Depth independent penetration
The difficulties that are overcome are the opportunity for victory!
Author: Chen Xuesong.
Edit: Anning.
Fengpin: Smell.
*: Shoucai - Shoutiao Institute of Finance and Economics.
Food safety is as important as Mount Tai.
On February 2, a netizen in Hangzhou, Zhejiang Province posted that his takeaway order Yang Guofu Malatang, but ate the blade at the bottom of the bowl. The police have been reported and complained to the Municipal Supervision Bureau.
On February 4, the store involved posted a meal monitoring**, saying that if there is a blade, the chopsticks can be felt stirring in the bowl. On the 7th, the staff of the local Municipal Supervision Bureau said that no blades were found in the on-site inspection, and the two sides have reached a settlement.
A false alarm, which can be described as a blessing, still sounded the alarm. Food safety is never a trivial matter, and there are not many IPO companies that have failed in the past, and for Yang Guofu, who is seeking to go public, there is nothing wrong with being crowned without responsibility.
From the fine of Sierxin on Chinese New Year's Eve on February 9, to the intensive fines of 5 securities firms in recent days, and then to the IPO investigation for ten years, the CSRC after the new boss took office can be described as a big move. In the face of the "long tooth with thorns" type bright sword, as the saying goes, real gold is not afraid of fire, and there are recent rumors of listing rumors of Hefu Lao Noodles, as well as the four-punch IPO of Tiandi No. 1, there have also been questions about food safety and losses in the past, is the strength enough and can it be successfully listed?
The goal of thousands of stores has failed, and the loss is turned around
Ten years of planting trees can become trees, but enterprises are not necessarily.
On January 15, according to the Financial Associated Press and Guanguan.com, people familiar with the matter revealed that Hefu Lao Mian is planning a public offering (IPO) in Hong Kong with a scale of 100 million to 200 million US dollars. According to Hong Kong media am730, Hefu Lao Mian will open its first branch in Hong Kong.
Although there has been no official announcement of the company, it is logical to stretch the dimension and the market is concerned.
As early as the beginning of 2022, Juewei Food announced the news that Hefu Lao Mian was going to be listed, saying that its wholly-owned subsidiary, Shenzhen Wangju Investment Co., Ltd. (hereinafter referred to as "Shenzhen Wangju"), in which Hefu Lao Mian is a shareholder, intends to implement an overseas listing plan, or will sprint to the Hong Kong Stock Exchange within the year.
According to public information, Hefu Lao Mian is a traditional Chinese restaurant chain brand featuring noodles, focusing on herbal soup, and advocating health preservation and slow life. Since its establishment in 2012, it has focused on the mid-to-high-end catering market, and its product pricing is higher than that of its peers, such as the most advanced crab roe noodles that have reached 108 yuan.
By the end of 2023, Hefu Lao Mian has completed its first decade, how are the fundamentals performing?
According to the data, the number of brand stores exceeds 500, with more than 20 million members, and a 15,000-square-meter first-class factory has been built to support nationwide cold chain distribution.
At first glance, the report card is remarkable, but there is still a huge gap between the grand goal of "opening 20,000 stores" set by the founder Li Xuelin.
In 2018, Hefu Lao Mian set the target of 1,000 stores in 2023, but even so, the gap between the ideal and the reality is still obvious.
In addition to Hefu Lao Noodles, it also includes new models such as retail sector Hefu Daojia, Pickme Coffee & Hot Food, Cup of Ramen, Alan Jialanzhou Beef Noodles, and God of Wealth Meat Skewers. Taking Hefu Daojia as an example, this sector focuses on the development of high-quality and diversified staple food side dishes and snack products.
The embarrassment lies in the fact that the performance of Hefu Lao noodles with high unit price and rich business is not outstanding.
According to the data previously announced by Juewei Food, from 2020 to 2022, the revenue of Hefu Lao Mian will be 110.7 billion yuan, 173.2 billion yuan, 145.6 billion yuan, net profit in the same period -20.6 billion yuan, -21.1 billion yuan, -29.9 billion yuan. Not only has it lost more than 700 million yuan in three yearsIn 2022, there will also be a growth decline in revenue and worsening losses.
The good news is that the company's internal letter in 2023 shows that in the first half of the year, the revenue and the number of new stores in Hefu Lao Mian hit a record high, the monthly revenue continued to rise, the single-day peak was continuously refreshed, and the new stores in third- and fourth-tier cities performed outstandingly. As a result, the loss turned into a profit, and the revenue was 84.6 billion yuan, net profit 0$1.4 billion. And has sufficient cash reserves, which can provide assistance for the development of the second half of the year.
