Independent scarcity penetrates
Left-hand buyback, right-hand loan
Author: Wang Yiran.
Editor: Li Huan.
Style: Junyi.
*: Rhodium Finance - Rhodium Finance Research Institute.
If I don't achieve 30 billion annual revenue and a market value of 100 billion, I won't consider retirement! When he returned to Beingmate in 2018, Xie Hong said.
The rhetoric is still in my ears, but the reality is cruel. On January 16, 2024, Beingmate announced that it intends to use the assets of the company and its subsidiaries to mortgage loans from banks for daily production and operation, as well as to apply for loans from banks and issue acceptance bills. At the same time, it is proposed to take 1$500 million to $300 million self-owned or self-raised buyback**.
The left hand borrows money as collateral and the right hand buys back**, which inevitably makes the outside world examine Beinmei's sense of contradiction and struggle, and whether there is the possibility of borrowing money to repurchase? Recalling the old days of "the first share of domestic milk powder", how far is Xie Hong from retirement?
How "tight" the money is
laocai
According to the announcement, the assets that Beingmate intends to apply for a mortgage loan from the bank have a book value of 10$2.5 billion (unaudited), accounting for 2643%。
According to the production and operation needs in 2024, it is planned to apply for loans from banks and issue bank acceptance bills, etc., with a total of no more than 28A comprehensive credit line of 300 million yuan.
It is worth mentioning that this batch of assets has been repeatedly mortgaged 5 times since 2020, the difference is that the book value is different, which shows the degree of the company's demand for funds.
According to Choice data, in the first three quarters of 2020-2023, the asset-liability ratio of Beingmate is as follows. 54%。The overall decline is gratifying, but the short-term debt repayment pressure is still not small. Taking the first three quarters of 2023 as an example, the cash and cash equivalents on the books of enterprises were 748.4 billion yuan, and short-term borrowings amounted to 886.5 billion yuan, total interest-bearing liabilities 9283.6 billion yuan, the quick ratio is less than 1 and only 076。
Objectively speaking, Xie Hong has made a lot of efforts to improve his financial situation. For example, Beingmate Group signed a contract with AVIC Trust to raise funds from the Hangzhou Binjiang Branch of the Agricultural Bank of China and Hangzhou High-tech Technology Innovation Company, and introduced Great Wall Guorong as the three shareholders.
Unfortunately, according to the "Progress Announcement on the Litigation of the Controlling Shareholder and the Actual Controller" dated January 23, 2024, when Beingmate Group signed a contract with AVIC Trust in 2018, it was agreed that 48 million shares of Beingmate would be pledged to the latter, and AVIC Trust would lend it 23.3 billion yuan, the group, Xie Hong, and Yuan Fang, the then legal person, provided joint and several liability guarantees.
In April 2020, AVIC Trust transferred the debt to Great Wall Guorong. Because the group, Xie Hong and Yuan Fang failed to perform their obligations as agreed, Great Wall Guorong then applied to the court for compulsory enforcement, and the subject matter of enforcement was 3$1.6 billion and interest on debt as well as $38.8$350,000 execution fee.
The case was officially filed in January 2023. The following month, the Hangzhou Intermediate People's Court froze 48 million unrestricted tradable shares pledged by Beingmate Group to AVIC Trust, and at the same time froze 5 million unrestricted tradable shares pledged by the group to Hangzhou High-tech Branch of CCB.
At that time, the Shenzhen Stock Exchange issued a letter of concern, requiring the company to supplement the disclosure of the freezing and pledge of the shares of the actual controller and its persons acting in concert, and explain whether there was a risk of forced liquidation.
In December 2023, Great Wall Guorong intends to convert the debt to 342 yuan ** transfer, the final 22nd to 23.3 billion yuan**. "If you don't want 100 million interest, you have to cut the meat and run away", which shows the degree of determination.
As of December 2, 2023, Beingmate Group and its persons acting in concert have pledged 19 shares of Beingmate48.5 billion shares, accounting for 99 of the total shares of the company held by it2%, of which 899697.43 million shares have been judicially frozen, accounting for 46 of its total pledged shares17%；The total number of unstaked is only 156850,000 shares, of which 4420,000 shares were frozen by the judiciary, accounting for 2 of its total unpledged shares82%。With such a high proportion of pledges, the potential risk of Xie Hong and Beingmate Group losing control cannot be ignored.
Based on this, although the above-mentioned ** repurchase, although the funds are owned or self-raised by the company, some ** are still suspected of borrowing money to repurchase to consolidate the status of the controlling shareholder and actual controller.
