In the context of intensified market competition, the road to IPO of food companies is becoming more and more difficult. Submit an application, sprint for three years, and take the initiative to cancel the order ......Sichuan Baijia Akuan Food Industry Co., Ltd., which tried to win the A-share "first share of convenient fast food", was hereinafter referred to as "Akuan Food"), but in the end, it was "one foot in the door". Recently, Akuan Food took the initiative to withdraw its listing application, so far, there are no food companies under review on the Shenzhen Stock Exchange, and only one is under review on the Shanghai Stock Exchange. Not only Akuan Food, but also the IPO of many food and beverage companies in 2023 will also be terminated. The China Securities Regulatory Commission (CSRC) has said that companies that have recently withdrawn their listing applications mainly have problems that affect their ability to continue operations, such as insufficient control stability and declining performance.
Companies frequently withdraw their IPOs
The chewy dough and the scorching red oil spicy seeds, the red oil dough that can be eaten after simple processing have become the Internet celebrity fast food in recent years. In a 2020 "Internet celebrity fast food praise list", red oil dough ranked third after snail noodles and self-heating hot pot, surpassing classic categories such as hot and sour noodles.
The representative brand of red oil dough is Akuan Food. Whether it is in the search of social platforms or shopping software, "Ah Kuan" is deeply related to "red oil dough"**. As early as the end of 2021, under the approval system, Akuan Food submitted a prospectus, and the company was transferred to the Shenzhen Stock Exchange for review after the full registration system in March 2023.
However, Akuan Food, which has been on the road to listing for 3 years, has still failed to knock on the door of the capital market. On December 19, 2023, the Shenzhen Stock Exchange announced that the Shenzhen Stock Exchange decided to terminate the company's listing review due to the withdrawal of the listing application submitted by Akuan Food on December 7.
It is worth noting that with the withdrawal of materials by Akuan Food, there are no food companies under review on the Shenzhen Stock Exchange. There is also only one food company under review on the Shanghai Stock Exchange. Since the implementation of the comprehensive registration system, the listing of food enterprises on the main board has been greatly affected, and it seems to be becoming more and more difficult to "eat" a listed company.
From the perspective of the overall environment, the current capital market has become more cautious in the review and decision-making of "food, clothing and housing" enterprises, and market regulators are also strengthening the review of IPO companies. After the phased tightening of IPOs, companies in the catering industry, which are regarded as the "red light industry", began to withdraw orders one after another.
Statistics show that in 2023, a total of 17 food and beverage companies will apply for termination of review. Among them, a number of companies concentrated on the second half of the year to "cancel orders", such as Wandashan Dairy at the end of June last year, the fourth impact on the IPO failed, the time-honored Texas Grilled Chicken withdrew its application on September 25, 2023, Lao Xiang Chicken and Lao Niang's Uncle withdrew their applications on August 28, 2023 and November 13, 2023 respectively, Miss Food withdrew its application on November 20, 2023, and Ocean Family, Xian Meilai, and Longjiang Wagyu, which focus on the agricultural and sideline food processing industry, successively withdrew their applications on August 14, September 6, 2023, On September 15, the application for termination of the review was made.
"Heavy marketing and light research and development" has become the main reason for constraints
It is an indisputable fact that there are more and more competitors, the market impact is becoming more and more obvious, and the diversion after the liberalization of consumption scenarios has slowed down the growth of the food and beverage market.
Most food companies "terminate their IPOs" by voluntarily canceling orders after entering the inquiry stage.
In February last year, the official document clearly mentioned that "the main board of Shanghai and Shenzhen is positioned to highlight the first-class blue-chip characteristics, focusing on supporting high-quality enterprises with mature business models, stable operating performance, large scale and industry representativeness". The relevant documents clearly point out that the products are relatively traditional mass consumer enterprises such as food and home appliances with low industry barriers; Enterprises engaged in fast-selling restaurant chain business should be prudently grasped by comprehensively considering factors such as business period, enterprise scale, brand awareness, public reputation, and operation specifications.
According to the requirements of the above-mentioned documents, there are many enterprises that do not meet the standards in terms of business performance alone. For example, the old lady's uncle, the revenue from 2019 to 2021 is 122.2 billion yuan, 120.7 billion and 152.5 billion yuan, net profit of 6576530,000 yuan, 2175540,000 yuan and 638470,000 yuan. In the first half of 2022, the operating income was 62.2 billion yuan, but the net profit is only 7510,000 yuan.