Wang Tingyan, an industry analyst, said that it is commendable to improve performance in 2023. However, it should be noted that the times are changing, and the wave of consumption upgrading that once helped Hefu Lao noodles jump has receded, and has been replaced by a more cost-effective and quality-price ratio of consumption preferences. It took 10 years to make a profit, and whether the follow-up improvement can be sustained, after all, compared to 84.6 billion yuan in revenue, 0The net profit of 1.4 billion yuan is only a small profit.
Be wary of scale risks and pre-made dishes
Indeed, it is great wisdom to follow the trend. Entering the second decade, Hefu Lao Mian wants to realize the long-cherished wish of IPO and prove the value of success, and the direction of the crossroads is very important.
On December 22, 2023, founder Li Xuelin disclosed two important pieces of information at the "Brand 2024 Strategy Conference". First, the joint operation will be opened in 2024, and second, its products will improve the cost performance.
Industry analyst Guo Xing believes that Li Xuelin is clearly aware of the new changes in the market. It's just that it remains to be seen when the two strategies will work, whether they will work, and the pros and cons. The "price reduction" of the left hand and the "joining" of the right hand are all stories of scale and capital. However, to really talk about it well, it also highlights the importance of franchisee management in place and quality control and risk control construction. Don't forget, in addition to the scale effect, there is also a scale trap, in the past, due to the lack of brand management, or franchisees deceived and concealed chaos, and finally reversed the quality experience, corporate goodwill is not uncommon.
Combing the recent **, compared with the listing rumors, the controversy over prefabricated dishes and seasoning packets has attracted more attention.
According to Caijing Wuji, as soon as the company's first store opened in 2013, Li Xuelin found a batch of expired spoiled beef tongue in the back kitchen, and then ate the spoiled beef tongue in front of the staff. Li Xuelin hopes to make every employee aware of the red line of food safety.
Looking at it more deeply, focusing on quality is also the confidence of the high customer unit price of Hefu Lao Noodles. According to public information, Hefu Lao Mian highlights the ingenuity of "one bowl of noodles in ten years" to create a slow life brand concept of "herbal soup, a bowl of health" for customers.
However, in 2023, according to China.com Finance and Blue Whale Finance, an employee within Hefu broke the news: "Unlike Chen Xianggui and Ma Jiyong, there are no ramen chefs and chefs in Hefu Lao Mian stores." The noodles are made in the factory, the toppings are basically pre-made, and they only need to be heated, and the soup is mixed with water in the cooking packets. ”
In addition, Blue Whale Finance also dug up a company called Sichuan Meiweiyuan, which is a partner of Hefu Lao Noodle Soup. The base material of the "big bone soup" of the delicious source can be bought for a bucket at **42 yuan, and the soup can be adjusted to 200 catties. This also made the outside world suspicious of the "herbal soup" promoted by Hefu Lao Noodles and fell into the storm of prefabricated dishes.
Browsing the black cat complaints, as of 20:00 on February 21, 2024, there have been a total of 77 complaints related to Hefu Lao noodles, which is really not much, but the content mostly involves product quality and service.
For example, on December 15, 2023, the complaint numbered 17370421077 showed that on December 14, a consumer ate a bowl of fat beef noodles in sour soup at the Roosevelt store in Dalian. Gastroenteritis and abdominal pain began at 10 o'clock in the evening, diarrhea at 2 o'clock in the morning and a mushy stool, vomiting at 5 o'clock with watery vomit mixed with sauerkraut mixed with sour soup and fat beef noodles, and vomiting again at 6 o'clock. Consumers complained to the store but were perfunctory ......
Another example is on November 30, 2023, the complaint of the numbered 17370142999 shows that a consumer and his friends in Beijing Yongfeng Yue Jiedian in the evening of the same day were both unwell after eating the fat intestine noodles of Hefu Lao Noodles, and they were nauseous in the car, and felt very hard when eating. The store that contacted Meituan was not connected.
On October 25, 2023, the numbered 17369419059 complained that he waited for half an hour to continue the noodles with Fulao noodles, and even called three different waiters three times to urge him but still couldn't get it, and finally kept pulling the list there, and then the last woman she called said that she would serve it directly, and then brought a bowl of noodles.