Leave time to answer the question of what is right and which is wrong. To be sure, there is a limit to market patience. As of January 16, 142 have been repurchased680,000 shares, accounting for 01321%, the highest price is 389 yuan shares, with a total turnover of 5516.78 million yuan.
As of January 30, Beingmate closed at 346 yuan shares, a new low for the year, compared with 39 yuan fell by about 10%. The market value is less than 4 billion yuan, down about 26 billion yuan from its peak.
In fact, since 2018, Beingmate has implemented and completed three buybacks, with a cumulative cost of 24.1 billion yuan. Real gold ** shows that the confidence in development is commendable, but from the stock price trend it did not bring much stimulation. I can't help but sigh, what happened to the first share of domestic milk powder? When will the dream of 100 billion yuan come true?
5 years after returning to the "military order" to break its promise
laocai
Performance is a barometer of stock prices. A closer look at the financial report reveals some of the answers.
As one of the few domestic dairy companies that do not involve melamine, Beingmate has enjoyed a wave of dividends after the industry earthquake in 2008 and quickly became the industry leader. According to AC Nielsen survey data, as of December 2009, the market share of Beingmate infant formula was 93%, ranking fourth among the top ten brands of milk powder, and second among domestic brands; From January to October 2010, the market share was 108%, ranking third in the top 10 and first in domestic production.
In 2011, it successfully landed on the Shenzhen Stock Exchange and became a veritable "first stock of domestic milk powder". After that, the founder Xie Hong retired and resigned as chairman and general manager in a chic manner.
Beingmate did not disappoint, with revenue of 47 from 2011 to 20132.7 billion yuan, 535.4 billion yuan, 611.7 billion yuan, corresponding to the growth rate. 24%；Net profit attributable to the parent 43.7 billion yuan, 50.9 billion yuan, 72.1 billion yuan, corresponding to the growth rate. 59% and 4154%。
The secondary market then rose, reaching 27 in 201397 yuan stock high, market value of more than 30 billion yuan.
However, this growth came to an abrupt halt in 2014. Revenue fell 1746% to 504.9 billion yuan, and the net profit attributable to the parent shrank by 9045% to 06.9 billion yuan, even so, it is still the head of infant formula, and Feihe's revenue scale in the same period was 35$8.3 billion.
What I didn't expect was that this year would become a turning point in the differentiation between the two. Since then, Beingmate has been declining, with revenue from 45 in 20153.4 billion yuan shrank to 26 percent in 2017600 million yuan, net profit attributable to the parent from 10.4 billion yuan shrank to -105.7 billion yuan, due to continuous losses in 2016 and 2017, it was once "wearing a hat with stars" and became *ST Beinmei.
On the other hand, Feihe's revenue increased from 36 in 2015$1.5 billion increased to 58 in 20178.7 billion yuan, net profit attributable to the parent increased from 411.9 billion yuan increased to 11600 million yuan (choice data).
Naturally, this brought a strong sense of crisis to Xie Hong, and in March 2018, with the sentence "starting from scratch at the age of 53", Xie Hong, who had left the company for 7 years, returned to the front line, and said "If I don't achieve 30 billion annual revenue and a market value of 100 billion, I won't consider retirement!" I am confident that at the time of the 30th anniversary, that is, in 2022, Beingmate will return to the top and continue to surpass itself. ”
When the military order was issued, a drastic reform began. Although the year's revenue was still down 638% to 249.1 billion yuan, but the net profit attributable to the parent company turned around, a year-on-year increase of 10389% to 41.11 million yuan (choice data).
Just a closer look, there is a question mark over how much the core profitability has improved. Since the second half of 2017, Beingmate has started to ** real estate, and by the end of 2018, 12 sets have been sold, with a total price of 44.71 million yuan and a recognized income of 2629460,000 yuan. At the same time, it will also be a wholly-owned subsidiary with 1$6.6 billion transferred.
The problem is that selling capital can only bring short-term prosperityFrom 2019 to 2022, the company's revenue will be 278.5 billion yuan, 266.5 billion yuan, 234.5 billion yuan, 250.9 billion yuan, corresponding to a growth rate of 1183%、-4.32%、-11.99% and 698%；Net profit attributable to the parent company - 103.1 billion yuan, -324.3 billion yuan, 73.31 million yuan and -17.6 billion yuan, corresponding to the growth rate. 61% and -34006%, a loss of 5 in four years300 million yuan (choice data).
