Reporter | Xiaohan Liu
Recently, "Laowang", which specializes in Cantonese-style health-care white soup hot pot restaurant chain, officially handed over the form to Hong Kong Stock Exchange , and hit the "first share of Cantonese hot pot."
According to the Frost & Sullivan report, in 2020, Laowang's revenue and number of restaurants will rank first among Cantonese hot pot chain restaurants. In terms of revenue, Laowang's market share in Cantonese hot pot is 1.7%; Cantonese hot pot market It is more popular among young people. Among the 1.3 million members of Laowang, 78.4% are 18 to 35 years old.
Under the rule of the Sichuan-Chongqing hot pot market such as , Haidilao and Xiabuxiabu, Laowang seems to be a clear stream. Driven by the strategy of differentiation, Laowang chooses to use pepper pork belly. Chicken soup pot is a signature dish. According to Lao Wang, this dish was once called " phoenix reincarnation". It should be simmered for eight hours. It was originally used to help treat stomach problems and for mothers who just entered confinement after giving birth. Rejuvenated and passed down for generations, this dish has become a classic Hakka dish.
It is interesting to note that the raw material cost of Laowang in 2020 is not as large as Haidilao’s expenditure. The proud health-preserving ingredients have been punished by the Supervision and Administration Bureau for heavy metals; the main layout of the first-tier cities in recent years Weak development, including second-tier cities, GDP lower than other cities in second-tier cities, and Taipei City's unit price is surprisingly high, which is contrary to the unit price of Haidilao. At present, Laowang’s restaurants are mainly concentrated in East China, and it seems difficult to be recognized by the public in the north.
Revenue growth declines
also carries the word "fishing", and also focuses on the mid-to-high-end market. It is inevitable that Kingfisher will be compared with Haidilao. Unlike Haidilao, Kingfisher is more than just Kingfisher hot pot.The prospectus shows that Laowang operates and manages three brands, namely Laowang Hot Pot (hot pot), which provides business and atmospheric meals, a pot season that focuses on the concept of one-person food, and provides quick meals for small gatherings. Convenient dining experience and a fast casual restaurant that caters to young consumers' preferences, Laowang Soul Tripe Chicken Soup.
From 2018 to the first half of 2021 (reporting period), Laowang's operating income was 871 million yuan, 1.095 billion yuan, 1.125 billion yuan, and 647 million yuan respectively; net profits were 59.055 million yuan, 79.915 million yuan, and 6744.10 respectively. Ten thousand yuan and 21.45 million yuan. According to this calculation, the revenue growth rate of Laowang in 2019 and 2020 will be 25.72% and 2.74%, respectively. The revenue growth rate has declined significantly, and the net profit will also decline in 2020.
During the same period, Haidilao’s revenue was 16.969 billion yuan, 25.889 billion yuan, 28.614 billion yuan and 20.09 billion yuan, and net profits were 1.646 billion yuan, 2.34 billion yuan, 309 million yuan and 96.508 million yuan. In 2019 and 2020, Haidilao's revenue growth rate was 52.56% and 10.53%, respectively, and revenue growth rate also declined.
However, from a vertical perspective, Haidilao’s revenue growth is obviously higher than that of Laowang. In 2020, Haidilao’s revenue is more than 20 times that of Laowang during the same period. However, Haidilao’s net profit is also not optimistic, due to the epidemic situation. According to the wrong judgment, its crazy expansion of stores did not get good profits, resulting in a year-on-year decline of about 90% in net profit in 2020. Under the influence of performance thunderstorms, Haidilao’s market value has evaporated by over HK$64 billion. As of September 17 this year, the market value of Haidilao was 170.867 billion Hong Kong dollars.
For chain hotpot restaurants, the essence of achieving continuous revenue growth lies in continuous expansion of stores. Laowang has opened 135 chain self-operated restaurants in 25 cities in mainland China and one restaurant in Taipei. From 2018 to 2021, Laowang opened 19, 19, and 38 new stores, and closed 2 stores, 1 store, and 4 stores respectively. From 2021 until the prospectus is issued, Laowang opened another 12 stores. However, it seems that the stores are not operating as expected, and 4 of the 12 stores have closed.