On December 3, 2023, the complaint of the numbered 17370193582 showed that the consumer claimed that the order of Hefu Lao Mian Meituan did not issue an invoice for two days, and during this period, he sought help from Meituan and Hefu Lao Mian customer service several times to ......no avail
To be sure, it is not realistic for consumers to be satisfied with everyone, and the above complaints may be biased and one-sided. But as mentioned above, food safety is no trivial matter, and this is especially true for Hefu Lao Noodles, which is open to franchise and improve cost performance.
How to do a good job in quality control, risk control, and quality-price ratio while expanding the scale and showing the growth of muscles. Under the tide of healthy consumption, the disappearance of "prefabricated dishes" questioning and maintaining high-end reputation feathers is a hurdle in front of Li Xuelin.
It's tempting to let go of the high-end figure and the new story, but there is still a long way to go to really tell it well.
A year and a half of accumulated losses of 2800 million
The generous dividends are reasonable
Looking at Heaven and Earth No. 1 again, there are also a lot of hurdles to pass.
On January 26, 2024, Tiandi One announced that it had signed a counseling agreement with CITIC ** and planned to be listed on the main board of the Shenzhen Stock Exchange.
Stretching the dimension, Tiandi No. 1 is already an IPO veteran and has sought listing three times. As early as August 2012, it submitted the initial public offering** counseling and filing registration materials. According to the Yangtze River Business Daily, it may be stranded due to the impact of product series violations.
In July 2013, Tiandi No. 1 turned to *** in August 2015.
In February 2016, it tried to hit A-shares again, and it lasted 3 years and ended in December 2019. In March 2022, it fought again, and in early March 2023, it announced that it would withdraw its application, and the reason given was the adjustment of business and strategic development planning.
It is said that ten years of sharpening a sword, going around the world for more than 11 years, and still unsuccessful. In the end, the shell is stuck**? What are the chances of winning this "four wars"?
Fundamentals are both value and confidence. According to public information, Tiandi No. 1 was founded in 1997 and is a joint-stock enterprise integrating R&D, production and sales of vinegar beverages and other beverages. The main products include Tiandi No. 1 aged vinegar beverage, Tiandi No. 1 apple cider vinegar beverage, hawthorn vinegar beverage, Bama No. 1 natural drinking spring water, etc.
From 2019 to 2021, Tiandi No. 1's revenue was about 258.5 billion yuan, 18$9.9 billion and $181.7 billion yuan, with a net profit of about 38.2 billion yuan, 25.1 billion yuan, 25.5 billion yuan. The overall growth is not pleasant.
Entering 2022, there has been a big change in performance: revenue plummeted to 101.3 billion yuan, a year-on-year decrease of 44%, and the first loss of 1600 million yuan, down 162 million year-on-year71%。
Fortunately, in the first half of 2023, the performance has picked up. Revenue33.9 billion yuan, a year-on-year increase of 583%；Net profit -12.9 billion yuan, a decrease of 3072%。
It's just that it's still a loss, and it's just a year and a half of more than 2800 million yuan. For a fast-moving consumer goods company, this is obviously a hard injury, and how to turn around the loss is the first hurdle for Tiandi No. 1.
It is worth noting that Tiandi No. 1, which is persistently listed, has been very "generous" in dividends in the past. Flush data shows that the company has paid dividends 12 times, with a total dividend amount of 231.7 billion yuan.
From the perspective of equity structure, as of the end of 2021, the largest shareholder is Chen Sheng, founder and chairman of Tiandi No. 1, with a shareholding ratio of 7253%。It is obvious who most of the above dividends have gone to.
Taking 2021 as an example, Tiandi No. 1 plans to distribute 7 yuan (tax included) for every 10 shares, with a total dividend of 30.9 billion yuan, far exceeding the 2 of that yearNet profit attributable to the parent of 5.5 billion yuan.
Dividends while going public, is there a shortage of money? Looking at the big change in performance in 2022, is it too arrogant? Eroding the future growth of overdraft enterprises? Is it more fragrant to use more main business improvement, strategic incubation, and core competitiveness cultivation?
The process of nationalization is slow, and the cost reduction can be solved?
It's not too demanding. In-depth fundamentals, how to understand the region, product concentration dependence concerns is a top focus.
In 1997, Chen Sheng, a graduate of Peking University, captured the demand for "Sprite mixed with aged vinegar". Subsequently, the production personnel were organized to develop related aged vinegar drinks, and in July of the same year, Tiandi No. 1 Beverage was launched and successfully sold.
The consideration is that at present, Tiandi No. 1's revenue is still highly dependent on vinegar beverage products, and the resulting growth bottlenecks and hidden business dangers have to be investigated.
