public relations response was very timely, sent a document to sincerely apologize to consumers, partners and all sectors of society, and set up a special working group for the first time to conduct a thorough investigation and rectification of the stores involved overnight. Naixue expressed his gratitude to the media and the public for their supervision of Naixue. This comprehensive self inspection has found many deficiencies and areas that need to be improved. In the future, similar events will be avoided through strict audit and management improvement of stores across the country.
But after only half a month, Naixue’s tea made the same mistake again. This time, the operation was not standardized.
On August 23, 2021, the State Administration of market supervision and Administration reported that the two stores of Naixue tea were criticized for illegal operation in production. To this end, the law enforcement department plans to impose a fine of 100000 yuan on the two stores involved in Naixue’s tea, and a fine of 250000 yuan and 280000 yuan on the managers of the two stores respectively.
Naixue responded quickly. In the early morning of August 24, she sent a document saying that she would accept the punishment. She was deeply distressed and expressed sincere apology to the majority of consumers. He also said that the company immediately carried out self inspection and self correction against the problems pointed out in the punishment decision of the regulatory department, and required all store employees to operate in strict accordance with the production process to eliminate any non-standard behavior.
Continuous food safety problems knocked down the market value of the company by several billion Hong Kong dollars, of which the decline was 10% on August 3, 2021. In order to stabilize market confidence, the company issued a special announcement, saying:
In order to further ensure food safety and avoid the recurrence of incidents, the company will (including) (I) increase the frequency of employing external service providers to kill the above two Naixue tea shops in Beijing; (II) further improve the automation of the group’s store operation, including the in store inventory management system, so as to accurately track and intelligently analyze the inventory level and the validity period of main raw materials, so as to ensure that the employees in the store strictly abide by and implement the group’s quality control policies and procedures related to food safety and product quality.
However, Naixue’s tea safety problem always seems to linger. In 2022, only in the last two months, complaints about the company from platforms such as black cat complaints have been endless. Problems include moldy goods, dead insects in egg tarts, the use of rotten strawberries, eating glass blocks out of bread, etc., and the most complaints are diarrhea after drinking. Last summer, fund king also bought Naixue’s new product “domineering jade oil Mandarin” at that time. As a result, he had diarrhea in less than an hour.
loss! The share price once fell by more than 80%
Although the products are not cheap, Naixue’s tea doesn’t make money. It always burns money: the money of venture capital institutions before listing and the money of secondary market investors after listing. Before listing, Naixue’s tea carried out up to six rounds of financing, with a valuation of more than 30 billion at one time; After listing, Naixue raised HK $4.84 billion.
However, the tide of capital will always ebb, the sequelae of quality control, which expands rapidly regardless of cost, begins to highlight, food safety problems occur frequently, and the once playing methods are gradually losing their due effectiveness. At present, Naixue has publicly disclosed financial data, which has been losing money for four consecutive years.
From 2018 to 2020 before listing, the annual operating revenue of Naixue tea was RMB 1.087 billion, RMB 2.502 billion and RMB 3.057 billion respectively, and the adjusted net profit was RMB – 56.6 million, – 11.7 million and RMB 16.64 million respectively (the updated loss was RMB 203 million). After listing, it still suffered losses. Naixue issued a profit warning on February 8 this year. The company recorded a revenue of about 4.28 billion yuan to 4.32 billion yuan in 2021, and an adjusted net loss of about 135 million yuan to 165 million yuan.
Such a performance can not sustain the stock price. 9 months after listing, Na Xue evaporated more than 3/4 of the market value. “A cup of tea supporting 30 billion” has become a beautiful capital bubble.
As a representative of high-end products of new tea drinks, coupled with its own “online popularity” temperament, Naixue was highly praised by capital before it went public. With the strong assistance of six investment banks such as JPMorgan and China Merchants Bank International, Naixue sold her shares at a good price of HK $19.8 per share. However, Naixue suffered a break on the day of listing, and then fell all the way to the present, with a minimum of HK $3.65, down more than 80%. On March 21, the latest price was only HK $4.48, and the market value evaporated from the peak of about HK $32.5 billion on the listing day to the latest HK $7.7 billion, down 76%.
Naixue is the first listed company of new tea drinks. It was founded in Shenzhen in 2015 and officially landed in the Hong Kong capital market on June 30, 2021. The actual controllers are post-80s Zhao Lin and Peng Xin.