Standing at the "Military Order" node in 2022, not only did he fail to return to the top, but the scale of revenue has shrunk, and the net profit has lost three times in four years.
On the other hand, Feihe has already stepped into the 10 billion camp, with a revenue of 213 in 2022100 million yuan, net profit attributable to the parent company of 494.2 billion yuan.
Fortunately, entering 2023, profitability has improved gratifyingly. The net profit attributable to the parent company in the first three quarters was 49.36 million yuan, a year-on-year increase of 1156%, but revenue is only 191.6 billion yuan, down 5 percent year-on-year56%。Increasing profits without increasing income inevitably makes people mutter, what is the quality of earnings and how long is it sustainable?
What did you pay for?
laocai
Freezing three feet is not a day cold. Looking back at the highs and lows of the enterprise, some mispayments and misjudgments have to be said.
According to Jiemian News, in order to sprint to the market, Beingmate opened a large number of county-level dealers, expanding from two or three hundred to thousands, and the pressure on dealers and channel inventory was high. Although the fat and prosperous have won the performance evaluation for a while, it has buried hidden dangers for the subsequent healthy development.
In 2015, the company began to clean up redundant dealers, eliminating more than 500 that year, and the reduction ratio reached half.
However, due to the requirement for large dealers to radiate a region, beyond the strength level of some dealers, the inventory backlog has led to a first-class war, which eventually leads to high accounts receivable and can only be cleared out of losses. From 2015 to 2017, the accounts receivable were 136.3 billion yuan, 116.6 billion yuan, 807.9 billion yuan, corresponding to a growth rate of 22066%、-14.41%、-30.73%；Operating cash flow was 29.08 million yuan, -423.3 billion yuan, -13.8 billion yuan, corresponding to the growth rate. 4%。(choice data).
On the other hand, the company introduced Fonterra to become the second largest shareholder. It's just that the international giants have not been able to save the company, and the loss climbed to 1 billion in 2017, and Fonterra began to lose patience and gradually withdrew.
At the time of the pull between the two sides, the two-child policy was fully implemented, and a number of dairy companies such as Feihe, Junlebao, Ausnutria, and H&H took advantage of the situation and became the head camp of infant formula.
After Xie Hong's return in 2018, the first fire burned on the channel, according to Yicai, at that time, it appointed two new general managers, namely Bao Xiufei with Wyeth, FrieslandCampina and other resume experience, and Zhang Ying, who has Wyeth's general manager experience in the northern region, both of which have experience in market sales, and at the same time guide enterprises to vigorously embrace new retail.
In terms of products, at the end of 2020, Wu Songhang, who had led ternary milk powder to achieve a breakthrough of 100 million to 1 billion yuan, was introduced as the executive director and general manager of Beingmate (Tianjin) Technology, and the Tianjin factory is the core business of Beingmate's high-end products, which once triggered the reverie of high-end upgrades in the outside world.
In terms of funding, it cooperates with the aforementioned AVIC Trust, Hangzhou Binjiang Branch of Agricultural Bank of China and Hangzhou High-tech Science and Technology Innovation Company. The three-pronged approach will jointly help Xie Hong return to his dream of returning to the top.
From 2018 to 2022, Beingmate invested 99.5 billion yuan, 110.3 billion yuan, 108.9 billion yuan and 74.5 billion yuan, 82.1 billion yuan, accounting for the current revenue. 77% and 3273% (choice data).
Enough hard work and hard work, but in the end it was not able to turn the tide. According to a report by the Beijing News in 2020, the company's new retail project "Mama Buy" was exposed to be suspected of pyramid schemes, Bao Xiufei and Wu Songhang resigned successively, and there was also pressure on the capital chain such as mortgage and execution.
From 2018 to 2022, the gross profit margin of Beingmate. 88%；Net profit margin. 46%、-6.56%。
In the first half of 2023, the company's milk powder revenue will be 118.1 billion yuan, a year-on-year decrease of 08%, accounting for 88 percent of total revenue03%, rice noodle income 1826760,000 yuan, with a proportion of 136%, other income 14.2 billion yuan, accounting for 1061%。
Total revenue for the period increased by 184%, and the net profit attributable to the parent increased by 304% to 44.22 million yuan, net profit margin increased by 0.48 percentage points to 381% (choice data).
