Out of professional habits, I often go to find a prospectus to read, recently saw a shrimp slippery company is also about to IPO, can't help but have a few questions, in the beginning of the article together with the throw out, the back of the slow talk about it:
● A cash flow business with a revenue of several hundred million yuan and an annual profit of one hundred million yuan, what is the listing chart? Is it bad to make money in a muffled voice?
● Guo's father and son have a very high shareholding ratio, obviously they did not have much to deal with capital before, why did they have the idea of listing at this time?
● Can going public help the prefabricated company defend against risks?
● Can I take the last train from the outlet of the pre-made dish?
● In the long run? Will Xian meilai become a member of the "boss of a listed company with a market value of billions of yuan who chooses to lie flat"?
Founded in 2006, Fresh Mei Lai Food Co., Ltd. (hereinafter referred to as "Fresh Mei Lai") is located in Beihai, Guangxi Province, whose main business is the research and development, production and sales of aquatic products prefabricated dishes, the main products include shrimp slippery and other cooking pre-made dishes, shrimp, sashimi and other i.e. prepared dishes.
Data as of April 18, 2021 Tabulation: Invest in China
In this IPO, Fresh Meilai is preparing to issue 25% of the shares on the main board of the Shanghai Market, and the funds raised will be used for marine food industrialization projects, frozen food sub-packaging refrigeration and logistics distribution projects (Phase II) and supplementary working capital, totaling about 600 million yuan. According to this calculation, it is estimated that the market value of the offering of Fresh Meilai will be about 2.4 billion yuan, and the net profit after deducting non-profit in 2021 will be 72.4795 million yuan, and the price-earnings ratio of the offering will be 33 times.
The tipping point of the outbreak of prepared dishes
Prefabricated dishes refer to agricultural products, livestock, poultry, aquatic products, etc. as raw materials, with a variety of auxiliary materials, pre-processed (such as slitting, stirring, pickling, rolling kneading, molding, seasoning, quick-freezing, freezing) and made of finished or semi-finished dishes, with convenient, fresh, healthy and other characteristics, rich choice of dishes and flexible cooking, eating methods can meet the different needs of different groups of people for ingredients.
Relative to the United States, Japan and other countries, subject to cold chain logistics and quick-freezing technology, the mainland prepared vegetable industry started late, around 2000, in East China, there have been prefabricated vegetable enterprises that produce semi-finished dishes; after 2010, the expansion of the scale of takeaway platforms has led to the demand for standardized supply, along with the progress of related technologies, prefabricated dishes have entered the volume period at the B end; after the outbreak of the epidemic in 2020, the acceptance of C-end prepared dishes has gradually improved, and enterprises have also laid out.
According to the degree of deep processing and ease of eating, prefabricated dishes can be divided into four categories: ready-to-eat, that is, hot, cooking, and matching, and the degree of processing is decreasing in turn, and the representative product of delicious shrimp slip belongs to the cooking pre-made dish, and the treated frozen shrimp, squid ring, etc. belong to the ready-made dish.
According to NCBD data, the sales of the mainland prefabricated vegetable industry increased from 65.03 billion yuan in 2015 to 252.7 billion yuan in 2020, with a five-year compound growth rate of 31%, and the market penetration rate was 10-15%. The overall rapid growth of the track, the occupation of the mind by new brands, and the scale opportunities brought about by the increase in the concentration of the beneficiary industry are the three major opportunities in the prefabricated vegetable industry.
Due to the huge industry prospects, the participants in the generalized prepared vegetable industry are numerous, and there are many raw material companies and catering enterprises that are cross-border into the army, which can be roughly divided into five categories:
First, raw material enterprises, characterized by huge cost advantages, such as Shuanghui development, Longda meat, etc.;
The second is the early establishment of a specific field of prefabricated vegetable enterprises, such as the main shrimp slippery delicious lai, the main frozen surimi Yasui food, etc.;
The third is a specific category of food deep processing enterprises, characterized by early participation, high degree of standardization, strong cold chain transportation capacity, high brand mental share, the main frozen dumplings wan chai wharf, three whole foods, etc. are representatives of such enterprises;
Fourth, there are national catering enterprises with central kitchens, which are characterized by high acceptance of the C-end, such as Haidilao's self-heating pots.
The fifth is to quickly cover new species in specific prefabricated vegetable tracks through capital, such as catching shrimp and Lu Zhengyao's new project tongue tip hero.
Due to the high cost of traffic at the C-end and the increasingly fierce competition, the old prefabricated vegetable companies such as Delicious Lai are still mainly sold through To B or through B-end channels. The prospectus shows that the current delicious sales model is divided into two kinds, the direct sales model is to use shrimp slip as a raw material, sold to wan chai wharf, sipping and feeding such food or chain catering enterprises, usually this kind of cooperation gross profit margin is low, but it belongs to the bottom of the cooperation, easy to control the output.
