IPO News | Gu Ming's Hong Kong Stock Exchange: As of 2023, the number of stores was 9001, GMV reached 19.2 billion yuan

The Zhitong Finance App learned that according to the Hong Kong Stock Exchange disclosure on January 2, Guming Holdings Limited (Gu Ming for short) submitted a listing application to the main board of the Hong Kong Stock Exchange, and Goldman Sachs and UBS Group are co-sponsors.

According to the prospectus, Guming is an industry-leading and rapidly growing Chinese ready-to-drink company committed to providing consumers with fresh, delicious, consistent, and affordable high-quality products. According to the Insight Consulting Report, in terms of product sales (GMV) in 2023 and number of stores as of December 31, 2023, “Guming” is the largest popular tea shop brand in China, and the second largest ready-to-use tea shop brand in China at full price. In 2023, the company's GMV reached RMB 19.2 billion, an increase of 37.2% over 2022. As of December 31, 2023, the company's store network had a total of 9,001 stores, an increase of 35.0% over December 31, 2022. Based on the number of stores as of December 31, 2023, the company is one of the top five ready-to-drink brands in the world.

As of December 31, 2023, the number of the company's stores in second-tier cities and below accounted for 79% of the total number of stores. Furthermore, 38% of the company's stores are located in towns and towns far from the center of the city. According to the Insight and Consultation Report, the above two ratios are the highest among the top five popular tea shop brands in China by number of stores.

In the nine months ended September 30, 2023, the company is the only company that can frequently deliver fresh fruit and fresh milk with a short shelf life to stores in low-tier cities among the top ten ready-to-use tea shop brands in China according to GMV. During the track record period, the average delivery cost from the company's warehouse to the store only accounted for about 0.9% of GMV, far below the industry average of 2%.

In 2023, the company's franchisee's single-store operating profit reached RMB 376,000, and the franchisee's single-store operating profit margin reached 20.2%. The estimated single-store operating profit margin of the Chinese public tea shop market during the same period was about 10%-15%. The strong performance of the company's stores has made franchisees have a strong desire to open more stores. As of September 30, 2023, among the franchisees that have opened “Guming” stores for more than two years, each franchisee has operated an average of 3.1 stores, and 75% of franchisees have operated two or more franchisees.

On the financial side, in 2021, 2022, and for the nine months ending September 30, 2023, Gu Ming's revenue was approximately RMB 4.384 billion, RMB 5.559 billion, RMB 4.162 billion, and RMB 5,571 billion, respectively. In the same period, total revenue during the realized period was RMB 23.992 million, approximately RMB 392 million, approximately RMB 291 million, and RMB 1,002 billion, respectively.

Notably, Gu Ming mentioned in the prospectus that the company's future growth depends on the ability to expand and operate the store network. The company may not be able to successfully enter new geographic markets or expand our influence in existing markets. The company's business is highly dependent on consumers' tastes, consumption trends, preferences and perceptions of ready-made tea, and the company may not always be able to accurately predict and adapt to market trends and consumer preferences in a timely manner. The company may be unable to maintain or increase the sales and profitability of the store. The failure of the company's franchisees, suppliers or other business partners to maintain food safety and quality may have a significant adverse impact on the company's brand, business and financial performance.