Wen Ruiyan Consumer Group Editor zl
* Blue Chip Corporate Reviews.
Previous"Mass Snack Pattern Mutation, Wanchen Group is Difficult to Occupy the First Place", we are talking about the rise of mass snack mergers and acquisitions, and the old snack giants have also accelerated the layout of the sinking market, and the snack industry can be described as a pot of porridge.
No, on December 6, it was revealed that BESTORE sued Zhao Yiming: deliberately concealing the company's major matters and harming the right of minority shareholders to know, and BESTORE sued Zhao Yiming, a snack upstart, to court. The cause came from the largest merger and acquisition in the snack industry not long ago.
In April this year, BESTORE became a shareholder of Zhao Yiming, and proposed to break up after half a year of honeymoon period.
BESTORE sued Zhao Yiming
In April 2023, Zhao Yiming completed 1In the A round of financing of 500 million yuan, Guangyuan Juyi, a wholly-owned subsidiary of BESTORE, invested 45 million yuan and obtained 3% of Zhao Yiming's equity.
From an external point of view, BESTORE focuses on high-end, Zhao Yiming focuses on parity, and this investment is a perfect complement of BESTORE in the field of snacks, and it is a good move for careful layout.
Unexpectedly, on October 16, in just half a year, BESTORE issued an announcement saying that it planned to take 10.5 billion yuan for the transfer of all the shares of Zhao Yiming Company.
After this buy and sell, BESTORE made a profit of 60 million yuan. Don't underestimate this investment income, you must know that in the first three quarters of this year, the total non-net profit deducted by BESTORE was only 12.2 billion yuan. The money earned from this investment is already equivalent to the income of BESTORE for half a year.
In fact, as the No. 1 enterprise in the leisure snack industry, it is not unusual for BESTORE to invest in a small company. After the equity **, it doesn't have much to do with itself, but this time, things have made new progress.
On November 10, just 22 days after BESTORE transferred its equity, Zhao Yiming suddenly announced a strategic merger with another leading mass snack company, Snack Busy. You must know that the total number of stores of the new company after the merger will reach more than 6,500, and the consolidated sales in 2022 will exceed 7 billion, and the current valuation will be about 9 billion, making it the first in the industry.
The front foot is still rejoicing that BESTORE has made a lot of investment returns, and the back foot is regretting its biggest opportunity to sell snacks in the air. From a close strategic partner to the biggest competitor, BESTORE's investment is not a small price.
I thought it was a peaceful breakup, but things ushered in a big turn.
On November 27, BESTORE formally filed a lawsuit with the people's court because Zhao Yiming, the invested company, deliberately concealed the company's major matters and harmed the minority shareholders' right to know during the cooperation period between the two parties. At present, the court has accepted the case.
BESTORE believes that Zhao Yiming and Snacks are very busy in the early stage of the merger, which needs to go through various processes such as due diligence, negotiation, contract drafting, and investor approval, which cannot be completed in just 22 days. The merger is a major change in the company's business policy, and according to the Company Law, BESTORE, as one of the shareholders, enjoys the legal rights of information, decision-making, inspection, and pre-emptive purchase.
BESTORE said that during the shareholding period, Zhao Yiming never consulted him on the merger, and Zhao Yiming and related parties emphasized from beginning to end that the company planned to be listed independently, and BESTORE took the initiative to sell the equity in line with the original intention of achieving better development of partners. Zhao Yiming's deliberate concealment and guidance directly led BESTORE to sell its equity based on the wrong or false transaction background and pricing basis, which seriously damaged its legitimate rights.
BESTORE has sent a formal letter to Zhao Yiming, requesting relevant documents related to financial and major decision-making during the shareholding period from April 11 to October 16. However, Zhao Yiming has not provided relevant documents so far.
Price reduction = collapse of the house?
At the beginning of Zhao Yiming's shares, BESTORE said that it was "based on its own business development needs". The market also speculated whether BESTORE was not optimistic about the track of mass selling snacks and refused to join the first battle.
Unexpectedly, on November 30, after only selling shares for more than one month, BESTORE officially announced a big price cut.
