--- title: "Rushing to list in Hong Kong, Auntie Shanghai urgently needs to 'find the difference'" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/20294082.md" description: "Introduction: Judging from the previous achievements in the primary market, Auntie Shanghai doesn't seem to be highly regarded. On March 24, Chabaidao passed the hearing of the Hong Kong Stock Exchange and is expected to be listed for trading in about a month. This means that nearly three years after Nayuki's Tea (02150.HK) went public on June 30, 2021, the suspense of the "second milk tea stock" has finally been revealed. However, after them, whether smaller new tea beverage companies like Auntie Shanghai can also gain investor attention remains a point of interest. On March 14, 2024..." datetime: "2024-04-01T06:09:57.000Z" locales: - [en](https://longbridge.com/en/topics/20294082.md) - [zh-CN](https://longbridge.com/zh-CN/topics/20294082.md) - [zh-HK](https://longbridge.com/zh-HK/topics/20294082.md) author: "[阿尔法工场](https://longbridge.com/en/profiles/5044766.md)" --- # Rushing to list in Hong Kong, Auntie Shanghai urgently needs to 'find the difference' Introduction: Judging from its previous achievements in the primary market, Auntie Shanghai doesn't seem to be highly regarded. On March 24, ChaPanda passed the hearing of the Hong Kong Stock Exchange and is expected to be listed for trading in about a month. This means that nearly three years after Nayuki Tea (02150.HK) went public on June 30, 2021, the suspense of the "second milk tea stock" has finally been revealed. However, after them, whether smaller new tea beverage companies like Auntie Shanghai can also gain investor attention remains a topic of interest. On March 14, 2024, Auntie Shanghai (Shanghai) Industrial Co., Ltd. (referred to as "Auntie Shanghai") officially submitted its listing application to the Hong Kong Stock Exchange. Now, ChaPanda has taken the lead by passing the hearing. Can Auntie Shanghai catch up and successfully land? **01 The Couple-Owned Store Dominating the North** Like Nayuki Tea and ChaPanda, two listed new tea beverage companies, Auntie Shanghai is also a brand founded by a couple. Founder Shan Weijun was relatively successful in his early years. He gave up a stable job at a state-owned enterprise to work for a well-known foreign company in Shandong, starting as a salesperson and eventually becoming a senior manager. The management experience and business insights he accumulated through hard work, coupled with the strong support of his wife Zhou Rongrong, who had a similar background, led Shan Weijun to decide in 2011 to resign with his wife, sell their house and car, and start a business in Shanghai. The couple drew inspiration from the phenomenon of Shanghai alley aunties selling pearl milk tea with eight-treasure porridge and launched a "freshly brewed five-grain tea" that incorporated blood glutinous rice, red beans, barley, oats, and other ingredients into milk tea, promoting a health concept. At the time, the market was dominated by sweet, generally unhealthy Taiwanese milk tea. Auntie Shanghai's health concept was like a breath of fresh air, quickly winning consumer favor, especially in the north. In Shandong, where Shan Weijun had worked for many years, the freshly brewed, hot drink model aligned with local dietary habits, leading to rapid expansion. Later, to better adapt to national consumer tastes and industry trends, Auntie Shanghai upgraded to a fresh fruit tea strategy in May 2021, adopting the slogan "Love fresh fruit tea, drink Auntie Shanghai." Leveraging the A+ round of financing secured in June of that year for its fresh fruit tea brand, the company further accelerated its expansion. According to the prospectus, as of September 30, 2023, Auntie Shanghai had 7,297 stores, 99.3% of which were franchised, with only 52 directly operated stores. In terms of store scale alone, it ranks third nationwide. Source: Auntie Shanghai Prospectus Stores are distributed nationwide, but unlike other new tea beverage brands with more stores in the south, Auntie Shanghai has 51.4% of its stores in the north, particularly in Shandong, where it has over 1,000 stores, making it the largest mid-priced freshly made tea beverage brand in northern China. Source: Auntie Shanghai Prospectus Additionally, 49% of its stores are located in third-tier and lower cities, which the company believes demonstrates its leading position in the mid-priced freshly made tea beverage market in China's 下沉 markets. Source: Auntie Shanghai Prospectus In addition to freshly made tea beverages, the company also offers snacks like cookies and potato chips. In 2022, it launched a sub-brand called "Hu Coffee" selling Chinese-style coffee, and in 2023, it introduced a budget-friendly version of Auntie Shanghai. However, these ventures currently contribute very little to the company's revenue. For example, Hu Coffee's GMV in the first three quarters of 2023 was only 24.4 million yuan. **02 Struggling to Win Favor in the Capital Market** Judging from its previous achievements in the primary market, Auntie Shanghai doesn't seem to be highly regarded. Compared to other 同行排队上市， Auntie Shanghai's 股权结构 can be described as "lacking star power." Shan Weijun and his wife control 80.64% of the company's shares through Shanghai Puhai, Shanghai Senrui, and Shanghai Yuchao. Its largest external investor is Suzhou Yizhong, holding 7.76%, followed by Jinyi Capital, Shanghai