According to the expansion plan disclosed by Laowang, from 2021 to 2024, Laowang is expected to open 32, 48, 72 and 103 restaurants, respectively.And focus on sinking the market below the second-tier cities. But in fact, among the 136 restaurants currently opened by Laowang, more than 85% (116) are concentrated in the Jiangsu, Zhejiang and Shanghai regions, while there are only 6 stores in the northern region, of which Beijing has 5 restaurants, and Shaanxi has opened 1 store. The speed of opening up stores in the North is much lower than that in East China. Is it because the popularity of Cantonese white soup pot in the north is not good?
The customer unit price far exceeds that of Haidilao
It is worth noting that Laowang, as the main high-end market, has a higher unit price than Haidilao. The prospectus shows that in 2020, Laowang's total income is 1.125 billion yuan, the cost of raw materials is 415 million yuan, and the customer unit price is 128.1 yuan. Based on this calculation, Laowang's customer order raw material cost is 47.25 yuan/person.
In 2020, Haidilao’s total revenue is 28.614 billion yuan, the cost of raw materials is 12.262 billion yuan, and the customer unit price is 110.1 yuan. Based on this calculation, Haidilao’s customer order raw material cost is 47.18 yuan/person, which is basically the same as Laowang, but it is worthy of fun What's more, in 2020, Laowang's 128.1 yuan per customer far exceeded Haidilao's 110.1 yuan per customer during the same period.
Laowang uses pepper pork belly chicken pot as its differentiated strategy. Whether it’s , pork belly or chicken, the raw materials are not cheap. The prospectus shows that Laowang’s pork belly is sourced from local traders in China. The pork belly of Denmark does not use antibiotics or hormones during the breeding process; and the beef is indirectly purchased from Australia and the United States through domestic traders that cooperate with Laowang. Haidilao only mentioned that the mutton was purchased from Haidilao Co., Ltd. in Zalut Banner, Inner Mongolia, in its 2020 financial report.
Under the circumstance that consumers have to spend more per capita consumption, the per capita raw material cost of Laowang is the same as that of Haidilao. And in 2020, Haidilao’s raw material expenditures accounted for 42.73% of revenue, which was 5.83% higher than that of Laowang’s raw material expenditures accounting for 36.90%. This further resulted in Laowang’s actual gross profit margin of 63.1%, which was higher than Haidilao’s 55.5% in the same period. The gross profit margin.
From another perspective, among Laowang’s 136 stores in 2020, the price per customer in first-tier cities is RMB 128.4.The unit price of new first-tier cities is 124.0 yuan, while the unit price of other cities (including second-tier cities, other cities with lower GDP than second-tier cities, and Taipei) has reached 134.7 yuan, which is higher than that of new first-tier and first-tier cities. In contrast, Haidilao, in 2020, the unit price of first-tier cities is 116.2 yuan, the unit price of second-tier cities is 105.7 yuan, and the unit price of third-tier cities and below is 100.2 yuan, which is decreasing as the city's economic level declines.
Weak development in first-tier cities
The reason for the decline in revenue growth is also that the development of Laowang's first-tier cities has entered a period of weakness. Laowang is facing the turnover rate of first-tier cities and the daily service of customers by restaurants. The overall decline in volume, average daily sales and same-store sales.
From the perspective of the turnover rate, from 2018 to 2020, the turnover rate in first-tier cities will be 3.3 times/day, 3 times/day and 2.4 times/day, and the turnover rate in new first-tier cities will be 3.1 times/day. , 3.2 times/day and 2.7 times a day, while the turnover rates in other cities were 2.7 times/day, 2.7 times/day and 2.5 times/day. The rate of platform turnover in first-tier cities is declining. By 2020, the rate of platform turnover in first-tier cities will be lower than that of other cities.
