Source| Haixishangjie
The author | Ohour
The largest durian distributor and the second largest fresh fruit distributor in China, Hongjiu Fruit, were officially listed.
On August 29, with the completion of the IPO placement of Hongjiu Fruit (06689) in Hong Kong, the company officially stood out as China's "first fruit stock" and was officially listed on the main board of the Hong Kong Stock Exchange on September 5.
On the first day of listing, Hongjiu Fruit opened at HK$40, an intraday increase of as much as 3%, with the highest market value of HK$19 billion.
On the trillion-level fresh fruit track, the Nanbaiguo, Beixianfeng and Xihong Jiusan have always been in a top pattern, and now Xihong Jiujie has landed first.
Hong Jiu Guopin: A counterattack of a Chongqing "stick"
About Deng Hongjiu, a man who has gone from a stick to a fruit king, a person who has always seized opportunities and met challenges.
In the early years, Deng Hongjiu was one of the sticks, selling fruits for a living. In 1987, after earning the first pot of gold through wholesale red oranges, he began to start a fruit wholesale business.
In 2002, he and his wife Jiang Zongying established Chongqing Hongjiu Fruit Co., Ltd. Three years later, a news that 15 kinds of Taiwanese fruits will be subject to zero import tariffs has set its sights on imported fruits. For the first time, it cooperated with a Taiwanese company to transport 4.4 tons of fruit into the Chongqing market, and it was a great success in opening its name in the market.
Purchased from the primary market, suffering from high prices and the risk of shortage, in 2011 Deng Hongjiu began to lay out the origin and establish a bilateral market.
In the new retail concept proposed by Alibaba in 2016, Deng Hongjiu once again seized the opportunity to enter the supply chain of Hema Fresh and Suning Xiaodian, and set up a front-end warehouse, completing the whole industrial chain layout of base- processing and production- warehousing- sales sorting- logistics- end customers.
Entrepreneurship for 20 years, step by step counterattack, from earning 100 yuan to income of 10 billion yuan, from unknown small wholesale to covering more than 300 cities across the country, today, Hongjiu Fruit products officially landed on the Hong Kong Stock Exchange, creating the first fruit IPO.
Revenue of 10 billion, the capital chain is still tight
Betting on the fruit category is the main reason for the growth of Hongjiu's sales.
At present, Hongjiu has formed a relatively complete fruit product portfolio, covering 49 kinds of high-end fruit categories with durian, mangosteen, longan, dragon fruit, cherry and grape as the core.
From 2019 to 2021, Hongjiu Fruit achieved revenue of 2.078 billion yuan, 5.771 billion yuan and 10.280 billion yuan respectively, reaching a compound growth rate of 122.42%; Adjusted net profit was 228 million yuan, 662 million yuan and 1.090 billion yuan, with a compound annual growth rate of 118.48%.
However, from the perspective of gross profit margin, the gross profit of Hongjiu from 2019 to 2021 was 393 million yuan, 957 million yuan and 1.613 billion yuan, respectively; Gross profit margins were 18.9%, 16.6% and 15.7%, respectively, and continued to decline for three years.
Some experts said: "The continuous decline in gross profit margin is mainly due to the stimulation of sales of Hongjiu fruit products through marketing, price reduction and other forms."
In addition, it should not be overlooked that although Hongjiu Fruit's revenue has grown rapidly, funds are still tight and almost rely on borrowing to maintain operations. As of March this year, the Company had to repay a total of $1,489 million in bank loans in one year, compared with approximately $444 million in cash and cash equivalents during the same period.
The first share of fruit, how to lead the trillion market?
China is the world's largest fruit consumer.
According to the data, the scale of the mainland fresh fruit retail market has increased to 1.34 trillion yuan in 2021, with consumption upgrading and further market integration and optimization, the market is expected to continue to expand at a compound annual growth rate of 9.2% in the next 5 years, reaching 2 trillion yuan in 2026.
Thanks to the trend of consumption upgrading, as well as the strong capabilities of product differentiation brand strategy, end-to-end supply chain and digital supply chain management system, Hongjiu Fruit is growing rapidly and is expected to seize new opportunities for development in the high growth of the market.
In terms of the use of investment funds, Hong JiuGuo said that it intends to use the amount of funds raised in this IPO to improve the fruit supply chain, fruit brand building and product promotion, digital system upgrading and global fruit industry Internet platform development and other projects, and another part is used to repay bank loans.
It is believed that the successful listing of Hongjiu fruit products, its deep cultivation and construction at the supply chain end has great strategic significance for medium- and long-term development, and will also give proofs to other players in the market and let the Chinese fruit market enter a new stage.
(The picture in the article comes from the prospectus and network of Hongjiu Fruit)