Anxin International believes that China's unmanned retail industry is in the early stages of development, and there is plenty of room for future development.
The Zhitong Finance App learned that Anxin International released a research report stating that the first “buy” rating was given to Youbao Online (02429). It is expected that in 24 years, the company will expand rapidly and develop rapidly to achieve break-even through the franchise model, with a target price of HK$25.5. The bank believes that China's unmanned retail industry is in the early stages of development, and there is plenty of room for future development of the industry. As the largest unmanned retail operator in China, Youbao Online has large scale advantages and technical advantages. The company will achieve rapid expansion through the franchise model in '24, which is a critical year for scale expansion and profit improvement.
Anxin International's main views are as follows:
The adjusted net loss in 2023 was $220 million, and the loss margin narrowed 22% year over year.
In 2023, Youbao Online's revenue was 2.67 billion yuan, up 6% year on year, and net loss was 330 million yuan. Excluding listing expenses and share-based remuneration expenses, the adjusted net loss was 220 million yuan, and the loss margin narrowed 22% year on year. In recent years, the epidemic has seriously affected the development of China's unmanned vending machine industry. 23 was the first year since the epidemic was liberalized, and Youbao Online's various businesses showed a weak recovery trend. It is expected that in '24, Youbao Online will rapidly expand and develop rapidly through the franchise model to achieve break-even.
Youbao Online has been committed to the unmanned retail market in China for more than ten years. It has grown into an industry leader, and has an obvious scale advantage.
The company was founded in 2011. Its mission is to make unmanned retail within reach. Through more than ten years of development, it has established strong digital and supply chain capabilities. The company has completed the layout of about 160 cities and 28 provincial administrative districts, operated about 60,000 smart retail terminals such as smart containers, smart vending machines, smart coffee machines, mini KTVs, etc., and established an extensive network of sales points for core consumption scenarios such as schools, factories, offices, public places, and transportation hubs. According to Frost & Sullivan's statistics, there are currently tens of thousands of market participants in the market, and the pattern is relatively scattered. Based on product sales in '22, Youbao Online's market share is 7.6%, making it the largest operator in the unmanned retail industry in China.
The industry penetration rate is low, and there is plenty of room for development.
According to Frost & Sullivan's forecast, as disposable income, consumption levels, and urbanization rates increase, social distance awareness increases, and vending machines continue to innovate, the offline vending machine penetration rate is expected to increase from 8.8% in 2022 to 15.6% in 2027. The retail vending machine market size in China is expected to grow from 28.9 billion yuan in 2022 to 73.9 billion yuan in 2027, with a 5-year CAGR of 20.7%. The number of vending machines in China is expected to grow from 1,116 million in 2022 to 2,535 million in 2027, with a 5-year CAGR of 17.8%.
Risk warning: risks associated with the shift from direct management to a partnership model; increased industry competition; system failure or failure.