Bingfeng Beverage Rush A is an unavoidable related party transaction behind it

Long-established enterprises set off a boom in listing, and Xi'an Bingfeng Beverage Co., Ltd. (hereinafter referred to as "Bingfeng Beverage") has also become a member of the customs clearance. Behind the listing, Bingfeng Beverage has a related party transaction label that is difficult to tear off. Judging from the disclosed prospectus, during the reporting period, more than 80% of the company's important raw materials - white sugar were provided by the "brother" company Xi'an Xi sugar tobacco and liquor chain supermarket Co., Ltd. (hereinafter referred to as "Xi Sugar Supermarket"), and Xi Sugar Supermarket ranked the second largest supplier of Bingfeng Beverage. Whether the relevant transaction price is fair is the number one question that needs to be answered by Bingfeng Beverage. At the same time, as a regional beverage company, behind the bingfeng beverage barrier, there are ambitions for a national layout, but whether the "going out" strategy is feasible must also be marked with a question mark.

The second largest supplier is brothers

Through the prospectus, it was found that during the reporting period, bingfeng beverage compatriots "brothers" turned out to be the second largest supplier of the company, and related party transactions became an unavoidable topic on the road to the IPO of Bingfeng beverage.

According to the prospectus, the main business of Bingfeng Beverage is the research and development, production and sales of orange flavored soda, sour plum soup and other beverages, and the main products are "Bingfeng" glass bottle orange flavored soda, canned orange flavored soda, glass bottle sour plum soup, canned sour plum soup, etc.

The main raw materials used in Bingfeng beverage include cans, white sugar, can lids, plums and cartons, among which white sugar is the second largest proportion of cost expenditure in the reporting period of Bingfeng Beverage. According to the prospectus, from 2018 to 2020, the amount of white sugar consumed by Bingfeng Beverage was about 30.2461 million yuan, 27.7137 million yuan and 30.1904 million yuan respectively, accounting for 21.21%, 18.89% and 17.16% of the main business costs in each period.

The Beijing Business Daily reporter noted that as one of the important raw materials, the white sugar of Bingfeng Beverage is mainly provided by "acquaintances". According to the prospectus, Xi sugar supermarket has been the second largest supplier of Bingfeng beverages in 2018-2020.

Specifically, during the period from 2018 to 2020, the products purchased by Bingfeng Beverage from Xi sugar supermarket are all white sugar, and the corresponding purchase amounts in each period are about 27.7204 million yuan, 31.1993 million yuan and 20.5564 million yuan, accounting for about 20.29%, 21.61% and 14.04% of the purchase amount of Bingfeng Beverage from the top five suppliers in the current period. During the reporting period, the proportion of white sugar purchased by Bingfeng Beverage from Xi sugar supermarket was 84.61%, 91.18% and 77.2% of similar transactions, respectively.

Xi Sugar Supermarket was established on August 20, 2010, with a registered capital of 4 million yuan, the main business is the wholesale and retail of white sugar, The wholesale and retail of Various Famous Tobacco and Liquor such as Maotai, Wuliangye, Jian Nanchun, Guojiao, Xifeng, etc., and the chain supermarkets of labor insurance, daily chemicals, office supplies, washing supplies, and daily necessities are operated. According to the equity relationship, Xi sugar supermarket is an enterprise with 100% shareholding of Xi'an Sugar and Wine Group Co., Ltd. (hereinafter referred to as "Sugar and Wine Group"). As of the date of signing of the prospectus, Sugar & Liquor Group holds 99% of the shares of Bingfeng Beverage and is the controlling shareholder of the Company. That is to say, Xi Sugar Supermarket and Bingfeng Beverage are "brother" companies.

The reporter also found that Zhang Yanyi held 0.62% of the shares of the sugar and wine group, and Zhang Yanyi, as the legal representative of Xi sugar supermarket, is currently serving as a supervisor of Bingfeng Beverage.

In the view of Xu Xiaoheng, an investment and financing expert, related party transactions are easy to breed the problem of profit transmission, so it is inevitable to be questioned whether the transaction has commercial substance and whether the company's operation is independent, which requires the company's prospectus to disclose details in detail, including specific transaction pricing.