However, the gross profit margin decreased by 1 year-on-year68 percentage points to 4491%。In the same period, sales expenses decreased by 199% to 407.6 billion yuan, and the management fee decreased by 54% to 80.16 million yuan, and R&D expenses decreased by 3485% to 6.97 million yuan, and financial expenses decreased by 5673% to $10.92 million. I can't help but wonder, how much of the above-mentioned profit growth is "saved"?
Especially compared with sales expenses and R&D expenses, there is a huge difference between the volume of the two, and the decline in the latter is even greater. Win now and in the future?
Looking at the strategic choice, "strong marketing, weak R&D" is a top questioning point. In 2022, for example, the selling expenses are 8200 million yuan, a year-on-year increase of 1019%, R&D expenses are about 02.2 billion yuan, a year-on-year decrease of 1838%。Which is more important?
Wang Tingyan, an industry analyst, said that high sales expenses not only lower profits, but also lead to insufficient innovation ability and lack of stamina. In the context of the declining birth rate, from incremental development to stock competition, industry competition has intensified, and if Beingmate wants to break the decline and return to the top, it must be out of the circle with characteristics, conform to the general trend of quality, refinement, and scientific feeding, and high-quality R&D and innovation is the top priority.
Direction is far more important than effort
laocai
Objectively speaking, beinmei's recovery report card is not gratifying, due to its own reasons and the background of the times.
In the face of the decline in the birth rate and the decline in the demographic dividend, the "entire maternal and infant industry" is not very good. Gao Hongbin, honorary president of the China Dairy Association, once said that the current domestic dairy industry is ushering in an era of pattern reshaping and survival of the fittest, and the number of domestic dairy enterprises above designated size has decreased from 815 to 587, and the concentration will further increase in the future. In 2022, the top five brands in infant formula sales are Feihe, Yili, Nestle, Danone, and Junlebao, accounting for respectively. 3% and 64%。
The stock market means that the competition will become more and more fierce, and the Matthew effect will continue to be prominent. In order to find new increments, dairy companies are full of energy. For example, with the implementation of the new national standard, we will quickly launch new products and continue to increase the high-end market; Another example is the incubation of subdivisions such as goat milk powder, organic milk powder, and special formula milk powder, and the battlefield is extended to the whole life cycle of children's milk powder and elderly milk powder.
Happily, this tide beinmei has not missed, and some deep cultivation actions have reaped results.
In terms of products, taking the first half of 2023 as an example, we have created a series of probiotics and lactoferrin nutritional milk powder for ** customers. Through product iteration, we provide more consumers with high-quality choices with the high standards of infant formula.
In a record of investor relations activities in 2023, Beingmate revealed that "the company will continue to strengthen basic nutrition research and application technology, promote and complete the 'new national standard formula registration of infant formula milk powder' and product industrialization, and continue to develop products that meet market demand according to the company's strategy and market demand, including but not limited to maternal and infant milk powder, children's supplementary snacks, ** nutritional products, etc., actively build a maternal and infant ecosystem, and enter the field of family nutrition." ”
In terms of sales, Beingmate said that it has achieved global omni-channel marketing such as offline and online, the company's own online**, and new retail direct supply channels that integrate online and offline. The market coverage of the company's main business continued to increase steadily.
Taking the first half of 2023 as an example, the revenue of direct supply to customers will be 21.5 billion yuan, a year-on-year increase of 2028%；E-commerce revenue24.3 billion yuan, a year-on-year increase of 1887%, and the two have contributed 3596% of the main business income has become a new growth point.
Obviously, despite all kinds of pain points and difficulties, Beingmate has been moving forward with a heavy load, continuing to evolve, not admitting defeat and not giving up, this kind of perseverance and resilience is commendable, and it is also the fundamental reason why it has fought all the way through the wind and rain, and has been standing calmly for several ups and downs.
Any business and industry has cycles. There are two main ways to break the changes and cycle crossing, one is to "open the world", disruptive technologies and new products from scratch, giving birth to new markets and new needs; The other is "stock substitution", which uses iterative new technologies and new products to directly seize the existing market and then counterattack and transform.
No matter which one it is, it will test the company's R&D ability and innovation consciousnessFrom 2018 to the first three quarters of 2023, the cumulative R&D expenses of Beingmate are only 1047.7 billion yuan (calculated according to choice), which is less than a fraction of the annual sales expenses.
It is said that no accumulation of steps can lead to thousands of miles, but in difficult moments, direction is far more important than hard work. Time enters 2024, what changes will beinmei have, and can a generation of bigwigs Xie Hong retire earlier?
A new period of nearly 6 years is too early, seize the day!