From the perspective of the number of customers served daily by restaurants, the number of customers served daily in first-tier cities from 2018 to 2020 is 305, 273, and 241, respectively, which is declining year by year. In 2019, the daily average number of customers served in first-tier cities is no longer comparable to that in new first-tier cities. By 2020, the average daily service customers of 214 people in first-tier cities will not even match the 246 people in second-tier cities and below. Not surprisingly, the average daily sales of first-tier cities in 2020 is 28,500 yuan, a year-on-year decline of 17.87%, which is lower than the average daily sales of restaurants in new first-tier cities of 32,300 yuan and 33,000 yuan in other cities during the same period.
The same data can also be reflected in the same-store sales. From 2018 to 2019, the same-store sales in first-tier cities were 328 million yuan and 312 million yuan, down 4.88% year-on-year, but in the same period, new first-tier cities and other cities Same-store sales increased by 7.42% and 5.92% year-on-year. From 2019 to 2020, same-store sales in first-tier cities were 424 million yuan and 338 million yuan, respectively.A year-on-year decrease of 20.28%. Although the same-store sales in new first-tier cities and other cities both fell by 13.27% and 7.04% year-on-year, the decline rates were smaller than those in first-tier cities.
Heavy metals exceeding the standard
Laowang stated in its prospectus that it attaches great importance to food safety issues. It is reported that more than 80% of Laowang's stores have achieved a food safety A-level rating, which is much higher than the industry level of 10%. However, during the reporting period, Laowang's food safety problems occurred frequently.
According to relevant media reports, in October 2018, Laowang (Shanghai) Catering Management Co., Ltd. Ruihong Road store made on-site "crispy old fritters" was supervised and sampled, and the content of aluminum potassium sulfate exceeded the limit standard . The store submitted an application for re-inspection, and the retained samples were sent to China Certification & Inspection Group Shanghai Co., Ltd. for re-inspection. The December re-inspection report showed that the aluminum residues in the samples still exceeded the allowable limit of GB 2760-2014 "Standards for the Use of Food Additives" The value is judged as a non-conforming product.
Potassium aluminum sulfate is also called alum or edible alkali. Regular consumption of potassium aluminum sulfate can easily cause osteoporosis, anemia and other consequences. The type of illegal behavior of the store was the production and operation of food that exceeded the scope of food additives and exceeded the limit. The Hongkou District Market Supervision Bureau imposed an administrative penalty of confiscation of illegal income and a fine of 50,000 yuan.
In 2019, the Hangzhou Municipal Market Supervision Administration conducted random inspections of food in the food production, food circulation, and catering services. Lots of old tofu with sorbic acid and its potassium salt (calculated as sorbic acid) are unqualified.
In June 2021, the Market Supervision Bureau of Yuecheng District, Shaoxing City issued an announcement on the verification and disposal of unqualified millet peppers purchased by Laowang (Shanghai) Catering Management Co., Ltd. Shaoxing Shengli East Road Store. The announcement shows that Laowang purchased 1.5 kg of millet peppers on November 20, 2020. The cadmium (calculated as Cd) item does not meet the requirements of GB 2762-2017 "National Food Safety Standards Limits of Contaminants in Foods", and the inspection conclusion is unqualified . These millet peppers have all been chime.
It is reported that as a heavy metal element, the main harm of cadmium to the human body is chronic accumulation. Cadmium can stimulate the respiratory tract. Long-term exposure can cause anosmia, gingival macula or yellow circle. Cadmium compounds are not easily absorbed by the intestine. However, it can be absorbed by the body through breathing and accumulated in the liver or kidneys to cause harm, especially to the kidneys.
In addition, in August 2021, there was a complaint about serious problems with the meat quality of Laowang pot dishes on the Black Cat complaint. The complainant stated that the meat of Laowang had allergies and diarrhea, and the merchant was not responsible. Responsibility, Meituan’s intervention was fruitless, and the complaint has now been dealt with.
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