However, Bingfeng Beverage did not pay much attention to the related party transactions with Xi sugar supermarket in the prospectus, which also attracted the attention of regulators. In the initial feedback, the CSRC required Bingfeng Beverage to explain the reasons and necessity of purchasing a higher proportion of the same kind of transactions from related parties xi sugar supermarkets, compared with the fairness of the transaction price of the products purchased from independent third parties, the reasons for not including the above companies in the issuer's body, whether it affected the independence of the issuer, whether it may have a significant adverse impact on production and operation, whether the above-mentioned related party transactions will continue to occur and change the trend in the future, and measures to regulate and reduce related party transactions. There are both recurring related party transactions and occasional related party transactions between Bingfeng Beverage and Xi sugar supermarket, and Bingfeng Beverage needs to explain the distinguishing methods of different types of related party transactions.

In response to the company's IPO related issues, the Beijing Business Daily reporter called the telephone disclosed in the prospectus of Bingfeng Beverage for an interview, and the relevant personnel said that "here is the business department, and the relevant matters are not clear."

The national layout is yet to be examined

Bingfeng soda originated in 1948, a businessman introduced a set of soda manufacturing equipment from Tianjin, and in 1951 built the Northwest Soda Factory, and later merged into the Xi'an Food Factory, which is the predecessor of Bingfeng Beverage. As a long-established brand, Bingfeng Beverage's listing this time also has the consideration of a nationwide layout, but the effectiveness is also unknown.

Why did you choose to go public at this time? Lai Yang, a member of the Expert Committee of the China Chamber of Commerce, told the Beijing Business Daily reporter that do not mistakenly think that the old brands are the original appearance, they have all won and innovated in history with innovation, so they must continue to develop continuously. Therefore, if it can be listed and raised, it will bring great help to the development of the company.

Chinese food industry analyst Zhu Danpeng said in an interview with the Beijing Business Daily reporter that the listing of Bingfeng Beverage is also to enhance its comprehensive strength and anti-risk ability. At present, the cost and cost of nationalization are very high, so Bingfeng Beverage must rely on the blessing of the capital side to be able to have resources and funds for a nationwide layout.

As Zhu Danpeng said, behind the listing of Bingfeng Beverage, there are also ambitions for external expansion. According to the prospectus, Bingfeng Beverage intends to raise 669.1429 million yuan in this listing, which will be invested in three projects: the renovation and expansion project of the glass bottle production line, the upgrading of the marketing service network and the brand construction project, and the information management platform construction project. Among them, the amount of marketing service network upgrade and brand construction project to be invested is 429.8527 million yuan, accounting for more than 60% of the sum of the proposed fundraising.

In terms of marketing service network upgrade and brand construction project, the construction content of Bingfeng Beverage includes three aspects: regional marketing center construction, channel construction and brand building. Bingfeng Beverage said that the implementation of the project is conducive to improving the regional layout, increasing sales terminals, enhancing brand influence, and enhancing the ability to compete with multinational companies, which is a strategic measure for the company to gradually develop from a regional brand to a national brand.

Bingfeng Beverage specifically said that in order to ensure market expansion, the above-mentioned projects chose to build offices in 9 cities (Lanzhou, Chengdu, Chongqing, Beijing, Zhengzhou, Shanghai, Hefei, Wuhan and Guangzhou), of which 8 offices were acquired by way of purchase, and 1 of Chongqing was temporarily leased.

Bingfeng beverages, which want to be nationalized, are mainly limited by the concentration of a corner of the sales area. During the reporting period, the sales revenue of Bingfeng Beverage mainly came from Shaanxi, accounting for 87.44%, 81.73% and 80.23% respectively. Bingfeng Beverage admits that there is a certain risk of concentration in sales areas, which restricts the development of the company's future outward expansion business to a certain extent. If the company cannot effectively develop new markets outside Shaanxi Province and broaden the broader product market area, it will have a certain impact on the company's future growth.

As a regional beverage enterprise, is Bingfeng Beverage "going out" or "sticking to the region"? Zhu Danpeng believes that in the current background, the listing time of Bingfeng Beverage is not ripe. After the entire Chinese beverage enters an internal volume, its future development path is still based on the local, and then to layout the provinces.

Beijing Business Daily reporter Liu Fengru