上市捷报丨沙利文助力普洱澜沧古茶股份有限公司成功赴港上市(6911.HK)

Pu'er Lancang Ancient Tea Co., Ltd. (Stock Code:6911.HK) on2023year12month22The company successfully listed on the main board of the Hong Kong capital market. It is a leading enterprise in the field of Chinese Pu-erh tea and one of the few tea companies in China with experience in raw material management, product development, production, end customer reach, and membership services. Frost & SullivanFrost & Sullivan,Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan') provides exclusive industry advisory services for the listing of Pu'er Lancang Ancient Tea Co., Ltd. We hereby extend our warmest congratulations on its successful listing.

Pu'er Lancang Ancient Tea Co., Ltd. (hereinafter referred to as 'Lancang Ancient Tea') was established on2023year12month22Successfully listed on the stock market, with plans to issue2,10010,000 sharesHShares, including public offerings on the Hong Kong market21010,000 shares, international market offering1,890Ten thousand shares, with the final issue price being RMB per share10.7HK$, net proceeds from global offering approximately1.6HK$10 billion.

During the process of listing in Hong Kong this time, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support and highlight the issuer's competitive advantages, assisting the issuer, investment banks and other intermediaries in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business and other important chapters), helping the issuer complete communication with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and providing assistance to the issuer in completing feedback on various industry-related issues from the Hong Kong Stock Exchange, etc.

Investment highlights

The company is a leading Pu'er tea enterprise in China;

The company is one of the well-known Pu'er tea brands in China, having been selected as one of the top ten famous teas in Yunnan Province for four consecutive years, and is widely loved by consumers;

The company is one of the very few tea companies in China that has experience in raw material management, product development, production, end customer reach, and membership services;

The company is a national key leading enterprise in agricultural industrialization recognized by the Ministry of Agriculture and Rural Affairs of the People's Republic of China.

According to a report by Frost & Sullivan:

press2022In terms of the revenue generated from annual Pu'er tea products, the company is the third-largest Pu'er tea company in China;

press2022In terms of annual Pu'er ripe tea product revenue, the company is the second-largest Pu'er tea company in China;

press2022In terms of the annual income from raw Pu'er tea products, the company is the fourth-largest Pu'er tea company in China.

Overview of the Chinese Tea Market

Tea has become a traditional beverage deeply rooted in Chinese culture. Over the past few decades, Chinese people have continuously increased their attention to healthy lifestyles and sustained an increase in per capita disposable income. As a result, the market scale of the Chinese tea market in terms of revenue has2017Renminbi in [year]3,956RMB 100 million increased to2022Renminbi in [year]5,706yuan, with a compound annual growth rate of7.6%Despite the globalCOVID-19 pandemicAffected by the epidemic, expected2027RMB will reach8,054yuan,2022Year-end2027The compound annual growth rate for the year is7.1%.

In terms of revenue, the scale of the Chinese tea market2017Renminbi in [year]2,406RMB billion increased to2022Renminbi in [year]3,318yuan, with a compound annual growth rate of6.6%estimated2027RMB will reach4,412yuan,2022Year-end2027The compound annual growth rate for the year is5.9%.

At the same time, ready-made tea drinks are becoming increasingly popular, offering a variety of flavors for consumers to choose from2016Year-end2021In that year, its market expanded significantly. Specifically, in terms of revenue, the scale of China's ready-to-drink tea market was2017Renminbi in [year]789RMB 100 million increased to2022Renminbi in [year]1,534yuan, with a compound annual growth rate of14.2%estimated2027RMB will reach2,730yuan,2022Year to2027The compound annual growth rate for the year is12.2%.

In terms of revenue, the scale of China's instant tea market is2017Renminbi in [year]761RMB 10 billion, steadily increasing to2022Renminbi in [year]854yuan, with a compound annual growth rate of2.3%estimated2027RMB will reach913yuan,2022Year-end2027The compound annual growth rate for the year is1.3%.

Source: Frost & Sullivan report

Overview of the Chinese Pu-erh Tea Market

According to the national Pu-erh tea standard issued by the Chinese government, Pu-erh tea refers to a variety of tea products made from specific varieties of tea leaves grown only in Yunnan Province and processed through specific techniques in Yunnan Province. According to a Frost & Sullivan report, the Chinese Pu-erh tea market has grown steadily, with the market size measured in terms of revenue being2017Renminbi in [year]115RMB billion increased to2022Renminbi in [year]174yuan, with a compound annual growth rate of8.6%estimated2027RMB will reach244yuan,2022Year-end2027The compound annual growth rate for the year is7.0%.

Based on whether the raw tea has undergone artificial fermentation, Pu-erh tea products can be further subdivided into ripe Pu-erh tea and raw Pu-erh tea. Ripe Pu-erh tea requires complex processing techniques and blending skills, characterized by a smooth taste. The production of raw Pu-erh tea is usually simpler and does not require fermentation, while raw Pu-erh tea often has a lingering astringency. The ripe Pu-erh tea market has always been the main driver of growth in the Pu-erh tea market. According to a Frost & Sullivan report, in terms of revenue, its market size is from2017Renminbi in [year]27RMB 100 million increased to2022Renminbi in [year]47yuan, with a compound annual growth rate of11.7%estimated2027RMB will reach73yuan,2022Year-end2027The compound annual growth rate for the year is9.1%.

