Wo Fu Lo Noodle is not ‘Chinese McDonald’s’


Behind the bright operating mode, and many problems of the fu Lao mian also arise from this, such as the company needs to bear the store operating costs for direct operation mode, the asset burden for the enterprise is heavy.BT Financial Yu Yan recently, the unique taste of food announcement revealed and the government noodles to be listed overseas news, in the capital favored noodle track, and the government catering can through a “bookish” and a bowl of “noble face” up to 7 billion valuation?On January 29, 2022, Juwei Food (603517.sh) announced the overseas listing plan of jiangsu Hefu Catering Management Co., LTD. (hereinafter referred to as “Hefu Noodle”), its subsidiary’s investment company.On January 27, 2022, Shenzhen Wangju Investment Co., LTD. (hereinafter referred to as “Shenzhen Wangju”), a wholly-owned subsidiary of Juwei Food, and the relevant shareholders of Hopu Noodles signed the Framework Agreement on Restructuring of Jiangsu Hopu Catering Management Co., LTD.Said to support the plan, unique flavor food intends to cooperate with the follow-up investment outside the ODI registration and approval procedures, to sign investment agreement, signed share transfer agreement, signed agreement and related transaction documents the action and so on related work, and in accord with taking a stake in the company and government mein listed abroad purpose and does not damage rights and interests under the premise of company ownership, adjustments to the investment scheme, implementation path.If The IPO can be successful, it means that the company will expand more financing channels, which will have a positive impact on promoting the long-term development of its business. As an investor, Jiweifang Food is naturally “happy to see this” and especially supports the listing plan of Hopu Noodles.However, in today’s crowded Chinese catering track, the continuous impact of the epidemic on offline catering, and the increasingly cautious and stringent investment activities of institutions, can Helu Lao Mein really continue to tell a good capital story with a bowl of “noble noodles”?And fu Lao noodles Chinese standardization dream and fu Lao noodles behind, is a restaurant industry is not experienced crossover entrepreneurs.Before entering the “noodle shop business”, the founder Li Xuelin used to do 3C category in Jiangsu Jiitong. Although it has become a local leading enterprise, it has very little connection with the catering industry. Therefore, in order to make up for the lack of experience, Li Xuelin and his team spend tens of millions of yuan to taste local noodles all over the country and even the world.In the process of research, xue-lin li found the weak link of Chinese style restaurant, because China is a large country, the domestic various regions have formed a distinctive food culture, and Chinese food is particularly exquisite materials order, cooking temperature, taste often vary from person to person, western fast food and name the standardization of food quality management is very difficult.In order to solve this problem, before the official operation of the first Hopu Noodle store, Hopu Noodle chose to prioritize the establishment of supply chain, invested nearly 60 million yuan to build a 15,000 square meters Hopu Central Kitchen, which can meet the basic operation of 1,000 + stores in the future, and began to invest in the construction of digital capacity, to open the front, middle and background business.Break through internal information barriers.It can be seen that they attach importance to the management basis, and can also be seen that hefu Lao noodles hope to “make the plate bigger” determination.In late 2012, Hemfu Lao Noodle officially entered the store expansion stage, focusing on the first and second-tier cities with rapid economic development and high consumption level. It took the lead in opening offline stores in Shanghai, and then spread out widely in East China.According to statistics, There are 440 stores operating in The country, and the proportion of stores in first-tier cities and new first-tier cities is as high as 81%.Compared to other established a fast food restaurant, and the government can choose more controllable mode of stores, franchisees to join the streamline model and enlightenment process, scale and store location will be more directly to the point in our own hands, also makes the scoop surface and the government realized the purpose of accurate target markets, in 2020-2021, nearly double increase in the number of shops,On average, a new Ho Fu lo mein is born almost every two days in business districts and office buildings around the country.In the store decoration and fu Lao noodles are also more into the current most popular elements of the country tide, to senior atmosphere sense style play, to brand unique “Chinese study” decoration style as the main force, successfully create brand differentiation.Such a novel and unique style is also favored by many shop hunters and urban white-collar workers, which has aroused heated discussion on platforms such as Xiaohongshu, Dianping and Meituan.It is not difficult to see from the operation mode of Hefu Lao Mein that the company hopes to ensure quality and control cost by actively embracing standardization and digitalization, striving to become a rare “standard surface” in Chinese fast food.Also invested in professional R & D team, to health and health as the focal point, the formation of taste of the public “classic noodles”;Moreover, cultural and artistic elements such as study rooms and national tide are used to create a sense of high-grade, targeting young and price-insensitive groups with strong consumption power, and creating a “noble surface” with high premium price.In addition, just stepping on the heat of noodles business in 2021, Helfu Lo noodles successfully completed the ROUND E financing of 800 million yuan in July 2021, setting a new record of noodles financing amount in the domestic catering industry, and its valuation is up to 7 billion yuan.Direct mode of scale expansion dilemma but in the bright operating mode behind, and fu Lao noodles a lot of problems also arise.First of all, the store operation cost that the company needs to bear for the direct operation mode is too heavy for the enterprise’s asset burden. Although the company has mastered the initiative of management, due to the different situation of each store, it is difficult to manage, and the energy and personnel cost required are also very high.In July 2021, just after obtaining the E round of financing, the “dead rat incident” was