What’s new: Chinese tea chain Nayuki Holdings Ltd. returned to a loss in 2021 despite strong growth in revenue, as it embarked on a rapid store expansion and spent more on raw materials and staff.
Shenzhen-based Nayuki, which sells fresh-fruit teas, cold-brew beverages and baked goods, reported an adjusted net loss of 145.3 million yuan ($22.8 million) in 2021, compared with an adjusted net profit of 16.6 million yuan in 2020, according to its financial report released on Tuesday.
The downturn came as the company’s spending on ingredients and packaging materials rose by 21% year-on-year to 1.4 billion yuan. Meanwhile, labor costs rose 55% year-on-year to 1.4 billion yuan.
Revenue grew 40.5% year-on-year to 4.3 billion yuan, 74.2% and 21.9% of which came from sales of freshly-made tea drinks and baked products, respectively.
As of December 2021, Nayuki ran 817 outlets across China, 326 of which were set up last year, according to the financial report.
The background: The return to loss mainly reflects the impact of China’s omicron outbreaks in the second half of last year and the consequent implementation of Covid-19 control measures which led to a change in consumption habits, Nayuki said.
In June 2021, Nayuki raised $656 million in a Hong Kong IPO, which it said would be used to expand its teahouse network, deepen market penetration and strengthen its supply chain.
Contact reporter Ding Yi (yiding@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
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