Source: Frost & Sullivan report

Chinese Pu-erh tea is mainly sold through offline channels.2022In the year, revenue from offline sales channels accounted for86.2%However, since2020Since [start year], mainly due to changes in consumers' lifestyleCOVID-19 pandemicAffected by the pandemic, many tea companies are actively expanding online channels to sell Pu-erh tea products. According to a Frost & Sullivan report, the revenue from online sales channels in the Chinese Pu-erh tea market has been2017Renminbi in [year]11RMB 100 million increased to2022Renminbi in [year]24yuan, with a compound annual growth rate of17.2%estimated2027RMB will reach45yuan,2022Year to2027The compound annual growth rate for the year is13.1%.

Source: Frost & Sullivan report

The competitive landscape of the Chinese Pu-erh tea market

The Chinese Pu-erh tea market is relatively concentrated.2022more than700Market participants, according to a Frost & Sullivan report, of which, in terms of revenue generated from Pu-erh tea products, the top five Pu-erh tea companies in China collectively22.4%market share.2022The company is the third-largest Pu'er tea company in China, accounting for a market share2.4%.

Source: Frost & Sullivan report

Key market drivers of the Chinese Pu-erh tea market

· Consumers' health awareness has improved.

Pu'er tea products contain a variety of highly effective antioxidants and minerals, and their health benefits are widely accepted by Chinese consumers. Due to the improvement in the economic environment of Chinese consumers, who place greater emphasis on health, the number of tea drinkers has increased, leading to an increase in demand for Pu'er tea products, and this trend is expected to continue.

· Social media promotion of tea culture

Social media has become a powerful medium for promoting the health benefits of Pu-erh tea, helping Pu-erh tea companies expand their consumer base and reach younger generations.

· Preferring to purchase Pu-erh tea products online

E-commerce in China is developed, making it convenient for consumers to purchase Pu'er tea products online. The development of e-commerce has made transactions more convenient, with transparent prices, lower distribution and logistics costs, and easy returns./The refund process, along with various complexities, makes consumers more willing to shop online.

· Technological progress has improved product quality

Technological progress has modernized the traditional processing techniques of Pu-erh tea, allowing for strict control over the main processes in the production of raw Pu-erh tea, such as temperature, humidity, and oxygen content. As a result, Pu-erh tea companies are able to produce high-quality Pu-erh tea products with a rich variety of flavors that are consistently well-known. In addition, through standardized production processes, Pu-erh tea companies can also increase the output of their products.

· Solid sales channels

As the division of labor in the Pu-erh tea industry continues to become more refined, sales channels have become one of the core competitive factors. After the popularization of online shopping, Pu-erh tea companies not only accelerated the expansion of traditional offline sales channels but also steadily broadened their online sales channels, establishing a comprehensive online and offline sales network.

· favorable policies

The Chinese government attaches great importance to the development of the Pu'er tea industry, continuously promulgating favorable policies to promote the overall development of the tea industry.2020Since [start year], the Chinese government has introduced a series of policies such as the Western Development Strategy and the conversion of farmland to forests to support tea companies in purchasing raw materials, production, and sales. In addition, the General Administration of Quality Supervision, Inspection and Quarantine of China2008In the same year, Pu-erh tea was recognized as a protected product with regional indications, and the national standard for Pu-erh tea was promulgated.

View the full prospectus

Frost & Sullivan has extensive research experience in the catering and food industries, assisting well-known companies in successfully listing on capital markets. Recent successful listings include: Dekang Agriculture and Animal Husbandry (2419.HK), pot ring （ 2517.HK), Davis Commodities（ NASDAQ:DTCK), Zhenjiao Lidu 6979.HK), Dazhi Shares 1405.HK), Bai Guoyuan2411.HK), and proper taste2147.HK), Weilong9985.HK), Shuangcai Zhuang2321.HK), Youran Animal Husbandry9858.HK), Jiǔjiǔ Wáng1927.HK), Yum China9987.HK), Nongfu Spring9633.HK), Fengxiang Food9977.HK), Simore6969.HK), China Feihai6186.HK), China Tobacco International6055.HK), Premium360（2360.HK), Wugu Millhouse1837.HK), Baby Tree1761.HK), Haidilao6862.HK), sustainable agriculture8609.HK), Longhui Holdings1007.HK), Xinhong International1587.HK), Yiyuan Liquor Industry8146.HK), Jierong International2119.HK), Bingshi International1705.HK), Nissin Foods1475.HK), Asian groceries8413.HK), Zhouhei Duck1458.HK), COFCO Meatgrain1610.HK), Yihai International1579.HK), Zhongdi Dairy (1492.HK), Dali Foods3799.HK), Manor Ranch1533.HK), Wanzhou International0288.HK) etc.