exposed in The Hefu Lo Mein on the second floor of jingpin Shopping Mall on Yuyuan Road, Shanghai. The “calmly throwing away” that the shop assistant was used to, triggered continuous hot discussions on Weibo and became a hot search.Although the company promptly apologized and promised to rectify the situation, consumers were still scared.Meituan, Dianping and other dining reviews also have a lot of negative news, some directly owned restaurants during the peak hours of the dining line management questioned, think that there are queue jumping, order order disorder;Some of the shops expressed dissatisfaction with the sanitary situation, on the table, table and even in the face to see the bodies of insects;There is also disappointment with the quality of the ingredients on offer, sour noodles are still on sale and there is a large amount of unpicked pig hair on the trotters……Even some loyal customers bluntly say that the quality of dining in Hefu Lo Mein is declining.Secondly, he Fu Lao noodles in the high-end positioning also to conquer the sinking market has hindered.According to statistics, and government get the unit price is around $40-60 yuan between, regardless of the environment and dining experience, noodles as a traditional Chinese food, the streets everywhere, consumers are already accustomed to the powder surface category “affordable, economical and practical”, 60 yuan per capita consumption as “a noodles”, the price is on the high side,There may be short-term novelty hunting in the second and third tier cities, but it is difficult to achieve high re-purchase and habitual consumption in the broad market.Finally, even if in the short term, Hefu Lao noodle is unique among domestic noodle restaurants, but in the past, there are old chain stores such as Mr. Lee noodle Restaurant and Ajisen Ramen, which can not be underestimated, with years of influence and brand power to form a oppression;After meeting small noodles, five ye mix noodles, Zhang Lala, Ma Jiyong, Chen Xianggui and other cutting-edge, with the capital of all parties to carve up the market;There are also “noodle shops for husband and wife” and “noodle shops for family” in various cities, which firmly lock the original residents with the old taste and economic benefits.In these competing shops, the unit price of most brands and shops is lower than or even far lower than that of Hefu Lao noodles. With a “bookish spirit”, Hefu can hardly continue to increase the premium price of a bowl of noodles by 10-30 yuan, which is higher than the market price.After hefu Lao noodles has begun to take shape, we should consider how to keep the steady growth of performance and improve their ability to resist risks.How is the noodle business in the eyes of capital?In a press conference held by The State Council news on July 15, 2021, the National Bureau of Statistics introduced that in the first half of 2021, the national catering revenue was 2.171.2 billion yuan, up 48.6% year on year, and the scale was basically the same as in the first half of 2019.China’s online retail sales totaled 6.11133 billion yuan, up 23.2% year on year.It shows that the catering industry is recovering from the repeated epidemic and showing a good form of stability and rise.Among them, noodle racetrack has been hot in the past two years and will explode in 2021. As of November 2021, there have been 18 noodle financing events with a total financing amount of more than 2.6 billion yuan.Among them, Hefu Noodles completed round D and E financing, totaling about 1.25 billion yuan;Meet Xiaomian completed A+ round of financing and received strategic investment, totaling about 110 million yuan;Wuye noodles completed the A round and A+ round of investment, with the amount exceeding 300 million yuan;Zhang Lala, Ma Jiyong, Chen Xianggui, jin Noodle Hall, porcelain face jianghu, Big brother have also accepted investment from different companies and institutions.A lot of people are feeling that “starting a business is better than selling noodles” at the same time, but also can not help wondering why the capital will be particularly optimistic about noodle business?From the point of product supply system, after long-term chaos and chaotic management, since 2018, such as is very serious, today day drawing capital, capital fund and so on agency head start layout food supply chain in China, after years of development, product supply situation has been relatively mature, for the restaurant chain to provide better development soil, the attention of the capital.From the perspective of development prospect, The market potential of Noodles in China is huge, the people have naturally formed the consumption habit of noodles, but has not formed a real “big MAC”, even though lanzhou noodles, Chongqing xiaomian and other local characteristics of noodles can be seen everywhere, but the reputation is different, praise and criticism, standardized brand chain stores still have the opportunity to grow bigger and stronger.However, the performance of existing noodle listed companies in the capital market is not optimistic.The stock price of ajisen China (00538.HK), a veteran ramen noodle company, has been falling continuously since mid-2019, and only recovered slightly recently. By the end of February 11, 2022, the market capitalization was only 1.375 billion Hong Kong dollars.Tan Zai International (02217.HK), a yunnan rice noodle brand, did not see a boom after its listing, with a market value of 3.914 billion Hong Kong dollars as of February 11, 2022.By contrast, although we can see from the limited data that In the first half of 2021, Hopu Lao Mein successfully turned from loss to profit, with a net profit of 13.8574 million yuan, showing signs of getting rid of the shadow of the epidemic, the valuation of 7 billion yuan is particularly conspicuous in the noodle race.Li Xuelin, founder of Hopu Noodles, also said: “We are thinking more about how to make Hopu live longer. Sustainability is the hardest thing in the restaurant industry.”For the current Helfu Lao noodles, it is one thing to arouse the interest of capital, but how to increase customer stickiness and deliver continuous vitality for the main business is more important. After all, the rise of catering brands still needs to be based on the market, and long-term deep cultivation and precipitation between stores and customers.This article is for reference only and does not constitute investment advice.Investors should not use this report as their sole reference in making investment decisions or as a substitute for their own judgment.

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