BEIJING, March 30 (TMTPOST) — Chinese fruit tea chain Nayuki posted 4.296 billion yuan in revenues and 145 million yuan in net loss in its 2021 earnings report released on Tuesday.

The 2021 revenues represented a year-on-year increase of 40.5%. However, its losing streak had continued through 2021. Nayuki registered net loss of 70 million yuan, 40 million yuan and 203 million yuan in 2018, 2019 and 2020, respectively. The losses in the three years added up to 313 million yuan.

The loss could be largely attributed to the chain’s rapid expansion.

The earnings report shows that as of the end of 2021, Nayuki had 817 outlets in China, all of which were operated directly by the company. In the past year, Nayuki opened 326 new outlets, most of which are located in first-tier cities and second-tier cities in China. Shenzhen, Shanghai, Wuhan and Guangzhou continue to be Nayuki’s most valued markets.

Nayuki said that the rapid expansion was expected to educate the market and build up its brand influence. In the future, Nayuki will be able to break even after it scales up its operation, according to the company.

However, given that most outlets are operated directly by Nayuki, the rapid expansion has also brought down the company’s profitability due to the increasing operation and business cost.

Statistics show that labor cost accounts for 33.2% of the company’s revenues while cost associated with packaging and ingredients accounted for 32.6%.

The rapid expansion also affected Nayuki’s cash flow. The company’s cash flow went down by 11.1% year-on-year in 2021.

Despite current obstacles, Nayuki is confident in its future prospects and hopes to continue to open new outlets in the future.

The company is planning to open 350 more outlets in 2022, according to the earnings report.

In 2021, Nayuki had around 43.4 million registered members, showing year-on-year growth of 55%.