The listing journey of rural chicken is further. Recently, the rural chicken disclosed the application draft of the prospectus and plans to be listed on the main board of Shanghai stock market. It can be seen from the disclosed data that the business income of rural chickens mainly comes from the “base camp” Anhui market, which once accounted for about 80%. Faced with the problem of market expansion, the rural chicken chose to join the way after all, and disclosed the relevant contents for the first time in this prospectus. In fact, looking at the Chinese fast food market, including the rural base that has submitted the listing application, the old uncle who has been disclosed for listing guidance and the local chicken, there are few truly national fast food brands, which has also become a difficult problem for such local brands to expand the national market and raise awareness. Some analysts pointed out that listing is only the beginning of a new stage. In the future, rural chickens need to improve their standardized management on the basis of ensuring product quality, so as to develop to chain and large-scale high-efficiency.
initial public disclosure of franchise business
The local chicken is preparing to go on the market step by step. Recently, the rural chicken disclosed the application draft of the prospectus and plans to be listed on the Shanghai Stock Exchange. It plans to issue no more than 63.53 million shares. According to the data, the income of rural chickens from 2019 to 2021 was 2.86 billion yuan, 3.45 billion yuan and 4.39 billion yuan respectively, and the net profit was 160 million yuan, 110 million yuan and 130 million yuan respectively. Judging from the overall data, I did hand in a good answer.
From the distribution of stores across the country, rural chickens are still dominant in the stores in Anhui market. As of December 31, 2021, rural chicken has 991 Direct stores, including 619 in Anhui. According to the prospectus, as the company’s current production and processing base is still mainly in Hefei, Anhui Province, limited by the sales radius of fresh and short-term guaranteed food, the income proportion of rural chickens in Anhui market from 2019 to 2021 has always been at a high level, 82.01%, 79.97% and 70.65% respectively. It can be seen that even if the proportion of Anhui market revenue decreases year by year, the market is still the “highlight” of rural chickens.
In the face of the pressure of outward expansion, the rural chicken finally chose the road of open franchise, and the franchise business was also publicly disclosed for the first time in this prospectus. According to the prospectus, Laoxiang chicken has been engaged in franchise business since 2020. The revenue of this business in 2020 and 2021 is RMB 11.42 million and 83.65 million respectively, accounting for 0.33% and 1.90% of the company’s operating revenue respectively. As of December 31, 2021, there are 82 franchised stores of local chicken, including 54, 26 and 2 franchised stores in Anhui, Jiangsu and Henan respectively.
In fact, last year, it was reported that the local chicken was open to join, and the reporter of Beijing Business Daily also verified this. According to the relevant person in charge, at that time, all the websites about the rural chicken franchise were all third-party false advertisements. The rural chicken did not open to the outside world and was testing the franchise model internally. The testing areas include seven areas, such as Suzhou, Chuzhou and Wuxi, Jiangsu. Now it seems that the franchise business of rural chicken has been running in a low-key way.
On the future development plan of the brand, the reporter of Beijing business daily contacted the local chicken, but as of press time, no reply had been received. It is understood that Feixi old hen, the first fast-food restaurant of rural chicken, opened in Hefei in October 2003. It takes Anhui local variety Feixi old hen as the main raw material, and the signature dish is “Feixi old hen soup”, which was officially renamed rural chicken in 2012.
expansion problems emerge
Although listing is a “qualitative” change for enterprises, it can be seen from the data disclosed by the rural chicken above that the rural chicken is still a distance from the goal of completing the layout of the national market, which may also be an important factor in its open franchise. Laoxiang chicken also said in the prospectus that if it cannot effectively expand the market outside the province, the company will still face the risk of market concentration where its business income mainly comes from Anhui.
Throughout the whole Chinese fast food market, there are few real national chain brands. As a Chinese fast-food brand, rural base, which submitted its listing application in the Hong Kong stock exchange, also faces similar problems. According to the listing application submitted by rural base fast food chain Holding Co., Ltd., as of September 30, 2021, rural base has 602 stores, most of which are located in Chongqing and Sichuan, 343 and 222 respectively.
Indeed, for these local brands, although they have regional first mover advantages, this is also the difficulty of their development. In terms of brand alone, consumers’ awareness is not high. Shu Congxuan, chairman of Laoxiang chicken, once admitted that the market research results of going north to Shenzhen and Hangzhou showed that the popularity of Laoxiang chicken in the country was less than 0.01%. At the same time, there are great differences in different markets. For example, the market competition in the field of Chinese fast food in Beijing, Shanghai, Guangzhou and Shenzhen is very fierce, and the rent, labor cost and threshold are too high. Therefore, although it is further away from listing, the challenges to be faced are also more complex.
Zhu danpeng, an analyst of China’s food industry, believes that although rural chickens have a certain scale effect, listing will bring some financial support. However, from the current development of the brand, its operation mode, products and audience are still relatively single, which is also a factor restricting its rapid development in the future. Not only that, the popularity and store scale of rural chickens in the national market need to be improved.
improve the comprehensive strength of the brand
From the signing of the listing guidance agreement with Guoyuan Securities Company Limited(000728) in September last year to the disclosure of the prospectus, the listing of rural chickens is proceeding in an orderly manner. Wen Zhihong, partner of Hejun consulting and head of chain operation, believes that if the local chicken is successfully listed, it will have a certain significance for the enterprise itself and the Chinese fast food track. On the one hand, for rural chickens, the success of listing means obtaining the support of the capital market and entering a new stage of development. On the other hand, the listing of rural chicken also means that the Chinese fast food chain market has entered a period of rapid development of capitalization, which is also a milestone of the track.
However, the new development stage also means facing new challenges. How to improve brand awareness, influence and market share is still an urgent problem to be solved. And now choose to expand in the form of joining, and the later supervision and operation have also become new challenges. Laoxiang chicken also said that if franchisees do not strictly comply with relevant management requirements in their daily operation, it will have an adverse impact on the company’s operating efficiency and brand image. At the same time, with the continuous expansion of the franchise business of rural chickens, the challenges in system construction, operation management, fund management and internal control of franchise mode also increase.
“The Chinese fast food industry is highly competitive, but the brand concentration is relatively low, and there are few large enterprises with real chain, scale and brand.” Wen Zhihong pointed out that from the perspective of the overall development of the brand, in the face of market competition in the future, rural chickens first need to ensure product quality and taste, so as to catch consumers. On this basis, we will consider how to carry out standardized management and develop to chain and large-scale high-efficiency while meeting the market demand.
“Strengthening the brand R & D and innovation ability can effectively solve the problem of single product and audience. In the future, rural chicken can also empower the brand with the help of the capital market, so as to improve the comprehensive strength of the brand in the short term and form sustainable development.” Zhu danpeng said.