Yuhong, Shanghai Yuyun, and Suzhou Xiangzhong, each holding over 1%. These investment institutions are far less 知名 or financially strong compared to the backers of ChaPanda (CICC), Gu Ming (Sequoia Capital), Heytea (Hillhouse Capital), and 腾讯. This reflects the relatively 冷淡 attitude of the capital market toward Auntie Shanghai. More important than 股东背景 is valuation. In February this year, before submitting its prospectus, Auntie Shanghai completed a Series C financing round with a post-investment valuation of 5 billion yuan. In contrast, Nayuki Tea was valued at 13 billion yuan before its IPO, Gu Ming at 12 billion, and ChaPanda at 18 billion. The relatively low valuation is partly due to the market's more rational approach to valuing new tea beverage companies after Nayuki Tea's 上市， but 更重要的原因 is the company's limited revenue-generating 能力. Compared to brands with similar store counts, Auntie Shanghai's revenue in 2022 was only 2.199 billion yuan, while ChaPanda's was 4.232 billion and Gu Ming's reached 5.559 billion. In terms of adjusted net profit, Auntie Shanghai's 149 million yuan in 2022 was significantly lower than ChaPanda's 965 million and Gu Ming's 788 million. Despite relying on franchising for rapid expansion, Auntie Shanghai's revenue-generating 能力 is notably weaker than its 同行， primarily due to its 加盟策略. Like most new tea beverage brands, Auntie Shanghai's income mainly comes from 加盟商， accounting for 96.1% of total revenue in the first three quarters of 2023. Revenue from 加盟商 can be divided into two parts: sales of goods and 加盟 fees. In the first three quarters of 2023，加盟 fees accounted for 16.4% of Auntie Shanghai's total revenue, down from 19.2% in 2021 but still higher than ChaPanda's 5% and Mixue Bingcheng's 1.8%. This indicates that Auntie Shanghai has a relatively high reliance on "recruiting"加盟商。 To attract 加盟商， Auntie Shanghai launched the "Hundred Days, Thousand Stores" plan in 2022, offering 管理费减免 and allowing 加盟 fees to be paid in installments. This made it the 头部茶饮 brand with the lowest 加盟 fees but also reduced the company's revenue and profit levels. The concessions to 加盟商 did help Auntie Shanghai achieve a 93.25% increase in store numbers from the end of 2021 to the first three quarters of 2023. However, looking ahead, with its store count already ranking third nationwide, maintaining high growth will require more than just concessions—it will need to enhance the brand's appeal to consumers. But judging by order numbers, Auntie Shanghai's appeal to consumers isn't particularly strong. In 2021 and 2022, the average number of orders per store for Auntie Shanghai was 41,661 and 42,682, respectively, while ChaPanda had 68,032 and 73,243 orders during the same period. In other words, Auntie Shanghai chose to sacrifice 加盟 fees (the highest-margin revenue stream) to attract 加盟商， while its sales of goods to 加盟商 were also lower due to lower per-store sales compared to 同行. This has resulted in Auntie Shanghai having many stores but appearing somewhat "虚胖." Finally, returning to the industry itself，所谓新茶饮 is essentially still a 餐饮 business.餐饮 businesses that rely heavily on franchising for expansion inherently face challenges in 业绩核查 during the 上市 process, leading to 天然 skepticism about 业绩真实性—as seen with Luckin Coffee. With multiple new tea beverage companies like ChaPanda, Gu Ming, Mixue Bingcheng, and Chayan Yuese rushing to apply for 港股上市 in a short period, investors are bound to experience 审美疲劳. Auntie Shanghai, with its 业绩 no better than its 同行， will find it difficult to win market favor. **03 Desperately Seeking Differentiation** Not a top performer in terms of 营收业绩， Auntie Shanghai needs a different story to showcase its growth potential if it wants to succeed in its 上市. But reading through the prospectus, all we see are the same "features" emphasized by other new tea beverage brands applying for 上市: the vast potential of 下沉 markets，丰富的产品线， and 广泛分布的门店。 One investor once joked that Mixue Bingcheng opened stores on the top of Mount Tai because that was the only place without competition. While humorous, this reflects the intense competition among new tea beverage brands. In this context, crafting a 全新的 story is indeed challenging, which is why major brands are focusing on 联名 collaborations to add a touch of novelty for consumers. But Auntie Shanghai 似乎也没能抓好这点新意. In 联名营销， it not only failed to achieve positive 出圈 results but also encountered backlash during its collaboration with the game "Light and Night." First，加盟店 employees were found reselling 周边， followed by employees insulting the game's male protagonist, angering 玩家. These incidents may have been the actions of 个别 employees, but they also reflect the company's lack of 重视 for 联名营销 and enhancing brand freshness. If 联名 was just a temporary 疏忽， the deeper issue for Auntie Shanghai is the common problem among 颈部茶饮 brands—the lack of a new story. This is also the 本质原因 behind the rush to 上市. Without Mixue Bingcheng's absolute 规模优势， all operating in the 10-20 yuan price range, with products becoming increasingly 同质化， and inevitably clashing in their national expansion, these brands are eager to use 二级市场的 funds to upgrade 供应链， expand 规模， and 拉开差距 with competitors. But behind all these "commonalities," Shan Weijun still needs to put more effort into explaining the company's less-than-stellar 业绩。 ### Related Stocks - [02589.HK](https://longbridge.com/en/quote/02589.HK.md) - [02555.HK](https://longbridge.com/en/quote/02555.HK.md)