Due to the continuous growth of the new crown epidemic and online channels, the proportion of supermarket models continues to decline; the trade model refers to professional food supply chain enterprises such as pot circles, as well as regional wholesale and retailers; the distribution model has the highest revenue, accounting for 44.99% of revenue in 2021. It is worth mentioning that in the past three years, Delicious has developed many unincorporated dealers, generally using the model of first payment and later goods, so in addition to the need to prepare a certain amount of inventory will occupy a lot of cash, cash flow has been relatively good.
New species vs old players
Delicious to step on the outlet of pre-made dishes, the performance of these two years is not brilliant, the operating income of 2019/2020/2021 is 9.11, 8.50, 914 million yuan, compared with Anjing Food, Weizhixiang, Haixin Food and other similar listed companies, it can be said that it is too flat; net profit has declined compared with the previous two years, from about 90 million yuan to 81.1077 million yuan in 2021.
In this regard, Delicious to give three reasons, of which the biggest impact is "by the fresh e-commerce, community group buying and other new retail impact, the overall revenue of the supermarket channel decreased by 61.9374 million yuan year-on-year, the gross profit decreased by 17.3569 million yuan", I am actually quite puzzled by this, although the gross profit margin of the fresh supermarket channel is the highest, but the channel decline did not start last year, the company can not be unaware of this.
It can only be understood like this: new species that adapt to the new era of gameplay are better at opening the gap in the wind outlet. How can you break through from established manufacturers such as Yasui and Naomilai? The shrimp catcher, which was only established in 2020, gave an answer, and when it was established less than a year ago, it obtained a strategic investment of 50 million yuan in the pot circle, and the sales amount of shrimp slip single product To B reached 800 million yuan, which was nearly twice the revenue of the delicious shrimp slip category in 2020, and almost caught up with the annual revenue of the delicious shrimp slip.
Delicious has been operating for more than ten years, the core advantages are two points, one is the perfect supply chain system brought by geographical location and experience, and there are modern R&D and production bases in Guangxi Beihai and Zhengzhou, Henan Province; the other is the accumulation of many years, systematic and large-scale sales network, in Shanghai, Guangzhou, Chengdu, Zhengzhou, Wuhan, Xi'an and other central cities set up dozens of branches responsible for sales, downstream customers include Wal-Mart, Yonghui, RT-Mart and other supermarkets, Jingdong, Hema and other e-commerce, new retail platforms, Miss, Food processing enterprises such as Wan Chai Wharf, chain catering and food enterprises such as sipping and feeding, pot rings, and regional traders and distributors.
So I don't think that a newly established brand in 2020 can be compared with delicious in terms of product quality, supply chain and sales channels, and in a non-zero-sum game incremental market, multi-winners are not impossible, the problem is that the experience of an old family business may now become a shackle, and it is somewhat inadequate in the face of the impact of new species.
2019 and 2020 were the two years when prefabricated dishes began to break out, and the R&D expenditure of Delicious Lai was only less than 1 million yuan, accounting for less than 1% of the operating income. In 2021, it is only 1.4854 million yuan, less than 1/40 of Anjing food and less than 1/10 of Haixin food of the same scale.
In addition to veteran opponents such as Yasui Food, Haixin Food, and Haibawang International, it also faces new players who know more about consumers at the product level and brand play. Relying on the products and channels accumulated over the years, the shrimp slip has grown from 380 million yuan in 2019 to 510 million yuan in 2021, and there is little breakthrough in other categories.
Also located in beihai, shrimp catch in the beihai two years to build 88 acres of shrimp slip manufacturing plant, a total of 8 production lines, investment of 10 million yuan to set up shrimp slip R & D center, shrimp slip raw materials according to A1 \ A2 \ A3 grading, to meet the multi-level needs of different groups of people, annual sales of more than 800 million yuan. B and you are C, and do not hesitate to find professional brand consulting companies packaging brands, buy the amount of the establishment of C-end channels, in the Xiaohongshu, Douyin and other social media full bloom.
Many people will say that the short-term sprint ability is not a strong long-distance runner, perfect diary and other new consumer brands have long proved this, but this also shows that the new model and channel dividends are indeed huge, if the face of dividends is still hesitant, can only show that the management in the industry cognitive level is still not very clear, and from the perspective of research and development attention, a year of R & D expenses corresponding to nearly 1 billion yuan of revenue, is obviously too low, in the new product research and development concept, it is impossible to be the same day as the first class.
Last week I went to listen to a communication meeting of Yuanqi Forest, Tang Binsen's product concept on the traditional track of bottled drinks has always been considered to be more effective in combination with the previous Internet business culture, so take a comparison to know why I say that the product concept of delicious is not good.
On the same day, a vice president of Yuanqi Forest introduced in detail the "horse racing system" research and development process of his new products, and the core information was three points, one was that the boss resolutely did not participate in research and development; the second was that the Internet A/B Test method was used in full swing; and the third was that once verified, the omni-channel was immediately rolled out. On the other hand, under the banner of starting from consumer demand, most of the time is spent on internal review, and it is urgent to make progress in new product input, cognition, efficiency and effectiveness.
