The Zhitong Finance App learned that on January 1, 2025, Michelle Ice City Co., Ltd. (hereinafter referred to as “Michelle Ice City”) updated its Hong Kong stock listing prospectus, and the listing process went one step further.

Michelle Ice City has always adhered to the value proposition of “high quality and affordability” and is committed to achieving the corporate mission of “making the brand stronger, making partners richer, and allowing everyone in the world to enjoy high-quality and affordable deliciousness”. It owns the ready-made tea brand “Michelle Ice City” and the freshly ground coffee brand “Lucky Coffee”.

According to the prospectus, as the world's largest ready-to-drink company, Michelle Ice City has not only maintained steady financial performance, but also strengthened its core strengths in the supply chain and brand.

Both revenue and profit have maintained double-digit growth, making it the world's largest ready-to-drink company

In 2024, Michelle Ice City will continue to maintain a remarkable growth trend in terms of operating income and net profit.

Data show that from January to September 2024, Michelle Ice City achieved terminal retail sales of 44.9 billion yuan, a year-on-year increase of 21.4%; production volume of 7.1 billion cups, up 22.5% year on year; operating income of 18.7 billion yuan, up 21.2% year on year; and net profit of 3.5 billion yuan, up 42.3% year on year.

At the same time, under a series of cost reduction and efficiency measures, the profitability of Michelle Ice City has also increased significantly. According to the prospectus, from January to September 2024, the Group's gross margin was 32.4%, up 2.7 percentage points from the same period last year; the net interest rate was 18.7%, up 2.8 percentage points from the same period last year.

At the same time, Michelle Ice City continues to strengthen store construction, and its market position is far ahead. According to the prospectus, in the first nine months of 2024, the number of global stores in Michelle Ice City exceeded 45,000, an increase of 25.3% over the previous year, and 9,000 new stores were added in the past year. As far as the number of stores is concerned, Michelle Ice City has surpassed Starbucks to become the world's largest ready-to-drink company.

The performance of new stores is as good as that of old stores, and continues to explore the township market space

According to the prospectus, in the first nine months of 2024, the average daily volume of all Michelle Ice City stores produced about 662 cups, an increase of about 4%; the average daily store turnover was 4,184 yuan, and the average monthly store turnover was nearly 0.13 million yuan. Michelle Ice City attaches great importance to store management capabilities and hopes to build “more profitable” stores to share the interests of new and old franchisees.

Specifically, for old stores that opened before 2021, the average daily store turnover increased by 4.1% between 2021 and 2023, and continued to grow in the first nine months of 2024; the average daily turnover of old stores that opened in 2022 and 2023 also continued to grow.

However, judging from the average turnover of Japanese stores from January to September 2024, the performance of new stores opened in 2024 has already surpassed that of stores opened in 2022 and 2023. Although the opening time is relatively short, the development vitality of new stores should not be underestimated.

As a “consumer treasure” that needs to be further explored, China's vast sinking market provides an extremely promising future development space for Michelle Ice City. Up to now, Michelle Ice City has entered 4,900 townships, 1,700 counties, and more than 300 prefecture-level cities across the country. The number of stores in mainland China has reached 40,510, of which 23,162 are located in third-tier cities and below, accounting for 57.2%. However, there are 1,800 counties and 30,000 townships across the country. For Xuewang, which has a huge number of stores, 84% of the townships have not entered.

Establish the largest supply chain system in the industry, and the super IP “Snow King” deepens emotional links

In order to guarantee the stable supply of the nationwide to global store network, Michelle Ice City has built the largest complete end-to-end supply chain system in the Chinese beverage industry, covering core components such as procurement, production, logistics, R&D and quality control, and has become the cornerstone of the “high quality and affordable” value proposition.

In the procurement process, Michelle Ice City integrates high-quality resources through a procurement network covering six continents and 38 countries. The huge procurement scale also enables Michelle Ice City to purchase many core raw materials at prices below the industry average, improving cost performance and attracting more consumers and franchisees. For example, for milk powder and lemons of the same type and quality, the procurement costs of Michelle Ice City in 2023 are about 10% and 20% lower than the average in the same industry, respectively.

In the production process, Michelle Ice City has five major production bases with an annual comprehensive production capacity of about 1.65 million tons. Through self-research and self-production systems, it provides one-stop solutions for all categories of beverages, including sugar, milk, tea, coffee, fruit, grain, and ingredients. According to Insight Consulting's report, as of September 30, 2024, Michelle Ice City has become the most comprehensive and large-scale enterprise in China's ready-made beverage supply chain. Furthermore, according to media reports, on December 18, Michelle Ice City Group signed a strategic cooperation with Junlebao Dairy Group. The two sides jointly built the Junlebao x Snow Ice City “Xuewang Ranch” in Xinxiang, Henan. The farm is expected to produce 0.042 million tons of milk per year. At this point, the supply chain layout of Michelle Ice City is one more city.

