Xinyang Maojian "hitched" maotai and the "immortal stock" of drinking tea and drinking wine is about to take off?

Beijing News Shell Financial News (reporter Yan Xia) On February 17, the stock price of Xinyang Maojian, a Hong Kong listed company that has been a "fairy stock" for many years, opened sharply, and the intraday increase was more than 30%.

On the news side, Xinyang Maojian issued an announcement yesterday evening saying that it was recommended to change the company's name. Xinyang Maojian intends to revise all the Chinese and English names of the company, of which the Chinese name will be changed from "Xinyang Maojian Group Co., Ltd." to "China Guolong Moutai Group Co., Ltd."

As for the reasons for the name change, the board of directors of Xinyang Maojian believes that "the proposed change of company name will better reflect the current situation of the group's business development and its future development direction." The new name can establish a more appropriate corporate image and identity for the company. ”

According to the official website, Xinyang Maojian was formerly known as China Zenith Chemical Group Co., Ltd. and has diversified businesses. In October 2018, Xinyang Maojian completed the acquisition of Xinyang Maojian International Holdings Co., Ltd., and obtained the exclusive license for the e-commerce sales and overseas distribution rights of Xinyang Maojian Tea, a well-known Chinese tea brand.

Xinyang Maojian said: The company's goal is to promote the popular Xinyang Maojian tea to the world through e-commerce and overseas channels, providing stable returns for the group.

In addition, the listed company also has a thermal power business, construction services, coal-related chemical production business, etc.

It is worth mentioning that Xinyang Maojian not only "drinks tea" but also "drinks wine".

On the evening of February 2, 2021, Xinyang Maojian issued an acquisition announcement. The Board of Directors of Xinyang Maojian announced that the Purchaser (an indirect wholly-owned subsidiary of Xinyang Maojian) entered into an agreement with the Vendor pursuant to which the Purchaser agreed to acquire and the Vendor agreed to sell the share capital for sale for a consideration of HK$80 million.

Upon completion of the acquisition, the target company will become an indirect wholly-owned subsidiary of Xinyang Maojian.

The announcement shows that the target company in this transaction has entered into a cooperation agreement with Shanghai Gaocheng and authorized Shanghai Gaocheng to be the sole partner in the use of the trademark, and jointly holds a sales company with Shanghai Gaocheng, and the target company and Shanghai Gaocheng hold 35% and 65% of the interests of this sales company respectively. In addition, the sales company must provide the target company with 40 million yuan worth of Guotai Jackie Chan liquor as a brand endorsement fee every year.

Xinyang Maojian believes that wine is a consumer staple in China. Since 2015, China's alcohol market has recorded rapid growth of 5% to 7.1% in the past five years. As of the end of 2019, China's alcohol market recorded an annual revenue of 562 billion yuan. It is foreseeable that with the continuous development of China's economy, the liquor market will expand steadily.

In addition, the target company's business partner, Shanghai Gaocheng, is a favorable marketing expert for the Chinese liquor business. Shanghai Gaocheng has launched the promotion of famous liquor brands such as Guizhou Moutai and Wuliangye. On the other hand, the target company owns a series of trademarks, including jackie Chan trademarks (trademark numbers are 9599581 and 11336574).

Therefore, the board of directors of Xinyang Maojian believes that the cooperation between the target company and Shanghai Gaocheng will have an effective synergy effect on the sales of liquor. The integration of Jackie Chan's trademark and liquor will bring synergies to listed companies and can dominate China's huge liquor market.

Xinyang Maojian believes that the acquisition of the target company is consistent with the overall business direction of the listed company, which is a good investment opportunity to strengthen the customer base of the listed company and expand the ability of China's liquor market.

Edited by Xu Chao Proofreader Zhao Lin