Listed for more than 5 years, the new products launched by Golden Throat have been frustrated, failing to change the dilemma of a single product, the root cause of which is inseparable from its heavy marketing and light research and development, resulting in its decline to the end of being privatized and delisted. However, listing is not the end, delisting is also not the end, if the golden voice continues to despise research and development, the end is already doomed.
Source | Manager Media's Manager magazine
All-media reporter / Sun Chen
Original title: Golden Voice "Dumb Voice"
"Protect your throat, please use a golden throat throat piece, Guangxi golden throat!"
This advertising slogan made Guangxi Golden Throat famous, becoming a household name in China, and is the memory of a generation, but the company that runs the brand has entered the countdown to delisting, but the delisting ultimately failed.
On October 29, Hong Kong stock Golden Throat (Golden Throat Holdings Group Limited; 06896. HK) issued a privatization announcement. According to the announcement, the Offeror (a company indirectly wholly owned by the Founders Holdings Company and Yafu Holdings) and Golden Throat intend to privatize the Company by way of an agreement arrangement, canceling it at a cancellation price of HK$2.8 per share, with funds provided by Yafu Fund.
After the completion of the tender offer, the existing business of Golden Throat will not change, and the overseas trust institutions founded by Jiang Peizhen's son Zeng Yong and Yafu Fund will hold 70.72% and 29.28% of the shares of Golden Throat respectively. Golden Throat expects to withdraw its listing status on the Stock Exchange at 9:00 a.m. on Wednesday, 15 December 2021.
On 30 November, Golden Throat's privatization plan was not approved by the court meeting and the general meeting of shareholders, and the plan failed to take effect and has lapsed, and will maintain the listing status of the Stock Exchange. The news caused the share price of Golden Throat to plummet, down 37.74%, and the closing price was 1.6 yuan / share.
Previously, for the reasons for delisting, Golden Throat concluded that since the listing for five years, the company's financial performance has been mixed, and the new products launched are not attractive enough, resulting in a decline in stock prices and an increasing lack of liquidity in stock trading.
Judging from the above summary, the golden voice's cognition of itself is still relatively in place, but it is worth thinking about which link the golden voice has a problem from the glory to the end. In addition, if it fails to be successfully delisted, where should the golden voice go?
The brilliant moment of "Migrant Girl"
To discuss the rise and fall of the golden voice, everything must start from its founder Jiang Peizhen.
In 1946, Jiang Peizhen was born in Pingnan, Guangxi, and when she was just 13 years old, due to the early death of her mother and the poverty of her family, she was forced to enter the Liuzhou City Candy No. 2 Factory as an apprentice and start a social career.
With her outstanding performance, Jiang Peizhen completed the transformation from apprentice, group leader, youth class leader, workshop director, trade union and female workers' committee, until February 1979, at the age of 33, she was appointed as the director of the factory.
Jiang Peizhen, who served as the director of the factory, led the technicians to germany, France and other advanced countries to learn new technologies, introduced advanced production lines, and the second candy factory was able to create a number of "firsts" in China, such as sauce candy, peanut chocolate, wine heart chocolate, etc.
Under the leadership of Jiang Peizhen, the second candy factory has achieved great results. Data show that in 1984, the annual output of the second candy factory reached 165,000 tons; in 1988, the output value reached more than 97 million yuan. Jiang Peizhen personally continued to study, and obtained the senior economist qualification certificate in 1992.
Also in 1992, with the rise of raw materials, the emergence of counterfeit products in an endless stream, and then superimposed on the "eating more sugar is not good for health" and other remarks, the sales of the second candy factory shrank sharply, and once fell into a situation on the verge of bankruptcy.
At that time, an entrepreneur symposium made Jiang Peizhen realize the importance of scientific and technological innovation, and to change this situation with scientific and technological products, so she personally went to East China Normal University in Shanghai to find scientific research patents in order to find new breakthroughs. During this period, Jiang Peizhen and biologist Professor Wang Yaofa met, the two hit it off, after in-depth exchanges, the latter gave a formula he was developing for the treatment of chronic pharyngeal disease to the candy second factory free of charge, and because of this, there was a later well-known over-the-counter drug "Golden Throat Throat Tablets", and at the same time, Wang Yaofa's head was also printed on the packaging box of the product free of charge.
