Is the parent company Xiabuxiabu dragged down?

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"One white hides one hundred ugliness.

" The cou-cou, with high hopes, not only concealed the embarrassing situation of the Xiabuxiabu brand, but also became the core key to the long-term value of Xiabu Xiabu.
But the progress of the whole thing is by no means as clear and simple as the "second curve lifts off".

Lost growth rate

Lost growth rate

Making a fortune with the price-performance ratio and forcibly tearing off the price-performance label is tantamount to pushing consumers out of the door.

Beginning in 2016, Xiabuxiabu offline stores entered a period of rapid expansion.

At that time, the company set a "Thousand Store Plan" to achieve 1,000 directly-operated stores in 2019.
In 2018 and 2019, there was a net increase of 148 and 136 restaurants respectively.

However, while the number of stores continues to increase, its various operating data has declined significantly.

Taking 2019 as an example, the company's annual revenue growth rate dropped from 29.

2% to 27.
4% year-on-year, net profit attributable to the parent decreased by 37.
7% year-on-year; seat turnover rate decreased from 2.
8 times to 2.
6 times, and same-store sales growth rate dropped from 2.
1 -1.
4%.

The increase in the number of stores cannot conceal the stagnation of its growth capacity.

There are multiple reasons behind this.

More than 20 years ago, Xiabuxiabu created the original bar table small hot pot model.

However, after tapping into the hot pot market with the precise positioning of "fast food + hot pot", in order to upgrade the brand and obtain better profitability, Xiabu began to try to tear off its own parity label and transform the "fast food model" to the "light meal" model.
.

The per-customer price of Xiabuxiabu stores has risen sharply, from an average of 40-50 yuan to 70-90 yuan, and many stores in Suzhou and Shanghai have even risen to 80-100 yuan.

But at this time the hot pot market is already very hot.

Compared with Xin Spicy Fish Head Hot Pot, Banu's Maodu Hot Pot, Haidilao Hot Pot featuring service, etc.
, Xiabu talks about product features, hot products, and service.

Make a fortune with the price-performance ratio and forcefully tear off the price-performance label, and some consumers choose to leave.

Since 2017, the turnover rate of Xiabuxiabu stores has been declining, which has been combined with the increase in customer unit prices.

At the end of 2019, Xiabu's "Thousand Stores Plan" was completed.
However, under the combined effect of various factors, the growth rate of same-store sales in each region has continued to decrease.
In 2018 and 2019, the growth rate of same-store sales was much lower than market expectations, and again showed negative growth.

What's more unfavorable is that although store expansion has brought about 20% annual revenue growth, the net profit growth rate has fallen all the way.
Especially in 2019, it even fell into a situation of negative growth of 37.
7%, and the typical increase in income did not increase profits.

Rising costs is another important reason that restricts Xiabu's performance improvement.
In the cost structure of the catering industry, the bulk of the expenditure is rent, food materials and labor.

Xiabuxiabu and Coucuo are in the expansion period.
The total number of new additions in 2017-2019 is 87, 89, and 148 respectively.
Coupled with the high-end positioning of Coucou, most of the stores are opened in high-end shopping malls, and the store area is between 400-600 square meters, and it is difficult to reduce the rental cost.

Beginning in 2016, Xiabu upgraded some of its stores.
This change caused a significant increase in the amount of depreciation.
In 2019, the amount of depreciation and amortization was 839 million, a 279.
6% increase from 221 million in 2018.

Upgrades and expansions have also brought about a significant increase in the number of employees, and the proportion of Xiabu's employee costs has increased year by year, reaching 25.
6% in 2019.

As the red line of the catering industry, food ingredients have no room for decline in quality.
Although many chain restaurants choose to streamline the supply chain and the production of dishes to reduce the cost of ingredients.
However, Xiabu's raw material costs accounted for around 37%.

In 2019, the consumer price index of food and livestock increased month by month, especially in the second half of the year, the growth rate of the consumer index of food and livestock increased again from the previous month.

Beef and lamb have always been the most indispensable part of hot pot.
As the price of pigs is still high, the demand for beef and mutton has further increased, prompting the price of beef and mutton to rise for six consecutive months.