According to the financial industry, in the first half of 2023, the revenue of apple cider vinegar products will be about 29.9 billion yuan, accounting for about 88 percent of total revenue20%。From 2019 to 2022, it accounted for more than 90%.
Secondly, from the perspective of the market, although it has covered Guangdong, Guangxi, Hainan, Jiangxi, Hubei and other places, Guangdong is still the largest area in terms of income. From 2019 to 2021, the sales revenue in Guangdong Province accounted for more than 65% of Tiandi No.1's main business income.
Naturally, this is not conducive to the growth of the company, especially for FMCG companies.
Combined with previous actions, Tiandi No. 1 is also well aware of its own bottlenecks. According to Beijing Business Daily, as early as 2016, Chen Sheng formulated the "North Expansion Plan", which, according to China Business Daily, is similar to the "rural encirclement of the city" route that Wahaha has used to gain a foothold. The reason why the company does this is largely to avoid the barriers and competitive pressures of the urban market.
Taking the first half of 2018 as an example, the company's sales expenses reached 29.4 billion yuan, a year-on-year increase of 2149%。However, such investment failed to bring corresponding revenue growth, and net profit shrank sharply: revenue 59.4 billion yuan, a year-on-year increase of 72%；The net profit was 3.19 million yuan, a year-on-year decrease of 9481%。Among them, the net profit after deduction was -24.01 million yuan, a year-on-year decrease of 16966%。
Industry analyst Sun Yewen said that the sales fee is only the face, and the key is still in the product. Apple cider vinegar has not become a popular drink, mainly because fruit vinegar drinks will have a pungent acetic acid taste compared with ordinary fruit juice, sparkling water and other drinks due to the fermentation process, which is unacceptable to some consumers. At present, the fruit vinegar market is divided into two camps, the north and the south, the high-end products are mainly concentrated in Guangdong and the Pearl River Delta region, and the northern market is covered by small and medium-sized brands with messy and low prices, which hinders the "north expansion" of Tiandi No. 1 to a certain extent.
Indeed, the key to breaking regional dependence is also to look at product strength. As early as 2013, Times Weekly reported that the raw material of apple cider vinegar, the flagship product of Tiandi No. 1, was actually the concentrated apple juice of Huiyuan in the next year that could be stored in violation of regulations and may deteriorate; In the apple cider vinegar fermentation workshop, the reporter also found a large amount of vinegar essence and flavor, and Tiandi No. 1 was suspected of blending inferior apple cider vinegar drinks with "three essences and one water".
In response to this question, Chen Sheng personally responded that the company's apple cider vinegar products are produced without vinegar and saccharin. In production, apple juice is first made into cider, and then into apple cider vinegar, and the apple cider is also called "vinegar base" inside, * or there may be a mispronunciation of "vinegar essence".
As for flavor, Chen Sheng said that basically all domestic beverages have added flavors, which are allowed to be added by national standards and are also commonly used raw materials in the beverage industry.
Which is right and which is wrong, the wise man does not make an evaluation when he sees wisdom. What is certain is that the market has never lacked choices, and under the trend of healthy consumption, the big waves will not retreat. Browsing the black cat complaints, some front-line voices need to be vigilant by enterprises.
For example, the complaint of the number 17371333357 said that a consumer bought apple cider vinegar on Douyin Tiandi No. 1 official***, and found that there were few goods after receiving the goods, and the customer service has only replied to contact the logistics feedback processing, but there has been no processing result for many days, and every time he contacts the customer service, he can't get the result.
Another example is the complaint No. 17367400858, which alleges that a consumer purchased a box of Tiandi No. 1 apple cider vinegar at Duoduo on July 3, 2023, and the goods sent by Duoduo were counterfeit and shoddy products. 1.Each bottle is coated with a potion that coats the bottom of the production lot and date. 2.The printing is very rough and unclear. 3.The outer box was deducted by someone with Xiao Er*** The fraud is very obvious, and the food safety harm is huge!
(The above complaints have been reviewed by the platform).
Saying a thousand things, firmly establishing a quality control and risk control fence is the first essence of sticking to users and market breakthroughs.
From 2020 to 2022 and in the first half of 2023, the sales fee of Tiandi One is 77.6 billion yuan, 67.5 billion yuan, 52.2 billion yuan, 22.1 billion yuan, corresponding to a growth rate of -3012%、-13.05%、-22.71%、-25.93%。
R&D expenses for the same period were 3340160,000 yuan, 4050920,000 yuan, 2339380,000 yuan, 1062920,000 yuan, the corresponding growth rate is. 28%、-42.25%、-16.89%。
Reducing costs can help enterprises reduce losses, but blind shrinkage is not a long-term solution and is not conducive to cultivating the long-term competitiveness of enterprises.