In 1994, Jiang Peizhen initiated crowdfunding and raised 7.8 million yuan to establish Guangxi Golden Throat Pharmaceutical Factory, which mainly produces golden throat tablets. Soon after the golden throat tablets were listed, they quickly occupied the market, and the market share ranked first among similar products.
Being able to achieve this achievement is not unrelated to Jiang Peizhen's huge investment in advertising. According to a number of media reports, it spent 5 million yuan to advertise on CCTV in 1995, and achieved revenue of more than 100 million yuan in the following year.
In 1998, with the approval of the Liuzhou Municipal People's Government, Guangxi Golden Throat Co., Ltd. (hereinafter referred to as Golden Throat), which was restructured from the Second Candy Factory and Guangxi Golden Throat Pharmaceutical Factory, was established, and Jiang Peizhen and her son Zeng Yong became the actual controllers of the company.
On July 15, 2015, Golden Throat was listed on the Hong Kong Stock Exchange.
The successful listing is an affirmation of the business achievements of Golden Throat in previous years, but the listing is the starting point, not the end. With the help of listing, enterprises can broaden their own financing channels, make up for many deficiencies, is the basis for enterprises to become bigger and stronger, and achieve a century-old foundation, and from the perspective of the five-year delisting of Golden Throat, it has not been able to strengthen itself with the advantages of listing.
Single risk of products, new products encounter setbacks
As the first brand of throat lozenge in China, Golden Throat has a unique advantage. According to Euromonitor reports, Golden Throat's proprietary formula throat lozenges had a market share of about 25.8% in 2014, making it a well-deserved market brother.
However, behind the brilliance of this data is that the problem of a single golden throat product is very prominent. From 2012 to 2014, the sales of its product Golden Throat Throat Tablets accounted for 92.4%, 92.4% and 90.6% of the total sales, respectively, and other major drugs including Ginkgo Biloba Leaves, Gold and Silver Sanqi Capsules and Compound 100 Cough Suppressant Granules accounted for a lower proportion of its sales, accounting for 1.7%, 1.3% and 1.3% respectively.
Looking back at history, the performance of Golden Throat after its listing has generally shown a trend of not increasing but declining.
From 2015 to 2020, the operating income of Golden Throat fell from 707 million yuan to 647 million yuan, a cumulative decline of 8.49%, and the net profit increased from 155 million yuan to 154 million yuan, a decrease of 0.65%. Specifically, the operating income and net profit attributable to the mother of Golden Throat reached the highest value in 2019, respectively, at 797 million yuan and 168 million yuan (as shown in Table 1).
It should be pointed out that golden throat tablets have always been the main source of golden throat operating income, from 2015 to 2020, the achieved operating income was 649 million yuan, 669 million yuan, 559 million yuan, 628 million yuan, 721 million yuan, 582 million yuan, accounting for 91.8%, 87.12%, 89.58%, 90.49%, 90.46% and 89.95% of the total revenue, respectively. From this point of view, Golden Throat has not been able to change the situation of single products.
Although the Golden Throat Tablet is the largest part of the Golden Throat revenue, its sales are declining year by year. The data shows that the sales of golden throat tablets fell from 129 million boxes in 2015 to 0.91 billion boxes in 2020, a decline of 29.46%, which led to many factors in its sales decline, among which the continuous rise in product prices cannot be ignored.
From 2015 to 2020, the unit price of each box of golden throat throat tablets was 5 yuan, 5.4 yuan, 5.5 yuan, 6 yuan, 6.4 yuan and 6.4 yuan, with a cumulative increase of 28%; in addition, the price of its golden throat throat treasure series products in the same period was also rising, 4.2 yuan, 4.4 yuan, 4.9 yuan, 5.2 yuan, 5.2 yuan and 5.5 yuan, respectively, with a cumulative increase of 30.95%.
In contrast, the cost of sales of Golden Throat fell from 185 million yuan in 2015 to 171 million yuan in 2020, a decrease of 7.57%. Among them, packaging materials increased from 0.74 billion yuan to 0.75 billion yuan, raw materials increased from 0.41 billion yuan to 0.43 billion yuan, and labor costs decreased from 0.53 billion yuan to 0.39 billion yuan, with growth rates of 1.35%, 4.88% and -26.42% respectively.
