After the listing, Ruisheng once fell below the offering price and its market value dropped to $3.47 billion. But the stock price has rebounded rapidly, operating in a $4 billion to $5 billion box. SEC documents show that many international funds have built warehouses, during which Ruixing Coffee and Starbucks share prices showed a synchronous rise and fall.
In July and August, the stock price of Ruisheng Coffee suddenly decoupled from Starbucks. After a rollercoaster ride, the market value of Ruisheng Coffee broke through 6 billion US dollars, and then fell sharply again. SEC documents show that the top Wall Street hedge fund, Point72, has killed Ruisheng Coffee. The average daily trading volume of the fund accounts for 1% of U.S. stocks, and the average return over the past 20 years is as high as 30%. The manipulation is fierce and the holding period is 2-30 days.
After the Barbarians leave, the stock price of Reichen Coffee is expected to return to normal, that is, to maintain a relatively fixed price ratio with Starbucks, but the value range of the ratio remains to be observed.
Key Points of First Financial Statement after Listing
1) The total number of stores is close to 3000
Lucky never wanted to make the store a place where a cup of coffee soaks for half a day. To a certain extent, Ruisheng Coffee Shop is equivalent to the rookie of Tianmao and the material system of Jingdong. Users place orders online, whether as a point of departure or delivery point, stores are the hub of the chain of performance.
In 2018, the number of new stores opened by Ruixing reached 2064, and the total number of stores reached 2073 at the end of the year. Q1, 2019, the number of new stores is only 297, it is necessary to popular science is the Spring Festival in the first quarter of each year. Q2 in 2019, 593 new stores, 259 more than Q2 in 2018. As of June 30, the total number of Ruisheng coffee shops reached 2963.
Some media think that Ruisheng coffee shop is too close. In fact, the main basis for the location of Ruisheng store is the thermodynamic effort of takeaway orders, which is more targeted than traditional retail chains. Moreover, Ruisheng stores are small in size, and it is relatively convenient to rent or refund another lease. The cost of location correction is low.
2) The product line tends to be rich
In Q2 of 2019, revenue of Xinbu drinks was 659 million yuan, up 55.6% year-on-year; income of other products (light food, etc.) was 211 million yuan, up 23.95% year-on-year; other income (mainly delivery fee) was 39.1 million yuan, up 212% year-on-year; total quarterly revenue was 909 million yuan, up 64.8% year-on-year.
Compared with the same period in 2018, the number of Q2 stores increased by 375% and revenue increased by 648% in 2019.
3) Reduction of loss rate
In Q2 in 2019, Ruixings operating loss reached a record 69 million, but the loss rate has narrowed to 76%.
In H1 in 2019, Ruisheng coffee lost 1.210 billion yuan, with a loss rate of 87.7%. In H1 in 2018, the operating loss and loss rate were 469 million and 348.5% respectively.
Although only the financial data of the last six quarters are available, and most of the Ruisheng coffee stores have been open for less than a year, we can compare the Ruisheng data with the highly mature Starbucks to see what problems can be found and what hope can be seen.
Every time a similar comparison is made, someone always jumps out and says, XX is not YY, it cant be compared. Rich and Starbucks certainly have many differences, but after all, all they do is retail coffee, and they are listed in the United States, facing the same group of investors, not compared with Starbucks to Intel?
Cost structure comparison
The core of the Starbucks model is to create a third space outside the home and workplace. It doesnt matter if people are chatting, listening to music, working or stunned. Later, with WiFi, Starbucks was more like an Internet cafe that could kill time. The difference was that Apple computers were self-made and drinks were expensive.
Starbucksprice orientation is luxury goods that most people can afford, and its target users are three high groups with high income, high education and high aesthetic taste. For this reason, Starbucks needs to provide a better environment to attract and stick high-end users.
Starbucks seldom advertises because stores are both places of business and channels for customers. Users enter and stay to form traffic. Operators sell coffee, drinks and a variety of food is traffic realisation.
The days at StarbucksCompany-operated stores are tough. In 2012, the operating and raw material costs of self-operated stores were US$3.9 billion and US$5.8 billion respectively, accounting for 92% of the revenue of self-operated stores, and the gross profit margin was only 8%.
Over the years, Starbucks has been optimizing its supply chain and increasing its prices several times, so that its gross profit margin has improved. In 2018, the total cost of store operation (including rent) and raw materials accounted for 88% of the revenue of self-owned stores, which was 4 percentage points lower than in 2012 and 1 percentage point lower every 18 months.
Depreciation and management costs are not deducted from the above calculation. In 2018, for example, depreciation and management costs were $1.25 billion and $1.75 billion, respectively. Depreciation will naturally be spread to self-employed stores, which alone accounts for 6.3% of self-employed income. The workload of self-management is more than that of franchise stores (perhaps self-management is easier to manage, but the workload is there). Assuming that 90% of the cost of management is allocated to the franchise stores, it will cost 8% of the revenue of self-management. According to this calculation, in 2018, depreciation and management fees of self-owned stores accounted for 14.3% of revenue, while gross profit margin was only 12%. Star Dads self-run shop is so expensive that he is losing money.
Starbucks can earn reputation even though it loses money. The real financial source of Starbucks is to charge franchise fees, service fees (site selection fees, training fees, etc.) from licensed stores. This is the same reason that Jingdong earns reputation by its own business and profits by providing services to third-party experts.
