We are a leading brand in China’s edible bird’s nest (“EBN”) product market, dedicated to the development, production and marketing of high-quality modern EBN products. We are the largest EBN product company in the traceable EBN market in China with a market share of 14.0% in terms of retail value in 2022, according to the F&S Report. We also ranked No. 1 by the number of EBN specialty storefronts and the volume of CAIQ-certified imports in the EBN product market in China in 2022, according to the same source. We have developed an advanced and sophisticated product research and development capability, a diversified product portfolio, a robust quality assurance scheme, and an established sales network, which has allowed us to prevail in the market competition.
With the broad and venerable cultural foundations and history of consumptions, China has been the preeminent market and home to the largest consumer base for EBN products. Driven by the raising living standard and the growing health awareness among Chinese consumers, EBN has been perceived as healthy food products with various functional benefits among many Chinese consumers. As an industry leader, we have outperformed industry average, with a revenue growth from RMB1,301.2 million in 2020 to RMB1,729.9 million in 2022, at a CAGR of 15.3%. Our total retail value in the market also increased at a high CAGR of 12.3% from 2020 to 2022, which was 8.6 percentage points higher than the industry average and was the highest among the top five EBN brands during the same years, according to the F&S Report. According to the same source, China’s EBN market, in terms of retail value, is expected to grow from RMB43.0 billion in 2022 to RMB92.1 billion in 2027, at a CAGR of 16.5%. We believe we are well-positioned to capture the substantial market opportunity, leveraging our market share and revenue growth.
Consumer experience is our top priority. We leverage modern technology to continually drive product innovation that elevates consumer experience. Our product portfolio primarily consists of three product categories, i.e., pure EBN products, “EBN+” products and “+EBN” products, to meet the differentiated consumer needs for experience in different life scenarios. In 2022, we had 250 SKUs, among which 194 were pure EBN SKUs under four major product series, including One Nest (碗燕), Freshly Stewed Bird’s Nest (鮮燉燕窩), Crystal Sugar Bird’s Nest (冰糖官燕), and dried EBN (乾燕窩). In addition, leveraging our extensive research of active ingredients extraction from EBN, we have expanded the value chain of the EBN industry by developing other EBN products, including “EBN+” products (which are ready-to-serve EBN products enhanced with other ingredients and/or nutrients), such as One Nest — Vitality (碗燕–元氣款) and Crystal Sugar Bird’s Nest with Ginseng (人參冰糖官燕), and “+EBN” products (which are products that feature EBN as an enhancement for elevated nutrition or other benefits), such as EBN porridge and EBN skincare products.
We have developed a geographically diverse brick-and-mortar sales network, consisting of both self-operated stores and distributor-operated stores. As of May 31, 2023, we had a nationwide offline sales network consisting of 91 self-operated stores and 214 offline distributors covering 614 distributor- operated stores in China. The number of our offline distributors increased from 136 as of January 1, 2020 to 214 as of May 31, 2023. Among the 136 distributors as of January 1, 2020, 111, or 81.6%, of them had remained with us as of May 31, 2023. To capture the rapid growth of e-commerce in recent years, we have also expanded our online presence on major e-commerce or social media platforms, such as Tmall, JD.com, Douyin and Xiaohongshu. In addition, we have launched products specifically designed for online channels, such as Freshly Stewed Bird’s Nest, which has quickly gained popularity among younger consumers.
We stay close to our customers. Through the Yan Palace (燕之屋) membership mini program, our Golden Yan Club (金燕薈) membership program, and other membership programs on major e-commerce platforms, we have cultivated a loyal membership network of customers with a tiered membership system to drive customer stickiness and repeated purchase. As of the Latest Practicable Date, we had over 1.8 million customers registered in our membership programs. Through this membership network, we organize various interactive events to maintain direct engagement with our customers. We have gained considerable insight from our interaction with customers, which allows us to continually optimize our product offerings and customer services. In 2020, 2021 and 2022, we had approximately 143,700, 168,200 and 204,800 paying customers registered in our membership programs, respectively, accounting for 25.0%, 22.1% and 23.5% of our total registered customers as of December 31, 2020, 2021 and 2022, respectively. In the five months ended May 31, 2023, we had approximately 117,600 paying customers registered in our membership programs, accounting for 7.2% of our total registered customers as of May 31, 2023. In 2020, 2021, 2022 and the five months ended May 31, 2023, purchases from such paying customers registered in our membership programs was RMB616.0 million, RMB806.6 million, RMB1,057.0 million and RMB499.7 million, respectively, representing an average purchase amount per registered paying customer of approximately RMB4,280, RMB4,790, RMB5,150 and RMB4,240, respectively.
Our philosophy and primary focus are bringing people beauty and wellness, quality and heritage of EBN products. We collaborate with upstream suppliers to ensure strict control over raw material procurement, implement stringent supplier selection process, and source natural, high-quality and cruelty-free EBN from Southeast Asia. We relentlessly bring EBN to consumers in their natural and pure form.
We achieved robust growth and profitability during the Track Record Period. Our revenue increased from RMB1,301.2 million in 2020 to RMB1,729.9 million in 2022, at a CAGR of 15.3%, and increased by 12.3% from RMB696.9 million in the five months ended May 31, 2022 to RMB782.6 million in the five months ended May 31, 2023. Our net profit increased from RMB123.4 million in 2020 to RMB205.9 million in 2022, at a CAGR of 29.2%, and increased by 20.0% from RMB83.8 million in the five months ended May 31, 2022 to RMB100.5 million in the five months ended May 31, 2023. Our net profit margin was 9.5%, 11.4%, 11.9%, 12.0% and 12.8% for 2020, 2021, 2022 and the five months ended May 31, 2022 and 2023, respectively. Our adjusted net profit (non-IFRS measure) increased from RMB123.9 million in 2020 to RMB211.1 million in 2022, at a CAGR of 30.5%, and increased by 32.4% from RMB85.9 million in the five months ended May 31, 2022 to RMB113.7 million in the five months ended May 31, 2023. According to the F&S Report, our profitability during the Track Record Period was higher than the industry average, which was estimated to be 5.0% to 9.0% during the same periods. See “Financial Information” for more information.
Source: Yan Palace (01497) Prospectus (IPO Date : 2023/11/30) |