The continuous rise in product prices has maintained the gross profit margin of Golden Throat Throat Tablets and Golden Throat Throat Treasure series products at a high level for a long time, with the gross profit margin of the former fluctuating slightly around 76%, while the gross profit margin of the latter in 2020 was 64.1% (49.6% in 2015).
However, from the above-mentioned gold throat throat tablet sales data year by year decreasing analysis, golden throat follow-up want to rely on increasing product prices to maintain gross profit margin will be more and more difficult, as of the first half of this year, the unit price of its golden throat throat tablets is 6.4 yuan, consistent with the price of the past two years, and the unit price of its golden throat throat treasure series products fell to 5.2 yuan. Raising prices to protect profits and maintaining high gross profits will become a thing of the past.
In fact, in recent years, Golden Throat has also tried to launch new products and change the situation of single products, but the effect is not ideal, and even puts the company into a brand reputation crisis.
In the first half of 2016, the Golden Throat Plant Beverage Series products positioned as "Throat Clearing and Throat" were officially launched. In that year, Golden Throat's revenue from the sale of other products was 0.45 billion yuan, an increase of 0.26 billion yuan year-on-year, mainly due to the launch of this product. However, sales and distribution expenses increased significantly to $319 million, an increase of $64 million year-on-year, due to an increase in advertising for the series. The loss of plant beverage products also led to a sharp decrease of about 52 million yuan in the net profit attributable to the mother of Golden Throat in the year.
In the following year, Golden Throat's revenue from the sale of other products was $0.17 billion, a decrease of $0.28 billion year-on-year, mainly due to a decrease in sales of plant beverages, while sales and distribution expenses for the same period were $306 million, a decrease of $0.14 billion year-on-year, mainly due to the decrease in advertising for plant products. In the following three years of earnings reports, In the management discussions and analysis, there was less and less analysis of the operation of plant beverage products. In addition, such products can no longer be searched in Tmall.
From this point of view, Golden Throat's plant beverage strategy ended in failure, but it should be pointed out that Guangxi Golden Throat Food Co., Ltd. (hereinafter referred to as Golden Throat Food), a subsidiary of Golden Throat, became the executor for not paying advertising fees, and Jiang Peizhen was also restricted from high consumption.
According to the judgment document, in July 2019, the court ordered Golden Throat Food to pay 51.67 million yuan to the plaintiff, Starry Sky Huawen International Media Co., Ltd. for advertising fees. In the same month, golden throat food refused to perform the obligations specified in the effective legal documents because it had the ability to perform, and became an executor and was restricted from high consumption. On September 11, jiang peizhen and other related objects were also restricted from high consumption. At present, the above restrictions on high consumption have been lifted.
Jiang Peizhen's restricted high consumption event reminds the market of the advertising "Rashomon" incident between Golden Throat and the well-known star Ronaldo. In 2003, Ronaldo endorsed the Golden Throat Larynx, but in 2007, he said he did not accept the endorsement of the advertisement and was ready to sue Golden Throat and CCTV, and there was no follow-up. However, Golden Throat later invited Ronaldo's compatriot Kaka as a spokesperson for 14.3 million yuan, but the advertising effect was not as good as Ronaldo.
Years later, this year, Golden Throat issued a solemn statement on its official website, saying that since 2003, the company has signed a number of agreements with Ronaldo, stipulating that Mr. Ronaldo will serve as the spokesperson for Golden Throat products in China and agree to use his portrait for television advertising. There are no internet rumors such as Jiang Peizhen "fooling Ronaldo".
At the same time, for Jiang Peizhen's high consumption restrictions, Jin Said said that he had reached a settlement with a media company and had fulfilled all payment obligations. For the privatization plan, Jin Said said that it is the privatization initiator's independent business decision-making, which is normal market behavior.
From landing in the capital market to the end of privatization and delisting, the single risk of Golden Throat's products, the unfavorable launch of new products, and the crisis of brand reputation play a very important role in it, which has not been able to give the market a "new story", and has also made its share trading liquidity increasingly insufficient, and the financing advantages brought by listing have gradually lost.
Light research and development, no way out
Listing is not the end, and delisting is not the end. From listing to delisting, companies need to face greater pressure, not only from the source of the company itself, but also from external public opinion. In this case, where should the golden voice go?