In this regard, Zhu Danpeng, an analyst of China's food industry, believes that "in the future, the country's review and evaluation of listed companies will become more and more stringent, and the company does not have scientific and technological content, does not meet high-tech standards, lacks product safety and security, and does not have performance and profit growth, and it will be more difficult to go public." The food industry is one of them. ”
Zhu Danpeng said that first of all, food companies, especially the FMCG industry, generally have the problem of "emphasizing marketing over research and development".
Secondly, catering companies seeking to go public have the problem of strong geographical dependence and worrying about sustainable profitability. For example, the two catering stores of Lao Niang Uncle and Lao Xiang Chicken are concentrated in Jiangsu, Zhejiang, Shanghai, Anhui and Central China.
In addition, some enterprises have food safety hazards and the overall market scale is insufficient, which does not meet the standards for A-share listing.
The development of the food and beverage industry, generally speaking, is the innovation of models and packaging, and it is difficult to have the kind of big achievements in the field of science and technology that directly promote the progress of productivity. This is the sentiment of many practitioners.
Due to the characteristics of the food industry, some food sub-industries have homogeneous competition and low market concentration. Problems such as the obvious tightening trend of the main board, the instability of corporate performance, and the lack of core competitiveness have become important factors for the failure of IPOs of consumer enterprises. "For food companies, only by strengthening their profitability and strengthening their moats can they cope with more and more complex market environments. Industry experts point out.
Building core competitiveness is the key
It is worth mentioning that among the many companies that have failed to IPO, Sobao Protein, which is mainly engaged in soybean protein processing, has gone against the current and has become the only food company to successfully land on the A-share market in 2023.
Sobao Protein combines its main products with biotechnology, and the company has biotechnology attributes, which is in line with the current review trend of the financial market to focus on supporting the development of scientific and technological innovation. In the eyes of industry insiders, Sobao Protein has expanded the industrial chain through the acquisition of subsidiary biotechnology, and through stable performance growth, competitive advantages in the industrial chain, combination with biotechnology and prominent market position, it can also "win" in the unfavorable background.
In terms of performance, from 2020 to 2022, the operating income of Sobao Protein will be 127.9 billion yuan, 158.6 billion yuan, 184.7 billion yuan, net profit attributable to the parent company of 09.8 billion yuan, 12.4 billion yuan, 16.8 billion yuan, showing sustained and stable performance growth. Secondly, the direct sales revenue of Sobao protein exceeds 60%, and the proportion of distribution model revenue in the main business income is about 30%, and the income source is easy to recognize.
In addition, more and more businesses are choosing to divert their routes. For example, after the termination of the main board IPO, the old lady turned to *** Mixue Bingcheng to submit a prospectus to the main board of the Shenzhen Stock Exchange to no avail, and on January 2, 2024, he officially submitted a listing application to the Hong Kong Stock Exchange; Lancang Ancient Tea, which IPO in World War III, chose to move to the Hong Kong Stock Exchange after the failure of the A-share sprint, and was successfully listed on December 22, 2023; After withdrawing its A-share declaration, Yanzhiwu was listed on the main board of the Hong Kong Stock Exchange on December 12, 2023, and finally became the "first bird's nest stock". The analysis points out that the companies that have successfully listed on the Hong Kong stock market have more or less advantages that other companies do not have. For example, Yanzhiwu is in a leading position in the bird's nest industry, according to the Frost & Sullivan report, in 2022, Yanzhiwu occupies a market share of 14 bird's nests in China0%, ranking first.
For the perseverance of food and beverage companies to seek listing, Zhu Danpeng believes that in order to enhance their comprehensive strength, broaden the "moat" and grand strategic layout, enterprises need to be empowered by the capital market.
Food companies that can be successfully listed have the characteristics of core competitiveness or leading position in their respective segments. In his view, although some food and beverage companies terminate their IPOs, it does not mean that the prospects and opportunities of the industry do not exist. With the continuous improvement of China's economic level, in the context of consumption upgrading and digital transformation, the rapid development of emerging formats such as takeaway and stay-at-home economy has brought new growth points to the food and catering industry, and also provided enterprises with opportunities to integrate resources and expand market share.