In terms of logistics, the total storage system area of Michelle Ice City is about 0.35 million square meters. The distribution network covers 31 provinces, autonomous regions and municipalities directly under the Central Government in mainland China, more than 300 prefecture-level cities, 1,700 counties and 4,900 townships. Its coverage breadth and depth of decline are the highest in the industry. As of September 30, 2024, in mainland China, Michelle Ice City had reached more than 90% of counties within 12 hours, and about 97% of stores had cold chain logistics coverage.

In the R&D process, Michelle Ice City has overall R&D capabilities, including application research and development of product flavors and recipes, as well as basic research and development related to food-related technology, production processes, recipes and equipment. It has now created a variety of “star products” in the industry. From January to September 2024, sales volume of chilled lemonade was about 1.1 billion cups, and sales volume of ice cream products was about 1.4 billion.

According to Insight Consulting's report, in 2023, for every 10 cups of freshly made lemonade sold in China, more than 8 cups came from “Michelle Ice City”; for every 10 cups of ready-made ice cream sold in China, more than 3 were from “Michelle Ice City”; and for every 10 cups of pearl milk tea sold in China, more than 3 cups were from “Michelle Ice City”. According to beverage sales in 2023, “Michelle Ice City”'s chilled lemonade, fresh ice cream, and bubble milk tea are the top three best-selling items in the Chinese beverage industry.

Furthermore, in terms of brand building, Michelle Ice City launched the cartoon character “Snow King” in 2018 and launched a series of high-quality audiovisual content around “Snow King”, such as theme songs, skits, cartoons, etc., to cultivate a highly engaged and interactive consumer and fan base. “Snow King” has become a unique cultural symbol of the Internet. According to the prospectus, topics related to the theme songs of “Snow King” and “You Love Me, I Love You, Ice City Sweet Honey” have had cumulative impressions of over 19.1 billion times and 9.5 billion times, respectively, and the animation “Snow King Has Arrived” has been viewed more than 0.21 billion times.

Adhere to the concept of sustainable development and continue to practice social responsibility

Since its establishment, Michelle Ice City has been adhering to the core values of “real products, no shortcuts, no deception”, and the corporate vision is “simple, focused, and a respected century-old brand”. Driven by positive values, Michelle Bingcheng actively assumes corporate responsibility and continues to give back to society in areas such as industrial assistance to farmers, entrepreneurship and employment.

In 2023, Michelle Ice City will create or support about 785,000 jobs in China, from procurement of agricultural products upstream in the industrial chain to production and logistics, to terminal franchise stores. As of December 27, 2024, approximately 37% of Michelle Ice City franchisees and 68% of franchisee store employees were women.

In terms of rural revitalization, Michelle Ice City is committed to improving farmers' welfare and helping them improve their scientific planting ability. In 2023, the procurement of agricultural products from Michelle Ice City boosted production and income for about 167,000 farmers across the country. In addition, Michelle Ice City also provides farmers with training, support, and necessary agricultural materials in agricultural practices.

In April 2024, Snow Ice City established the Snow King Charity Foundation, which is dedicated to education support, rural revitalization, community environmental protection practices, sustainable development and natural disaster relief. Since its inception, the Foundation has carried out a range of charitable activities. In September 2024, the Foundation donated RMB 10 million to the Education Development Foundation of Ding'an County in Hainan Province to support teaching and student aid.

Actively expand overseas markets and build a global century-old brand

Since 2018, Michelle Ice City has actively expanded overseas markets. With its rich domestic experience and know-how, as well as a series of innovative measures adapted to local conditions, it has achieved rapid development in overseas markets.

As of September 30, 2024, the number of Michelle Ice City stores outside of mainland China is about 4,800, and it has entered 11 countries mainly distributed along the “Belt and Road”, including Indonesia, Vietnam, Malaysia, and Thailand.

In terms of terminal retail sales, the size of the ready-to-drink market in Southeast Asia will grow from 20.1 billion US dollars in 2023 to 49.5 billion US dollars in 2028, with a compound annual growth rate of 19.8%. At the same time, it also brings broad room for growth in the global development of Snow Ice City.

As of December 31, 2023, Michelle Ice City has become the largest ready-to-drink tea brand in Southeast Asia, with more than 4,000 stores. As of December 27, 2024, the cumulative number of impressions on TikTok about the topic of “Michelle Ice City Indonesia” was about 2.5 billion.

With a strong supply chain system, brand influence and market expansion capabilities, Michelle Ice City will continue to achieve large-scale and sustainable growth, bringing more high-quality and affordable ready-made drinks to global consumers, while also creating greater value for society and industry.