Until the announcement date of the privatization plan, about 90% of the revenue of Golden Throat still comes from Golden Throat Throat Tablets, but sales volume continues to decline, one possibility is that with the price increase of products, consumers turn to consume other products, which also shows that the loyalty of some users to Golden Throat Throat Tablets is not high, the brand premium rate is not as high as imagined, and the price increase strategy of Golden Throat is no longer feasible. In the case of a small increase in raw materials, if the subsequent forced price increase will only achieve a counterproductive effect, that is, the golden throat tablets will further lose more users.
At present, the main competitive products of Golden Throat Throat Tablets include Kyoto Nian Ci An Throat Candy of Kyoto Nian Ci Ling General Factory Co., Ltd., Lotus Mints of Cadbury (China) Food Co., Ltd., Watermelon Cream Lozenges of Guilin Sanjin Pharmaceutical Co., Ltd., Grass Coral and Bright Voice of Jiangzhong Pharmaceutical Co., Ltd., HuaSu Tablets of Huasu Pharmaceutical Co., Ltd., Wang Lao Jirun Throat Candy, and Slow And Strict Shu Lime of Guilong Pharmaceutical.
According to the data of Huajing Industry Research Institute, in the 2019 China Throat Lozenge/Tablet Brand Power Index ranking, the first to sixth brands are Kyoto Nian Ci Ling, He's, Golden Throat, Green Arrow, Wang Laoji, Slow Yan Shu Lemon, ranking third in the Golden Throat, and the brand power needs to be improved.
In the Tmall input keyword "run throat" search, the top ten sales of throat ring brand did not appear in the golden throat throat tablets or throat treasure, while Kyoto Nian Ci Ling (monthly total sales of 50,000 +) in the top ten monopoly two seats, slow Yan Shu Lemon (sales of 20,000 +), Longjiao San (40,000 +) is also in the top ten. Golden throat throat tablets ranked seventeenth, with sales of 9,000+, which is a large gap with the above brands, which may also be related to the offline distribution of golden throat tablets.
Subsequently, Golden Throat needs to strengthen its own brand awareness, which means that it needs to spend a large amount of advertising expenses, and at the same time, it needs to keep up with the times, change the traditional delivery strategy, and shift the focus to the mobile APP. Of course, the most important thing is that advertising only knows the product advertising, and retaining users ultimately relies on the product, after all, the iron still needs to be hard, which requires continuous research and development investment to do support.
In 2015, Golden Throat said in its annual report that it planned to invest 65 million yuan in research and development activities in the next three years, but the final cost of research and development was very different from its plan. According to the data, from 2015 to 2020, the research and development costs of Golden Throat were 2.289 million yuan, 1.724 million yuan, 2.089 million yuan, 2.195 million yuan, 2.894 million yuan and 2.793 million yuan, respectively, with a total of 13.984 million yuan in six years. In contrast, its sales expenses for the same period were 255 million yuan, 319 million yuan, 306 million yuan, 290 million yuan, 308 million yuan and 253 million yuan, totaling 1.731 billion yuan. The total R&D expenses in the six years accounted for 0.81% of the sales expenses in the same period.
As a pharmaceutical company, Golden Throat does not attach importance to research and development, and it is also a matter of course that the launch of new products is unfavorable, and more importantly, how can such a low research and development cost allow the company to develop new products in a timely manner according to market demand?
In December last year, Golden Throat once again launched a new product - Golden Throat Sausage Treasure (solid drink), query Tmall found that the monthly sales of the product is very small, single digits, of which 20 pieces of 289 yuan, 10 pieces of 149 yuan of sales of 2 and 5 respectively. How long does the product last?
In contrast, Baiyunshan (Wang Laoji's parent company) and Jiangzhong Pharmaceutical's expenditure on research and development expenses in 2020 were 612 million yuan and 0.56 billion yuan respectively, which was far higher than the research and development expenses of 2.79 million yuan of Golden Throat, which was completely incomparable.
Looking back at history, the golden throat basically did not have a product that could be taken, and its well-known golden throat tablets could be produced because Wang Yaofa gave the formula. The golden voice that failed to successfully delist, if it failed to make changes, still continued to emphasize marketing and despise research and development, and the end was already doomed.