Text|Bohu Finance Lingling.On December 28, 2023, the Hebei Securities Regulatory Bureau** disclosed CICC's "Report on the Initial Public Offering and Listing Guidance of Junlebao Dairy Group Shares", which means that Junlebao has officially started its A-share IPO journey.
It seems that it is one step closer to ringing the bell, but there are many tests left for Junlebao.
01 Looking back on the development of Junlebao in the past ten years, this former leading yogurt enterprise has changed from a regional single-industry dairy enterprise to a national comprehensive dairy enterprise.
In 2014, not satisfied with the layout of yogurt and fresh milk, Junlebao began to try to cut into the milk powder market. Up to now, Junlebao's business has covered infant milk powder, yogurt, low-temperature fresh milk, room temperature liquid milk and dairy cow breeding, animal husbandry, grass industry and other sectors.
In the process of development, there is no shortage of some businesses with outstanding performance. Jane mellow yogurt focuses on zero added sucrose, and has become a well-known brand of low-temperature yogurt in China; The total sales volume of fresh milk exceeds 3600 million bottles, ranking first in China's high-end fresh milk market.
According to official data, in 2009, Junlebao's revenue was 12about 600 million yuan, and this figure increased to about 16.3 billion yuan in 2019, with a compound annual growth rate of 2918％。
Behind this, thanks to the two major production models pioneered by Junlebao.
One is the integration model of the whole industrial chain, which integrates the production and operation of the whole industrial chain of forage planting, dairy farming, production and processing to ensure the safety of products.
The other is the "six world-class" model, that is, with world-class dairy cow breeding, R&D platform, advanced pasture, leading factory, first-class business and food safety management system to ensure the high quality of products.
Since 2021, Junlebao has accelerated the pace of external mergers and acquisitions and further improved the multi-faceted layout of the dairy industry. For example, in 2021, the investment cheese company Skeqi Food Technology (Shanghai)** increased its shareholding in Yinqiao Dairy to 80% in August 2023; In November 2023, it acquired a 30% equity interest in the ready-made yogurt brand Mo Yogurt.
Junlebao, which is growing day by day in the industry, has also ushered in a listing plan and included listing in its development goals. Zhong Yan, vice president of Junlebao, once told ** that by 2025, Junlebao will strive to achieve sales of 50 billion yuan, and strive to become the world's leading brand of infant milk powder, Junlebao yogurt will become the first brand of low-temperature yogurt in China, and Junlebao fresh milk will become the first fresh milk category in China. This specific development vision is also interpreted as Junlebao is preparing for listing.
02 Junlebao, hiding the background color of the development of dairy enterprises, it is not difficult to find that behind the expansion of Junlebao, it is the development logic of the dairy industry, that is, from a regional single-industry dairy enterprise to a comprehensive dairy enterprise, to create a stronger moat, and have more voice in the industry.
For a long time in the past, it was the business model of most dairy companies to deepen the cultivation of a single field. In recent years, with the further maturity of the industry, the competition between dairy enterprises has become more and more intense, and expanding the business scope and realizing transformation have become important topics for many enterprises.
In 2021, Yili Co., Ltd. became the largest shareholder of Ausnutria Dairy. In November 2023, Junlebao strategically invested in Yiran Biotech, a probiotic company, and invested in jasmine yogurt at the same time.
On the one hand, the homogenization problem of dairy enterprises is more obvious, and the stickiness of consumer groups is not high enough, even leading enterprises need to continuously build corporate moats and ensure the barriers of enterprises through a more perfect layout. Therefore, from the development of a single field to becoming a comprehensive dairy enterprise, it will be a major theme of the development of dairy enterprises.
On the other hand, regional small and medium-sized dairy enterprises need the head enterprises to be "backers" and endorse. This point can be glimpsed from Junlebao's own development path. Previously, Junlebao had successively joined Sanlu and Mengniu, which were the leading dairy companies, and received the support of the latter.
After the collapse of cooperation with Sanlu, Junlebao and Mengniu "married". In 2010, Mengniu won with 4At a consideration of 6.9 billion yuan, it acquired 51% of the shares of Junlebao and became the largest shareholder of Junlebao. Junlebao and Mengniu maintain certain cooperation in milk sources and channels. As a result of the lessons learned from the cooperation with Sanlu, Junlebao has always maintained relatively independent operation and leveraged development in the cooperation with Mengniu.
03 Junlebao's "hidden disease" Nowadays, when it comes to dairy giants, Junlebao also has a certain reputation among them. The layout pattern from a single industry to a diversified industry has won the confidence for Junlebao to be deeply cultivated in the industry.
According to the data of the index in the past six months, among the dairy companies such as Mengniu, Yili, Junlebao and Adopt a Cow, Junlebao's popularity performance is not inferior, not only continues to lead the adoption of a cow, but the gap between it and Yili is not large.
However, the old diseases left by Junlebao in the past development still cannot be ignored.
When it comes to Junlebao, there are still many people who associate it with "Sanlu". On Xiaohongshu, search for "Junlebao", and the search terms "Junlebao is the predecessor of Sanlu" and "Junlebao is Sanlu" will automatically appear. This also means that although the "Sanlu milk powder" incident has passed for a long time, and the cooperative relationship between Junlebao and Sanlu has been severed, in the public's impression, the "Sanlu" label on Junlebao is still difficult to completely remove.
The dairy industry is naturally quite different from other consumer goods industries, and consumers attach great importance to quality and safety, which has also become a major gap for Junlebao to rebuild brand trust.
The competition of peers is also a challenge that Junlebao has to face. At present, there is fierce competition among market players, not only dairy giants such as Mengniu and Yili, but also regional dairy brands represented by Junlebao, Shanghai Guangming and Beijing Sanyuan, as well as a number of emerging Internet players such as Adopt a Cow, Kashi and Jane Eyre.
According to the analysis, Junlebao has certain shortcomings in several core factors related to dairy enterprises, such as milk source, market share, and net profit.
Taking milk source as an example, data from the Toubao Research Institute shows that from 2020 to 2021, the milk source rate of Junlebao is only 50%, which is far from local dairy companies such as Tianrun Dairy and Sanyuan Co., Ltd.
In addition, Junlebao has a low-price strategy in the operation of milk powder. In 2017, Wei Lihua, chairman and president of Junlebao, once said: "Some people suggested that Mr. Wei, we have such a good milk powder, at least 250 yuan, 280 yuan, and some people say that it is bold to sell 800 yuan." We put forward a point of view, so that every Chinese child can drink the world's top good milk powder, 130 yuan a can. ”
The low-price strategy has allowed Junlebao's milk powder to achieve rapid development, but it also means lower profit margins.
In recent years, there have been many dairy companies that have launched IPO plans, including companies such as Adopt a Cow, Wandashan, and Yeepin.
Among them, the listing process of some companies is not smooth. In this regard, industry insiders analyze that most of these unlisted companies have the problem of a high degree of regionalization and a single product structure. In the face of the impact of the "duopoly" of Yili and Mengniu, it will still face challenges from four aspects: products, channels, marketing and promotion, and talent shortage.
At present, when it comes to the listing threshold, it is worth looking forward to whether Junlebao can withstand these tests and create a new case of dairy enterprise listing.
References: 1. China Business News: Junlebao announced its IPO: from a corner to a dairy giant.
2. Value Planet: Junlebao is going to IPO, but capital can't laugh.
3. Xiangshan Finance: Ranking among the top three domestic milk powder, Junlebao's highlights and hidden worries.