Last week, in Tokyo
the Olympics
In the women's soccer Asian qualifying play-offs, China
women's soccer
Home and South Korea
women's soccer
The match was a fierce one. Despite starting the game 0-2 down, China
women's soccer
With a stunning comeback to draw 2-2 and eliminate South Korea 4-3 on aggregate, the team staged a stunning comeback to advance to the main round of the Olympics!
It's not just China that's impressive
women's soccer
of reversal, Ruixing Coffee has undergone a similar transformation. Yes, it's the same Ruixing Coffee that blew up in a financial fraud scandal last year.
Who would have thought that since 2021, in the expectation of many old users "grabbing coupons to drink coffee", Ruixing coffee against the odds, once again become the favorite of capital and the market.
Ruixing first announced that it had reached a restructuring support agreement with its major creditors, which triggered widespread media attention; then on April 15, it announced that it had reached a new round of financing agreement of 250 million U.S. dollars with its shareholders, Daegan Capital and Pleasure Capital, which shook the industry; and on April 18, it once again staged a hat-trick of investments totaling 210 million U.S. dollars, and built the country's first fully automated and intelligent bakery base in Fujian.
Recently, Ruixing Coffee has also completed the procurement of 1,000 tons of Yunnan boutique coffee beans with its partners for the new 2020/2021 season, accelerating the promotion of the boutique coffee strategy.
Ruixing's wind review also ushered in a big reversal. Last year at this time, searching for Ruixing microblogging, the screen is full of "cut leeks", "liar" and other negative comments, but now, all parties have to use the "God reversal", "Against the trend of financing" and other terms to express the amazement of Ruixing, and even some media to capital again trust Ruixing as the title of the report Ruixing.
What are the reasons for Rejuvenate Coffee's successful comeback? It's an interesting topic, and we're going to explore it today.
When Rexall's fundamentals are stable, capital and markets are stable
Many friends have been discussing the reasons for Ruixing's resurgence. In my opinion, the key lies in the fact that "when the fundamentals of the form and product are stabilized, the capital and the market are stabilized, and Ruixing has re-entered the track of benign development."
Some people think that my opinion is based on hindsight and that this analysis doesn't make much sense. In fact, this is not the case. As early as the end of last year, when Ruixing Coffee paid $180 million to settle the SEC, I was interviewed by a number of media outlets, analyzing the fundamentals and expressing the reasons why capital and the industry were bullish on Ruixing. Now it seems that the development of Ruixing is basically consistent with my prediction.
Now, I am posting the original Xiaoxiang Morning Post report at the time.
Internet analyst Ding Daoshi said, "The penalty of $180 million is not a huge amount of money for a public company, and Ruixing should be able to afford it relatively well."
Internet analyst Ding Daoshi told the Xiaoxiang Morning Post that the settlement was reached, and Ruixing Coffee's business can be carried out normally. "In fact, Ruixing Coffee has had big financial problems over the past year, but the impact of its affairs will not be great. The Ruixing Coffee on the city streets are now operating normally, and the service has not been discounted." Ding Daoshi said that a company's financial problems and product service problems should be viewed and dealt with separately. It can be seen that the United States also believes that Ruixing's problems are only financial problems, and there are no other problems that seriously hurt customers. This shows that the market is still more recognized Ruixing coffee brand form and later stability.
During the Spring Festival this year, Guo Zhanyi, head of Ruixing, released an internal letter, mentioning that Ruixing will further build a perfect operation model around products, stores and users. From the internal letter, it can be seen that Ruixing further strengthens the value of the user in the operational structure, through product upgrades, technology iteration, private domain marketing form of innovation and other operations, so that every customer can easily enjoy a cup of good coffee that can be drank, and drink value.
In addition, according to the internal letter, in January 2021, the number of new stores opened by Ruixing was more than 120, and during the Spring Festival holiday in 2021, Ruixing Coffee opened about more than 1,900 stores across the country, with the number of cups of ready-to-drink beverages nearly five times that of the same period last year, and the revenue nearly seven times that of the same period last year.
Now, we should realize that the fundamental reason for Ruixing to become the capital's favorite again is also the stability of Ruixing's fundamentals. Many of Ruixing's recent actions lie in the consolidation of fundamentals, for example, at the product level, Ruixing recently completed the purchase of 1,000 tons of Yunnan boutique coffee beans, which mainly come from the two major producing areas of Baoshan and Pu'er in Yunnan, and in order to ensure the quality and flavor, Ruixing has selected coffee beans with SCA scores of 80 or more in the cultivation area at an altitude of more than 1,300 meters above sea level. Last year, Ruixing launched a high-end product line "small black cup - soe Yega Xuefei", as well as out of the circle of the explosive product line "thick milk", is also a fundamental input work.
