With 1699 "Yiming Real Milk Bar" Landing A Share, Yiming Food "Central Factory + Chain Store" Mode Has Attracted Much Attention

Zhejiang Yiming Food Co., Ltd. (hereinafter referred to as "Yiming food") with 1699 "Yiming real milk bar" is about to land on a shares.

According to the prospectus, Yiming food plans to issue no more than 61 million new shares and raise 927 million yuan, which will be used for the construction of marketing network direct milk bar, Jiangsu Yiming food production base, new project of 30000 tons of baked goods, R & D center and information construction project. The application will start on December 16 (this Wednesday).

For consumers in Zhejiang, Yiming food is not a strange name. It focuses on low-temperature yogurt, low-temperature fresh milk, and also sells baked food. Since its first store in 2002, Yiming real milk bar has spread all over the streets of Zhejiang Province.

Due to the obvious characteristics of low-temperature short-term insurance and sales radius limitation of product transportation and distribution, the short board of Yiming food is also obvious: the market is concentrated in Zhejiang region.

This landing in a shares, Yiming food's ambition is self-evident. 270 million of the 927 million fund-raising will be used to build Jiangsu production base, which means that the dairy enterprise, which has been deeply cultivated in Zhejiang for many years, will accelerate the expansion of the market in East China.

According to the prospectus, Yiming food plans to issue no more than 61 million new shares and raise 927 million yuan. -Photo by Gan Jun

Break through regional restrictions

Yiming food is mainly engaged in the research and development, production, sales and chain operation of fresh dairy and baked food. Its products are positioned as "fresh, healthy and nutritious". The shelf life of dairy products is usually less than 15 days, and the shelf life of baked food is usually less than 4 days. It is mainly sold through the chain stores of "Yiming real fresh milk bar".

Yiming food believes that, compared with the "central factory + wholesale distribution" mode represented by Xu Fuji and Taoli bread, or the "chain store + on-site production" mode represented by bread neologism and 85 ° C, "Yiming real milk bar" is an innovation in sales channels of traditional wholesale and retail outlets and supermarkets, forming a differentiated competition of "central factory + chain stores" 。

As of June 30, 2020, the company has established 1699 milk bar stores in Zhejiang, Jiangsu, Fujian and Shanghai in East China. These milk bars become the cash "cows" of the company, and the relevant sales revenue accounts for more than 77% of the company's main business income.

Although Yiming food has gradually expanded to other regions outside Zhejiang market since 2006, its production base is still mainly located in Wenzhou, Zhejiang Province, limited by the sales radius of fresh and short-term food, Yiming food has a high dependence on Zhejiang market. There are 14299 stores in Zhejiang. From January to June in 2017, 2018, 2019 and 2020, the proportion of revenue from Zhejiang market was always at a high level, which was 90.84%, 89.75%, 87.97% and 89.26% respectively.

"Low temperature fresh milk has higher requirements for cold chain logistics than normal temperature fresh milk, so the regional characteristics are more obvious." A dairy industry person told the 21st century economic reporter.

From the perspective of this project, Yiming food takes Jiangsu as the main position outside Zhejiang Province and plans to build a new food production base in Changzhou, Jiangsu Province. After the completion of the project, the annual production capacity of 9.49 tons of milk drinks and plant protein drinks and 24100 tons of baked food will be realized. Judging from the current layout of Yiming, Jiangsu is also a region with good market base except Zhejiang. As of June 30, this year, the number of stores of "Yiming real milk bar" in Jiangsu was 234, second only to Zhejiang, among which the number of stores in Nanjing reached 154.

As for the reason why Changzhou was chosen as the production base, Yiming food explained that "Changzhou is located in the south of Jiangsu Province, and the distance from major cities in the Yangtze River Delta, such as Nanjing, Suzhou, Shanghai and Hangzhou, is shorter than that of Wenzhou." With the follow-up construction of Jiangsu Changzhou production base and putting into use, the company will further increase the market coverage of Jiangsu and surrounding areas.

Low gross profit franchise model

At present, "Yiming real fresh milk bar" sales mainly through the combination of franchise and direct marketing operation mode. The reporter noted that among the 1699 milk bar stores, 441 were directly operated stores and 1258 were franchise stores. The number of franchise stores was 2.85 times that of Direct stores. From 2017 to 2019, franchise stores are in the period of accelerated expansion, with a surge of 524 in three years, and the number of new stores each year is greater than that of Direct stores.

The reason for the rapid increase in the number of franchise stores in milk bars is, to a large extent, due to the low threshold for joining.

Yiming food said that before the reporting period, the franchise fee standard of the company was relatively low, ranging from 20000 yuan to 50000 yuan, which was adjusted to 50000 yuan since 2015. In 2017-2019 and the first half of 2020, the company's single store franchise fee was 46200 yuan, 46700 yuan, 46500 yuan and 46300 yuan, respectively.

The validity period of the "commercial franchise contract" signed by the company and the franchisee is 3 years. The franchise fee is charged when the franchise store is opened for the first time and renewed every three years. This means that the franchisee can obtain the franchise right of "Yiming real milk bar" for three years with only one-time payment of less than 50000 yuan.

In addition, the company also mentioned that the single store franchise fee charged is slightly lower than the amount excluding tax agreed in the contract. As some franchise stores belong to new regions or new business formats, the company will reduce or reduce the franchise fee as appropriate to support the market development of franchise stores.

In comparison, the franchise fee of Yuanzu shares, which is similar to the company's business model, is about 332500 yuan / 3 years (data from Yuanzu's share prospectus). Yiming food's franchise model is also considered "radical" by the market.

Although Yiming food makes stores blossom everywhere through franchise mode, the gross profit margin of franchise mode is far lower than that of Direct stores. Taking the first half of this year as an example, the gross profit margin of franchise stores was 31.68%, which was far lower than 61.52% of Direct stores, 46.08% of direct sales channels, and also lower than the industry average of 43.96%.

In the process of issuance audit, Yiming food's direct marketing and franchise mode has also attracted attention. It is required to explain whether franchisees and franchise stores are operating in accordance with the law, and analyze the difference of gross profit rate of the same product under different sales modes and its rationality.

Perhaps it is aware of the problems existing in franchise stores. In the first half of 2020, the expansion speed of "Yiming real milk bar" franchise stores slowed down, with 40 new stores added in half a year, while the number of new direct stores was 103, and the number of expansion stores of the latter surpassed the former for the first time.

Yiming food explained that "from 2019, with the company's profit accumulation and improvement of operation and management, it has gradually strengthened the construction of Direct stores."

From the reaction of market participants, Yiming food has been paid more attention.

The company's scale of operation has been significantly higher than that of the traditional dairy enterprises. The overall operation is stable. If the company develops smoothly in Jiangsu and Shanghai, the company's revenue and net profit are expected to double. What needs to be vigilant is the risk of large-scale epidemic disease and relying on single brand and main products An institutional source told reporters.