Industry analyst Wang Tingyan believes that many industry giants are trying to cut into the apple cider vinegar track. For example, Pepsi Cola, as early as 2018, launched the "Language of Vinegar" fruit vinegar sparkling drink. Coca-Cola's Minute Maid has also launched apple cider vinegar drinks. With such fierce competition, it is urgent for Tiandi No. 1, which has the obsession of going public, to respond in advance and tell a good growth story.
Welcoming the new ecology when the obstacle is broken
We have to work harder!
On February 6, the Shanghai Stock Exchange announced that the IPO of "Adopt a Cow", which had been asked by a series of 48 questions, was withdrawn. Wind data shows that as of February 21, 45 IPOs have been terminated on the Shanghai-Shenzhen-Beijing stock exchanges in 2024.
On February 18, the China Securities Regulatory Commission held a series of symposiums to listen to opinions and suggestions on strengthening capital market supervision, preventing and resolving risks, and promoting the high-quality development of the capital market. According to some ** evaluations, the association has released a signal of stricter IPO access, and it is likely to further strengthen the supervision and inspection of companies to be listed in the future.
In the face of the new listing ecology with stricter review and higher thresholds, Hefu Lao Mian and Tiandi No. 1, whose fundamentals are not good, must quickly eliminate the blockages and make changes if they want to successfully jump over the dragon gate.
The good news is that both companies have taken action and some positive improvements are encouraging. At the end of 2023, Hefu Lao Mian announced at the press conference that it will fully launch the strategy of "finding friends, going to sea, sinking, and deep layout".
"Find friends" refers to the full opening of the franchise, officially entering the "direct + associate" model. According to the company's estimates, by 2026, there will be more than 2,000 Hefu Lao noodles and 1,500 Alan homes across the country.
"Sinking" refers to the sinking of the product. Li Xuelin said that the overall decline of the brand is about 30%, and the proportion of products with 25 yuan to 30 yuan is increased. Categories such as snacks, fried goods and drinks have also been launched.
"Go to sea" that is, to open overseas markets. According to Li Xuelin, Hefu Lao Mian will use Hong Kong as a bridgehead to enter Japan, Singapore and other countries to explore the possibility of the global market.
"Deep layout" refers to focusing on the three key words of "health, green, and inclusiveness", improving the quality-price ratio of products and services, and bringing consumers a high-quality new experience of inclusive health care.
It can be seen that the reform of Hefu Lao Mian is all-round and systematic. Coupled with the successful turnaround in the first half of last year, the company does not lack the confidence to fight for IPO again.
Looking at Tiandi No. 1, Wang Zhenxing, who has rich experience in IPO, was recently appointed as vice president and secretary of the board of directors.
According to public information, from July 2015 to December 2023, Wang Zhenxing worked in the investment banking department of CITIC ** Co., Ltd., successively served as senior manager, vice president, and senior vice president, during which he was responsible for or participated in capital operation projects such as the IPO of CP shares, the non-public offering of Yili shares, the IPO of Tiandi No. 1, and the IPO of Xifeng Liquor, and has rich experience in capital operation in the consumer industry.
In addition to professional talents, Tiandi One is also trying to promote the renewal of brand products. For example, at the beginning of 2023, he used the TV series "Hurricane" to give away 10 tons of apple cider vinegar products to expand the brand's voice; In the same year, with the sub-brand of "Little Lord", the "Hawthorn Little Lord Hawthorn Vinegar Drink" was launched. It also crossed over to the coconut water track and launched a new product of raw coconut water. According to reports, the product does not contain flavor pigments, 0 preservatives are healthier, sweet and delicious, and the coconut fragrance is rich, enriching the product matrix.
Opportunity always favors those who are well prepared. Winston Churchill once said that the difficulties that are overcome are the opportunities for victory. Similarly, the various slots and obstacles in the past issues of Hefu Lao Mian and Tiandi No. 1 are also the breakthrough points for the subsequent value jump.
Investing is always dynamic. If viewed from a development perspective, Tiandi No. 1 and Hefu Lao Mian do not lack growth potential, but lack time, efficiency and accuracy to solve problems.
The strong supervision of IPO and the raising of the threshold are both an inflection point and a competition point. The new cycle and new normal will ultimately reward those enterprises that have polished their competitiveness and adhered to high-quality development.
Will it be Heaven and Earth No. 1 and Hefu Lao Noodles?
This article was originally written by Shoucai