The rise in raw material prices has led to a 24.
7% increase in raw material costs, accounting for 36.
9% of revenue, and Xiabuxiabu's profit margin has been further compressed.

Rescued soldier

Rescued soldier

Coucou has great potential for future growth and strong expansion logic.

With Xiabuxiabu's profit declining, Coucou Hotpot, which was once not optimistic, is catching up.

The Coucuo brand was established in 2016, and its revenue in 2018 increased by 374.
9% to 556 million yuan, achieving overall profitability.
In 2019, Cocoa’s revenue doubled and expanded to 1.
2 billion yuan, accounting for 19.
9% ​​of Xiabu’s total revenue.

Different from Xiabu's civilian route, Coucou is positioned as a mid-to-high end, directly benchmarking Haidilao, focusing on the “hot pot + tea and rest” catering complex innovation model, with a customer unit price of around 130 yuan.

The average gross profit of tea drinks is generally 80%-90%.
In the case of rising costs in restaurants, tea drinks have become a coup to improve the efficiency of the floor.
In an interview with the media, Xu Yiwen, the marketing director of Coucuo, said that the tea portion has accounted for 20% of Coucuo's turnover, and the turnover of tea delivery has exceeded 40%.

Through differentiated operations, Coucuo Restaurant has completed its goal of opening 100 stores in three years, opening an average of 7 stores per month.

As of the end of 2019, Xiabu has opened 102 Coucuo restaurants in Jiangsu, Hubei, Shandong, Beijing, Shanghai, Hong Kong and other places, with strong store growth.

In 2018, Coucou Hotpot began to turn losses into profits, achieving a profit of 64.
8 million yuan, and then entered the fast lane of development.
In contrast, Xiabu hot pot's share of total revenue has been shrinking.

The data shows that in 2019H1, the turnover rate of Coucou was 4.
1, the “industry benchmark” Haidilao was 4.
8, and the chain restaurant rookie Taier was 4.
9; in 2020H1, the gap between Coucou and the two has narrowed.

From 2017H1 to 2020H1, the revenue of Coucuo Hotpot's single-store is greater than that of Xiabuxiabu, and the revenue of single-store from 2019H1-2020H1 surpassed Taier pickled cabbage fish for the third consecutive quarter.

The management of Coucou also stated to the public that the operating profit at the restaurant level of Coucou is basically close to that of Xiabuxiabu, which means that Coucou's profitability has been maintained at a relatively high level.

In a research report by China Securities, it also expressed optimism about the profitability of Coucou.
After predicting, splitting and comparing the single store models of Coucuo, Xiabuxiabu and Haidilao, we found that:

From a comparison point of view, the operating efficiency of the mature single store of Coucuo Restaurant has been stable and high-quality.
As a traditional hot pot track product, its turnover rate is close to that of Haidilao, another leading brand.
In the structure of the ratio of various costs to revenue, there is a certain degree of stability and similarity as a whole.

At the same time, the more important single-store net interest rate and investment recovery cycle, Cocoa has basically reached the industry's leading level, which also guarantees its sufficient competitiveness and expansion power.

The net profit margin of Coucuo's single-store level is about 15%, which is already the leading level in the industry.
The investment payback period for a single store is expected to be about 16 months, and there is still room for cultivation and improvement.

On the whole, although the transcript of the Coucou single-store model still has some gaps with the benchmarking company Haidilao, it performed well.
After undergoing market inspections, the Coucou model has been basically accepted by the catering market and has become a new hot pot sub-category, and dominates it.

Dragged down?

Dragged down?

Under the strong situation of Coucou, the overall revenue of Xiabuxiabu Group experienced a 9.
5% decline.

As the time enters 2021, the crowd in front of the Coucou store does not mean to decrease.

At the same time, affected by multiple factors such as the Spring Festival consumer boom, Xiabuxiabu's stock price rose 60% in 11 trading days.

This time it was interpreted as the value of the Cocoa brand was finally discovered and recognized by the market, but the good times did not last long.
With the fluctuation of the Hong Kong stock market, its stock price quickly fell back to its original point, and the market value returned to 20 billion Hong Kong dollars.