At the same time, Ruixing has strengthened the construction of diversified consumption scenarios, breaking the constraints of geographic space, and gradually achieving the goal of letting coffee go to people, rather than letting people go to coffee. Recently, Ruixing's first roasting base was officially put into production in Fujian, China, with an annual roasting capacity of 15,000 tons of coffee beans, which also marks the completion of Ruixing Coffee's opening and extension of the whole industrial chain. It is believed that this form of layout of the whole coffee industry chain will also continue to lead the trend of coffee culture in the new period.
Rexall's Reversal Apocalypse: Trials and tribulations are standard for tech companies
The "Ruixing divine turnaround" and "Ruixing Phoenix Nirvana" have been treated as classic cases by the media during this period of time, and are considered to be extremely rare scenes in the history of China's Internet and business history.
In fact, going through trials and tribulations is standard for all leading tech companies. I've been in the business for almost 20 years and I've never seen a tech company that became an industry leader without going through all kinds of trials, struggles, and problems.
Apple and Microsoft in the U.S., China's bat, NetEase, Sohu and so on have all experienced life and death tests, and the situation is even more severe than RuiXing. Tencent has tens of millions of users in QQ, the face of losses, and even plans to sell tencent package were not successful; NetEase listed shares fell for a long time, and even fell to one dollar below the price of cabbage; now the market value of the first Apple, the last century suffered a dark moment, in 1997, relying on Microsoft's 150 million U.S. dollars in loans to the possibility of living ......
Last year, when the financial scandal broke out, I made it clear that the problem with Ruixing was not a matter of strategy and direction, much less a matter of product. Rather, the problem is that Ruixing has taken too many steps and has not carried out its business step by step, which has led to the situation getting out of control.
Today's new Ruixing is far different from what it was in the past, and after experiencing supervision and criticism from all sides, the governance structure is more scientific and reasonable, and the operation mode is more transparent. Refined operation has become the norm, and the marketing level has changed from a large amount of advertising investment to a private marketing approach that pays more attention to user operation, giving users more discounts and at the same time starting to organize users to participate in offline interactive activities with Rexchip Coffee masters to increase the user's sense of identity and satisfaction.
We have reason to expect that after the ordeal and reorganization of Ruixing, will further focus on the fundamentals of the enterprise construction level, and with reference to the recent good news, Ruixing will also be like the above mentioned tech companies that have been suffering, continue to grasp the opportunities brought about by consumer upgrading, and achieve substantial and stable growth.
Where to next for the new Rexall: another U.S. stock, back to Hong Kong?
After the reorganization and this large $250 million financing, Dagon Capital will reportedly become the largest shareholder of Ruixing, with its stake rising to 17.2% and voting rights increasing to 45.2%.
These boring figures mean that Ruixing has entered the development stage of "New Ruixing", whose operation mode and strict attitude towards products have not changed, but the organizational structure and capital structure have undergone a radical change. This way, Ruixing can uphold the advantages and potentials accumulated before, and on the other hand, it can put down some historical baggage and go into battle lightly.
From this, another question arises, that is, after the rebirth of Ruixing, which capital market to embrace next, and thus allow more organizations and individuals to enjoy the dividends brought by the development of the new Ruixing?
Just to be clear at the outset, the current stock and market capitalization of Rexall, as shown by Fidelity Securities, is not a regular value, but is traded as an ADR and listed on the Pink Sheets market. As of this week, the market capitalization of Rexall, which is listed on the Pink Sheets market, is $2.1 billion.
This market value is more than five times more than when Ruixing was at its trough last year, and such an achievement is enough to show that all parties are optimistic about Ruixing. In fact, even though it suffered last year's crisis, Ruixing's operation has been very stable, according to the relevant data provided by Ruixing's temporary liquidator, in the first three quarters of last year, Ruixing Coffee's single-quarter revenues were 565 million, 980 million, and 1.145 billion, respectively, with a year-on-year growth of 18.1%, 49.9%, and 35.8%, and it is expected that the net income of the 2020 fiscal year will be between 3.8 billion and 4.2 billion yuan Between. By the end of 2020, the total number of Ruixing stores will be nearly 4,800 (most of which are self-operated), with a total of 77 new ready-to-drink products for the year, and total ready-to-drink sales of more than 300 million cups.
With the favorable fundamentals at the operational level, Ruixing will have greater autonomy to choose whether to continue to return to the U.S. mainstream market or return to Hong Kong for a secondary listing in the future.