The price reduction is mainly aimed at offline stores, and the products are focused on snacks with cost optimization but no impact on quality and high repurchase rate. Including macadamia nuts, pine nuts, pistachios, cashews and other nuts, pork jerky, duck neck, grilled sausages and other meat snacks, spicy strips, dried tofu, bread cakes, melon seeds and other categories with a high repurchase rate.
At present, BESTORE has about 1,600 SKUs, and the approximate number of stores is about 600. The average price of more than 300 products reduced by 22%, and the highest price reduction was 45%, which is the first large-scale price reduction in the 17 years since its establishment.
In the past, BESTORE has always positioned high-end snacks, why did the image that it had finally established suddenly "collapsed"?
It turned out that BESTORE was undergoing a major change, and the first step of the change was to start with the change of coach.
On November 27, BESTORE announced that Yang Yinfen was elected as chairman and general manager, responsible for daily business affairs. Yang Yinfen and Yang Hongchun, the former chairman and general manager, are the founding partners of BESTORE, and both of them are also the actual controllers of BESTORE.
Two days after being elected chairman, Yang Yinfen bluntly said in an open letter to all employees, "At present, what is in front of us is not only the problem of living difficult, but the problem of whether we can live." "The company wants to reduce the cost, return to the image of the good store next door, and take the route of good quality and close to the people.
In fact, the crisis of BESTORE is not just now, and the company's performance has stopped in 2020. From 2015 to 2019, BESTORE's operating income increased from 314.9 billion yuan increased to 771.5 billion yuan, with a compound growth rate of 2511%。Non-net profit is deducted from 03.2 billion yuan increased to 27.4 billion yuan, with a compound growth rate of 7106%。
In February 2020, when BESTORE was first listed, it was in the bear market at the beginning of the epidemic, and it still achieved 15 consecutive boards. However, the operating income increased by only 232%, deducting non-net profit increased by only 057%。Subsequently, the non-net profit deducted in 2021 decreased by 2515%, barely maintaining the status quo in 2022, as of the third quarter of 2023, BESTORE's non-net profit fell by 44 again23%, according to the performance level in 2019, has been cut in half, and the net profit margin on sales is only 318%。
Before the price was reduced, there was this kind of profitability, and now if you cut yourself again, will BESTORE save itself with a broken arm or jump into the fire pit again?
Squeeze the ** chain to seek change
It is understood that at present, the price reduction reform started by BESTORE is still in the first stage, starting with the first chain, and with the deepening of the reform in the later stage, the price reduction will continue to more categories.
According to BESTORE, the price reduction space mainly comes from the "squeezing water" of the first chain, but this is not the squeezing of the best businessmen, but through lean management in terms of cost control, production efficiency, business efficiency, etc., so that each participant in the industrial chain can become a participant, contributor and beneficiary of cost reduction and efficiency increase.
Cake and bakery products are to achieve special line production and production line underwriting with ** merchants to improve efficiency and reduce costs. For bakery products with a high degree of automation and difficulty in reducing prices, such as egg skin toast and salted cheese toast, switch to a factory with a higher degree of automation through price comparison and reduce the cost through the improvement of production efficiency.
At the same time, price reduction does not mean quality reduction. The three-chain isomorphic model of "lengthening the industrial chain, completing the first-class chain, and improving the value chain" is the underlying reason why BESTORE realizes price reduction reform and creates product price advantages based on the bottom line of quality.
At present, the gross profit margin of BESTORE has a trend of recovery. From 2018 to 2022, the gross profit margin of BESTORE increased from 3121% down to 2757%, and the gross profit margin in the third quarter of 2023 increased to 2854%。Compared with Laiyifen, which is also a high-end snack (the gross profit margin in the third quarter of 2023 is 42.48%), BESTORE still has a lot of room for improvement.
In response to this price reduction, the capital market finally had a positive response to BESTORE. After the official announcement of the price cut, the stock price recorded two consecutive boards, with a maximum increase of nearly 30% in 3 days.
As for consumers, price reduction is bound to be good news, and we will wait and see whether offline stores can come back to life with this reform.
Produced by Ruilan Financial News.
The article is for informational purposes only The market is risky and investment needs to be cautious.
* Blue Chip Corporate Reviews.