On March 4, Xiabuxiabu stock price plummeted 11.
78%.
On the second day, the company issued an announcement stating that the group expects that its operating income in 2020 will drop by about 9.
5% year-on-year, and the annual profit will be between 10 million and 20 million yuan, a year-on-year decrease of about 93.
1%-96.
6%, which is far lower than the 290 million in 2019.
yuan.

The severe epidemic in 2020 is one of the most critical factors affecting Xiabu’s full-year performance.
However, after the financial data was released on March 5, Xiabu’s stock price rose sharply.
Some analysts believe that this will be the same as the company’s next year of 2020.
The rapid recovery of half-year performance is closely related.

Coucou CEO Zhang Zhenwei revealed that as early as March-April 2020, Coucou’s revenue "has almost recovered 70% to 80%.
"

According to data from the 2020 mid-year report, the revenue of Coucuo Restaurant increased by 21.
3% year-on-year to 591 million yuan, while the net revenue of the Xiabuxiabu brand dropped by 44.
4%, leaving 1.
223 billion yuan.

Many analyses generally attribute the growth of Coucou to an increase in the number of stores, but the actual situation is that due to the epidemic, Coucou will only increase 5 stores in the first half of 2020.

In contrast, Haidilao opened 167 stores in the first half of 2020, but the year-on-year growth in operating income was -16.
54%.

In other words, Coucou only opened 5 new stores and achieved a 21.
3% revenue growth in the first half of 2020 when the epidemic is raging.
Its popularity is far beyond imagination.

In the second half of 2020, in order to complete the full-year store opening plan, Coucou launched a large-scale retaliatory store opening, and received a warm welcome wherever he went.

For example, in Nanning, Changzhou, Ningbo and Nantong in Guangxi, the number of people waiting in line for the first month of the store's opening exceeded 100.
In November, the Zhuhai Youtehui store opened.
On the first day, more than 600 seats were taken throughout the day, and there were 135 groups of seats until 22:00 in the middle of the night.

However, looking at the group’s financial data for the whole year, we will find that Xiabuxiabu’s revenue fell 44.
4% in the first half of the year.
It is very likely that the situation in the second half of the year will not change much, and it will be so popular in the market.
Under the circumstances, the overall revenue of the group has declined by 9.
5%.

According to the current situation, Coucou stores are still concentrated in first-tier cities.
Among them, the number of stores in Beijing and Shanghai is about 50, accounting for one-third of the total number of stores.

High acceptance in high-tier cities is generally a good thing for Cocoa.

On the one hand, it is the recognition of high-tier cities, which means that second- and third-tier cities will accept Coucou’s brand, model, and culture more smoothly; on the other hand, there is also the opportunity to strengthen its high customer unit price during the sinking process, and ultimately like Haidilao.
, To achieve high profitability in second-tier cities.

Write at the end

Write at the end

In the big hot pot market, Coucou’s exit from the circle is just the right time: consumers are starting to get tired of the Haidilao-type standard product model, hoping to get fresh stimulation.
A cup of milk tea can provide a different consumption experience.

But Haidilao is obviously not a role to be slaughtered, and face-to-face competition is inevitable.

Coucou's "base camp" is not so worrying.
In the relatively poor soil of Little Hot Pot and Xiabuxiabu, a tree that was too tall suddenly grew.
This will be a big challenge for the internal management and benefit distribution of the enterprise.

In 2018, Zhang Zhenwei once stated that he would create a three-legged brand camp of "Xiabuxiabu + Coucuo + New Tea Drinks", in which "Coucuo strives to be listed separately within two years.
" But until 2020, it did not come out again.
Any news related to the separate listing of Coucou.
At the same time, Zhang Zhenwei, the head of Coco, has always been erratic: from "General Manager of Coco Hot Pot" to "Coco CEO", and the title "Coco founder" occasionally appears.

The trade-offs between the two brands, the differences in policies, resource support and inclination, all test the management wisdom of the group.
Regardless of the end result of the two brands of Coucuo and Xiabuxiabu, the case of Xiabu Company is enough to be written into the textbook of Chinese business management.

Source: Juchao Business Review

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