Introduction:The new-style tea brand Nayuki has officially submitted an IPO application to the Hong Kong Stock Exchange, planning to raise funds for store expansion, digital upgrades, and supply chain strengthening. Since its establishment in 2015, Nayuki’s number of stores has grown nearly tenfold within just three years, yet it has yet to turn a profit. This article delves into its financial performance, store expansion strategy, and the innovation of its Pro store format, offering insight into the current status and challenges of this tea brand as it strives to become the “first IPO of new-style tea drinks.”
On February 11, 2021, the well-known new-style tea brand Nayuki submitted an application for listing to the Hong Kong Stock Exchange, officially initiating the IPO process. The listing is jointly underwritten by internationally renowned investment banks JPMorgan Chase, CMB International, and Huatai International, with the raised funds expected to accelerate store expansion, upgrade digital operations, and improve the supply chain system.
As early as the beginning of last year, Nayuki attempted to submit a prospectus to the U.S. SEC but ultimately chose to withdraw due to the impact of the pandemic. A year later, the brand turned to the Hong Kong stock market in search of a breakthrough. If this listing is successful, Nayuki Tea could become the first listed company in China’s new-style tea industry.
According to the prospectus, as of September 30, 2020, Nayuki had established 420 stores across 61 cities nationwide and had entered the markets of Hong Kong and Japan, opening one store in each location. Notably, since its founding in 2015, the brand’s number of stores has rapidly expanded from an initial 44 to 422, nearly tenfold in just over three years, demonstrating an astonishing pace of expansion.
Founded in 2015 and headquartered in Nanshan District, Shenzhen, Nayuki is a subsidiary of Shenzhen Pindao Catering Management Co., Ltd. The brand has completed multiple rounds of financing, with major shareholders including Linxin Holdings controlled by the founders Mr. Zhao and Ms. Peng, the company’s equity incentive platform, and investors such as Shenzhen Tiantu Capital.
In terms of store types, Nayuki primarily operates two formats: standard tea shops and the newly launched Nayuki PRO stores at the end of 2020. Standard stores include Nayuki Gifts, Nayuki Wine Bar, and Nayuki Dream Factory, catering to different consumption scenarios and functions. Nayuki PRO, on the other hand, targets urban office workers and densely populated residential areas, dividing its product line into four modules: coffee, tea, light baking, and snack retail, with greater emphasis on convenience and a diverse consumer experience.
Compared to its previous focus on high-end commercial districts, Nayuki PRO stores will primarily target business districts and large residential communities in first-tier and emerging first-tier cities. The first batch is planned for cities such as Shanghai, Beijing, and Xiamen. The brand expects to open about 20 PRO stores before the Spring Festival and has set a goal of adding approximately 200 PRO stores throughout 2021.
However, rapid expansion has not yet translated into corresponding profitability. The prospectus shows that Nayuki’s revenue for the first three quarters of 2020 was 2.11 billion RMB, yet it still recorded a loss of 27.51 million RMB. Looking further back, the brand posted losses of 69.73 million RMB and 39.68 million RMB in 2018 and 2019 respectively, remaining in the red for three consecutive years.
Looking ahead, Nayuki plans to open about 300 new stores in first-tier and emerging first-tier cities in 2021, and around 350 in 2022, with approximately 70% of these being Nayuki PRO stores. This highlights the brand’s focus and investment in this new store format.
Overall, while Nayuki Tea has demonstrated strong ambition in market expansion and sought differentiation through product and store innovation, how to improve profitability alongside expansion remains its most critical challenge in facing the market and investors. If the IPO is successful, it will not only make Nayuki the first IPO in the new-style tea sector, but also provide the brand with more stable funding support and development opportunities.
The above content is compiled by CoffeeHunters, a coffee news website.