Starbucks does not directly authorize franchise stores, but expands its market through regional agents.
Starbucks went public in Nasdaq in 1992. In 2009, the total number of global stores reached 166,600, of which 8,832 were self-owned stores, accounting for 53.1%.
As of September 30, 2018, Starbucks had 29.3 million global stores, of which 15.3 million were self-owned, accounting for 52.3%. It can be seen that half self-employed earning reputation, half franchise profit has long been the mature routine of Starbucks.
In the Pan-American region where Starbucks started, franchise stores also account for a high proportion. As of September 30, 2018, the total number of stores in the Pan-American region was 14.6 million, of which 8,575 were self-owned, accounting for 58.7%.
It is worth noting that in Japan and China, the two most important markets in Asia, Starbucks switched to the purely self-owned mode in 2015 and 2018 by purchasing franchise stores from regional agents. By the end of 2018, Starbucks stores in Japan and China were all self-owned.
Previously, Starbucksreal financial path is to charge franchise stores, so the percentage of franchise stores in Pan-American area is more than 40%. The pure self-operation strategy adopted in Japan and China is not the best strategy for Starbucks.
Not to mention Japan, there is a relationship between the change of Starbucks in China and the probability of Rising Coffees rise. Starbucks may have two reasons:
First, self-operated stores like an arm to finger to facilitate price war;
Second, franchisee confidence is shaking. For Starbucks, it may be necessary to absorb losses in the Chinese market under the self-management model, which is not difficult for Starbucks. Maintain the self-operated, franchise mixed mode, in case of large losses of thousands of franchisers in China, will smash the sign and affect the global investment situation.
At the Global Investors Exchange in June 2018, Starbucks announced that by the end of fiscal year 2022 (October 2, 2022), there will be 6,000 stores in mainland China and 240 cities. Starbucks did not say whether it was self-employed or joined.
Self-owned stores lose money even without price war, and there is little room for further price increases in China. Starbucks wished to eliminate the lucky people and restart the franchise model, half of the 6,000 stores in China are self-owned, half of the franchise.
2) Ruisheng Coffee
In 2018, Q2 accounted for 161% of the sales of drinks and food, while in 2019, Q2 accounted for 466 million and 372 million respectively, accounting for 96% of the total revenue, 8 percentage points behind Starbucks self-owned stores.
In Q2 of 2019, the purchase cost of raw coffee materials for Ruisheng coffee was 466 million yuan, accounting for 53.5% of the dietary sales revenue, which was 2.8 percentage points higher than Starbucks. Starbucks has been in the supply chain for 20 years. Its amazing that it has rich experience in supply chain management and large quantity of purchases. Its only three percentage points ahead.
In May this year, Ruisheng Coffee held a supplier conference in Xiamen, with 1500 businessmen from all over the world present. It seems that Ruisheng coffee has made great efforts to reduce the purchase cost.
In Q2 of 2019, the operating cost of Ruisheng Coffee Store was 372 million yuan, accounting for 47.2% of the catering sales revenue, 10.8 percentage points higher than Starbucks, the gap is mainly here.
Of the 2963 Ruixing coffee stores, 597 were open for less than 3 months, 297 were open for 3 to 6 months, and only 290 were open for more than one year, accounting for less than 10%. Any new retail outlet has to be nurtured for six months, even at McDonalds. Ruisheng Coffee Shop has a lot of room for business growth. With the increase of sales, the proportion of operating costs to revenue will gradually decrease.
If the advantage of low operating cost (rent + manpower) will be revealed, Ruisheng coffee can win without franchising.
Why do you say that?
Ruisheng claims that the use of the Internet model has changed the cost structure of traditional retail stores, regardless of rent costs, customer costs, labor costs are far lower than peers.
The location of traditional stores is composed of three elements: location, location and location. To put it bluntly, where the flow of people is more and more, where to Zha, Ruiyun through the Internet to receive customers, according to the subscription unit to place a thermodynamic location, do not have to go to Golden Street, Silver Street Zha, plus the main function of the store is self-extraction, the area can be very small, the rent will certainly be lower than the traditional retail stores.
As for why artificial labor is cheap, Tiger Sniff made it very clear in Lucky deceived you all on May 26:
Any retail store should have a store manager. The key to improve the service level of the store is to train, select, motivate and retain the store manager.
The responsibilities of Starbucks Store Manager include supervising and directing work, making decisions on staffing (recruitment, training, evaluation, punishment, dismissal, staffing and planning) and making plans with various operating tools to achieve excellent store operation.
Tools include schedules, monthly business reports, quarterly business reviews, cash management and inventory management, etc. ,Use management information tools to analyze financial reports to identify and solve trends and problems in store performance...
Rachel Coffee has no shop manager. Its management philosophy is training system rather than trainer. If not, where can Ruixing Coffee find thousands of competent shopkeepers?
The trend of new retail development is to cancel the store manager until the shop assistant is cancelled. Digital location, digital operation, no need for store manager, simple staff training can be employed, so Ruisheng coffee can develop very fast.
If not, its not easy for Richard to dig 3,000 shopkeepers from Starbucks.
There is no manager, staff training can be simply on the job, shops without cash... It is not difficult to understand the low labor cost.
From the cost structure, the same as Starbucks is about 50% of the material procurement cost, while the store operating costs (including rent, labor) this part, Ruisheng has a lot of compression space.