Chinese bubble tea chain Nayuki announced on Tuesday that it is expected to earn about 4.28 billion ($672 million) to 4.32 billion yuan in revenue and about 135 million to 165 million yuan in adjusted net losses (non-IFRS measure) in 2021.
The company also stated that store sales have continued to recover throughout the beginning of the year. As the COVID-19 pandemic in Mainland China has eased, Nayuki’s teahouses in Xi’an, Shanxi Province, have now fully resumed business, though the pandemic has had limited impact overall on the company’s business performance. Supreme mulberry and other products launched by the company have been widely popular amongst consumers, creating an uptick in its business performance.
Nayuki, which is listed on the HKEx, focuses on high-end cheese-foam-topped beverages and breads. With young women as its main customers, the majority of Nayuki’s stores are located in first- and second-tier cities across China. Though the company has continued to open new stores since its establishment in May 2014, it is still facing losses in its business.
Nayuki’s prospectus shows that from 2018 to 2020, its income was 910 million yuan, 2.292 billion yuan and 2.871 billion yuan. Meanwhile, net losses were 66 million yuan, 39 million yuan and 202 million yuan in each of those three years, a total of over 300 million yuan.
Nayuki said that the company’s largest losses in the past were mainly due to the heavy initial investment to promote the rapid development of its teahouses. The average investment cost of a teahouse is as high as 1.8 million yuan. In addition to the initial investment, its daily operating costs, materials, staffing and rental expenditures are all high.
In 2021, Nayuki launched 105 new products, an average of one every 3.5 days. Among them, supreme jade yougan and duck feces fragrance tea have become popular. Some industry analysts have pointed out that Nayuki’s fourth quarter launch of Chinese desserts and bottled teas show growth potential alongside its existing products.