There are still many problems in cognition like this, the dimension of the entire prospectus industry data is insufficient, and it lacks the display of key data such as the market share of the current shrimp skating track, mentioning the brand advantage is how many awards have been won, the technical advantage is only written in the technical ability of aquatic products to quickly go fishy and fresh, and the management advantage is rich experience and management experience.
Industry analysis is also relatively shallow, such as "comparing the national per capita aquatic consumption with the world data, 11.4KG in 2018, and the difference between the per capita 20.5 kg released by the United Nations is obvious; in 2020, it rose to 38.08 grams per day, which is less than the standard of 50 to 100g per day in the "Dietary Guidelines for Chinese Residents", and finally concluded that the demand for aquatic products has a large space for development. Compared with The Baoli Food I wrote before, this logic is obviously too weak to look at the requirements of the prospectus.
But I can feel that as an investment bank, Everbright Securities has done its best.
A hard wound to a catering family business
Fresh Meilai is a typical family business, as of 2018 has not introduced external capital, after 2018 successively introduced Ningbo Zhengyue, Ningbo Jinxiang Ruifeng, Ningbo Tongyuan Youbo and other shareholders, but the equity proportion did not exceed 4%, until the issuance, chairman Guo Haibin, and his father Guo Dingqi and other relatives held up to 88% of the shares.
In the 27 pieces of feedback on The Offer at the end of March, the CSRC questioned several capital increases around 2019 due to the fact that in the Supplementary Agreement to the Capital Increase Agreement, it made a bet on the performance targets, listing arrangements, exit options and other aspects of The Food Meilai, but signed the Termination Agreement in March 2021 for the above matters. In response, there is currently no VAM agreement with shareholders. But at present, The delicious is only one foot away from the listing, and the details are really reverie.
Of course, I understand that listing has many benefits, the most important thing is to broaden the company's financing channels, so that the shares that are not easy to liquidate are circulated, so that all kinds of reductions, additional issuances, equity pledges become smoother, enhance brand power, credibility, and can be listed is an effective proof of the company's governance level, development prospects, and profitability.
But all this is not without cost, becoming a public company, means in finance, manpower, management, etc., absolute standardization of operation, all of which are a lot of costs, an investor who is known for consumption has said that if a consumer company has a net profit of 50 million yuan, standardized according to the standards of listing, there may be only half of what is left. Moreover, in the past, the power of life and death in the hands of enterprises was suddenly put on the market for public scrutiny, and it was not so easy to adapt.
What's more, for a single large family business, especially the catering enterprises with a high proportion of offline B-end revenue, the market has always been quite vigilant.
The first is that management is difficult to check and balance, and the interests of other shareholders are difficult to protect. The prospectus clearly states that the actual controller may exert influence on major matters such as the issuer's development strategy, capital expenditure, personnel appointment and removal through the exercise of voting rights, so there is a risk that the decision-making will deviate from the best interests of the minority shareholders due to the control position of the actual controller.
For example, since 2018, Fresh Meilai has paid dividends four times, of which 2020 and 2021, which are close to the listing, have paid a large dividend of 30 million yuan, which is obviously too magical for a company that has carried out IPO financing because of "to alleviate the financial pressure in the process of rapid growth of the company", especially in the case of its "cash and cash equivalent increase" in 2020 and 2021 is only 742.18 and 178.44 million yuan.
The second is the associated legal risks. According to the "Public Securities News", in addition to the nested shareholding of the full-time members of the former Securities Regulatory Commission, the IPO accounting firm and the person in charge of the IPO accounting firm and the former member have a deep intersection, there are also cases of holding on behalf of Guo Dingqi, one of the actual controllers of The Delicious, and these enterprises held by others on behalf of Guo Dingqi not only involve The business scope of Thea lai products, but also the address coincides with the newly established branch of the Fresh MeiLai, and the person in charge and the newly established branch of the fresh meilai are the same person.
For the above reasons, such food and beverage consumer enterprises are often difficult to be recognized by institutional investors. For example, at the end of 2021, Yang Guofu intended to use nearly 1.2 billion yuan of revenue to carry out Pre-IPO financing with a valuation of 20 billion yuan, but the price given by the institution surprised Yang Guofu and finally failed to achieve his wishes. And the secondary market institutions for asset allocation or various reasons, each of the doorways are too much, otherwise how can there be like the same family business Weizhixiang, Haixin food, that is like the ECG stock price.
Of course, this is just my perspective from a mediocre investor and media person, listing is ultimately a personal choice of entrepreneurs, and for most companies, it is a good way to resist risks and continue to become bigger and stronger, such as Xibei If it is a listed company, it will not be so bad in the early stage of the outbreak of the epidemic in 2020, although Haidilao closed nearly 300 stores last year, it is still relatively calm, which is also the biggest advantage of listing.
Previously, some media have proposed a phenomenon: a group of listed company owners with a market value of billions of yuan are choosing to lie flat, I say a good word here, I wish that after many years, Delicious will not become a member of these lying flat companies. (Text/Zhang Nan, Source/China Investment Network)