China Business Daily (Reporter Zhou Ziyi text/picture) The long-circulating rumors of Junlebao's listing have finally been confirmed, and Junlebao has officially entered the listing counseling stage. As an industry leader, is Junlebao ripe to start listing at this time, and what impact will it have on the dairy industry if it is successful?
Dairy showcase.
Officially entered the listing counseling stage
On December 28, the website of the Hebei Securities Regulatory Bureau disclosed the "Report on the Initial Public Offering and Listing Guidance and Filing of Junlebao Dairy Group Co., Ltd." by CICC, which means that Junlebao has officially launched the A-share listing process. According to the announcement, Junlebao's listing counseling institution is China International Capital Corporation Limited, and the agreement is signed on December 22, 2023.
On December 29, Junlebao confirmed the news to a reporter from China Business Daily, and said that the completion of the shareholding system reform and the application for counseling and filing are necessary steps for the company's capital market strategy to promote. Through counseling, the company's governance level and management quality will be further improved, and the future development of Junlebao will be escorted.
It is understood that as early as 2019, when Junlebao broke away from Mengniu, the market reported that it intended to go public. In March 2020, Junlebao added 4 new shareholders, of which 2 are from Hillhouse Capital and Sequoia Capital, and 1 has a background in central enterprises and Hebei Provincial Construction Investment.
Recently, Tianyancha shows that Junlebao has undergone a number of industrial and commercial changes, such as the company name changed from Junlebao Dairy Group Co., Ltd. to Junlebao Dairy Group Co., Ltd., the registered capital increased from about 62.216 million yuan to 720 million yuan, and the business scope added the production of formula food for special medical purposes.
An investor in the consumer goods industry, Yu Mengjia (pseudonym), told a reporter from China Business Daily that since the investor became the owner, Junlebao has always had the demand for listing, and the listing at this time may be due to some financial problems that have not been dealt with before. Wang Ziheng, a dairy analyst and COO of Zhongbei Blue Ocean FMCG brand marketing planning agency, told a reporter from China Business Daily that the current domestic brands are highly sought after, and Junlebao is ripe for listing at this time.
Dairy showcase.
What can the listing bring to Junlebao
Founded in 1995, Junlebao has created a good record in its development and has created a number of star products, including low-temperature yogurt brand Jane Melt and high-end fresh milk brand Yuexianhuo.
What can the listing bring to Junlebao?
Song Liang, a dairy analyst, told China Business Daily that through listing and financing, Junlebao can accelerate the construction of the enterprise industrial chain system, strengthen technical reserves and innovation, and accelerate the construction of a digital marketing system and a modern enterprise management system.
Yu Mengjia also said that Junlebao has developed rapidly in recent years, and the biggest uncertainty in its development is the high leverage ratio, and the listing financing can help Junlebao reduce the leverage ratio, further complete capital integration, and achieve scale and profit expansion.
It is understood that Junlebao has been making continuous moves in mergers and acquisitions over the years. In January 2022, Junlebao spent 200 million yuan to acquire 20% of the shares of Yunnan Lysil Dairy and 20% of Yunnan Lysil Intelligent Dairy, and in August of the same year, Junlebao signed a "Strategic Cooperation Agreement" with Yinqiao Dairy.
In May 2023, Junlebao increased the capital of Yunnan Lysil Dairy and Yunnan Lysil Intelligent Dairy and became its controlling shareholder, in July 2023, Junlebao increased the capital of Yinqiao Dairy and became its controlling shareholder, and in November 2023, Junlebao announced that it will strategically invest in Mo Yogurt.
Liu Chang, head of the large consumption group of Huafu Securities, told China Business Daily that in recent years, Junlebao has continuously improved the construction of the supply chain system, and listing financing can better help Junlebao achieve integration and expansion.
The dairy industry landscape is changing
Dairy showcase.
Looking at the entire dairy industry, the competition between the leading companies is becoming increasingly fierce, can Junlebao's listing stir up the industry pattern?
Song Liang said that Junlebao is a leading dairy enterprise second only to Yili and Mengniu, and is in the first echelon of the dairy industry. At present, there are few dairy companies in the A-share market, and the listing of Junlebao may improve the voice of dairy companies in the A-share market to a certain extent. In addition, given that Junlebao has been committed to the construction of the industrial chain and the construction of the supply chain in recent years, its listing may promote the quality and efficiency of the industry.
Yu Mengjia believes that in terms of revenue, profit and other indicators, Junlebao and Feihe are equal, second to Yili and Mengniu. However, Feihe's business is mainly based on milk powder, which is relatively single, while Junlebao has a relatively complete category. If Junlebao is successfully listed, it will further enhance its own advantages and accelerate the integration of the industry.
Liu Chang believes that Junlebao has always been willing to go public, and has previously considered whether to impact A-shares or Hong Kong stocks. At present, the competition in the dairy market is becoming more and more fierce, and the industry pattern has changed greatly compared with previous years. He said that Junlebao has developed relatively steadily in recent years, and if it is successfully listed, it may be able to stir up the industry pattern to a certain extent and approach the duopoly.
From the perspective of the main categories of milk powder in the dairy industry, Wang Ziheng believes that Feihe, Yili and Junlebao are the three leading companies in the milk powder industry, while Feihe and Yili are listed companies, and the listing of Junlebao can enhance its competitive advantage and better adapt to the changes in the development environment of the industry.