Sunjuice Beverage Targets A-Share Listing as Tea and Coffee Chains Drive Supply-Chain Demand

This is an English adaptation of a FoodBud historical article originally published on October 23, 2022.

Sunjuice Holdings was already listed on the Taiwan Stock Exchange. Its mainland operating company, Sunjuice Beverage, had recently disclosed a prospectus for a planned A-share listing.

Sunjuice Beverage provides ingredient supply-chain solutions mainly for new-style tea-drink brands. Its key customers included Mixue Bingcheng, Shuyi Shaoxiancao, Luckin Coffee, Hema Fresh and Guming.

Product Portfolio

The company’s products covered several categories:

• Beverage ingredients, including fruit and vegetable concentrates
• Texture inclusions, including original and pink crystal balls
• Jams, including blueberry jam and orange-grapefruit jam
• Ready-to-drink products, including mango pomelo sago

Revenue Mix

Main business revenue was:

• 2019: RMB 790 million
• 2020: RMB 800 million
• 2021: RMB 1.05 billion
• Q1 2022: RMB 200 million

Beverage products were the largest sales category, accounting for more than 52% of total revenue in both 2021 and Q1 2022.

Sunjuice Beverage sold through both direct sales and distributors. Over the previous three-plus years, the direct-sales share kept rising, reaching 66% of revenue in Q1 2022.

Key Customers

In Q1 2022, the top five customers were Mixue Bingcheng, World Tea Drink, Hema Fresh, Guangzhou Jieming and Guming.

In 2021, the top five customers were Mixue Bingcheng, World Tea Drink, Guming, Guangzhou Jieming and Kunshan Supin. Mixue purchased RMB 165 million, or 15.66% of revenue. World Tea Drink purchased RMB 72.07 million, while Guming purchased RMB 69.87 million.

Luckin Coffee appeared among the top five customers in 2020, with annual purchases of RMB 30.49 million.

Suppliers and Inputs

Core raw materials included fruit juices and fruit products, sugars, auxiliary ingredients and packaging materials.

The top five suppliers accounted for 35% of purchases in Q1 2022 and 30% in 2021. In 2020, Sunjuice Beverage also purchased from Tianye, a company backed by Nayuki. In Sunjuice Beverage’s prospectus, Tianye was listed as a peer competitor.

Profit, Receivables and Settlement

Net profit was:

• 2019: RMB 130 million
• 2020: RMB 180 million
• 2021: RMB 190 million
• Q1 2022: RMB 15.21 million

Accounts receivable stayed broadly between nearly RMB 60 million and RMB 72 million from 2019 through Q1 2022. Prepayments were relatively small. The main customer settlement cycle was 30 to 60 days.

According to the prospectus years disclosed, Mixue ranked first in accounts receivable in 2021 and Q1 2022, accounting for 31.6% of receivables in Q1 2022. Heytea ranked first in 2020, while Luckin Coffee ranked first in 2019.

IPO Plan

For the planned A-share listing, Sunjuice Beverage aimed to raise RMB 450 million, mainly for production-base construction in Tianjin and Zhaoqing and to supplement working capital.

The company planned to issue 41 million shares, representing 10.22% of equity. That implied a target market value of at least RMB 4.4 billion.

At the time, listed tea-drink supply-chain player Jiahe Foods had a market value of RMB 5.28 billion. Tianye, backed by Nayuki and others, was applying to list on the Beijing Stock Exchange and had a market value of only RMB 1 billion. Dexin Food had previously disclosed a prospectus and also planned to list. The tea and coffee sectors had already produced multiple supply-chain companies, with more potential listing candidates likely to follow.

Note: IPO, valuation and forward-looking listing figures are historical, based on the article dated October 23, 2022.