The "Chinese stock god" was disillusioned, and the retail investors cried at a loss

Sharp eyes on finance

2024-04-28 16:46Posted on the official account of Beijing Ruiyan Finance

In the past few years, with the collective collapse of fund group stocks, various so-called long-term value investment stocks that have been praised to the altar have fallen to the point where the longer they are held, the more they lose. The fund managers who participated in the group have revealed their true forms, from being sought after by everyone to shouting and beating.

fell by 600 billion, and the valuation is still very expensive

Large consumption is the key area of the fund, and the market value loss of some consumer stock leaders in recent years can be described as extremely tragic.

The most typical is that Haitian Flavor Industry has fallen from more than 700 billion to less than 200 billion at one time, and has evaporated more than 500 billion.

Haitian Flavor is one of the companies that participated in the most public offerings, and its catastrophic crisis public relations ability after being caught in the food additives scandal has become the target of public criticism. Various articles about how the market value of Haitian Flavor Industry has fallen have also come one after another, so when it comes to the collapse of consumer stocks, the first thing that comes to people's mind is Haitian Flavor Industry.

In fact, there is a well-known consumer stock that has evaporated more than the market value of Haitian Flavor and fallen even worse, that is, the "king of grain and oil" Arowana.

There are data comparisons to prove this:

Haitian Flavor peaked on January 8, 2021, with the highest share price of 126.2 yuan. At the beginning of January this year, it fell to 33.02 yuan, evaporating 518.1 billion yuan, a decrease of 73.83%.

Arowana peaked on January 11, 2021, only one trading day later than Haitian Flavor. The highest share price was 145.36 yuan, which fell to 27.90 yuan in early February this year, evaporating 636.8 billion yuan, a decrease of 80.8%.

The "Chinese stock god" was disillusioned, and the retail investors cried at a loss

At its peak, the market value of Arowana was nearly 800 billion, but after plummeting by 80% to a market value of more than 100 billion, the valuation of Arowana was much more expensive than Haitian Flavor:

At present, the dynamic price-earnings ratio of Haitian Flavor Industry is 28 times, and the Arowana is as high as 57 times, which is twice as expensive as Haitian Flavor!

A traditional food processing industry can no longer be a traditional one, with a price-earnings ratio of nearly 60 times, such Arowana, I am afraid there will be a fall.

The fund is crazy to rob, and the "Chinese stock god" is extremely optimistic

Arowana was listed in October 2020, which was a big bull market for consumer stocks, and was sought after by countless funds. Therefore, Arowana soared by 119% on the first day of listing, which stunned a lot of A-share melon-eating people.

More shocking is yet to come. After the listing, there were two waves of obvious surges in Arowana, especially the second wave of doubling from 70 yuan in less than a month to more than 140 yuan, which completely pushed the company to the altar.

The popularity of Arowana's stock price at the time of its initial listing was inseparable from the collective speculation of institutions. Before the listing, more than 170 funds participated in the IPO. At the end of 2020, there were more than 2,000 funds holding Arowana, accounting for 5.7% of the outstanding shares.

Among the institutions and large households involved in Arowana, the most famous is Lin Yuan, the "folk stock god". Lin Yuan Investment has 26 funds that have won the lottery of Arowana, with an allocation amount of 12.66 million yuan. After Lin Yuan was listed in October 2020, his two products were among the top ten shareholders of Arowana in terms of outstanding shares, and in the first quarter of 2021, it increased to four products.

Specifically, in the fourth quarter of 2020, Lin Yuan's No. 12 and No. 158 private equity funds bought 1,370,800 shares and 1,151,500 shares respectively, becoming the top ten circulating shareholders.

In the first quarter of 2021, Lin Yuan's No. 166 private equity fund bought 1,332,100 shares and No. 24 private equity fund bought 949,600 shares, becoming the new top ten circulating shareholders.

Lin Yuan has a famous saying "Don't be afraid of heights, being afraid of heights is a hard-working person", in actual operation, he is really a high position.

After a lot of hype at the end of 2020, Arowana quickly peaked in early January 2021 and quickly halved in April.

2021 is actually the first year of the comprehensive collapse of fund group stocks, and the leading stocks of food and beverage, liquor, medicine, photovoltaic, and lithium battery, all of which are the leading stocks of the fund grouping track, have peaked in this year.

However, Lin Yuan didn't seem to realize that Arowana, a stock that had been speculated, would respond with a long bear journey in the future.

At the beginning of 2022, the net value of Lin Yuan's heavy Arowana products generally fell by more than 20%. For the whole of 2022, Arowana plummeted by 30%.

However, Lin Yuan's company also investigated Arowana as many as 4 times in March, May, August and October of that year.

Arowana is not Moutai, be wary of large-scale lifting of bans

Lin Yuan is known as the "folk stock god", there are countless fans who believe in him and follow him, and there are many retail investors who buy Arowana stocks because of his frequent statements about his optimistic views on Arowana. Lin Yuan's frequent research on Arowana will also make some of his iron fans firmly hold it.

As we all know, Lin Yuan has been very successful in investing in Moutai, and has therefore become a "folk stock god", and the reason why he is optimistic about Arowana is largely due to the path dependence after Moutai's success. Lin Yuan said, "People are nothing more than eating and drinking, and all enterprises related to the mouth are easy to calculate their accounts, so we still tend to choose such a company." ”

It is under this logical inertia that Lin Yuan's products continue to buy Arowana, trying to stage the miracle of investing in Moutai again.

However, although Arowana and Moutai are both food and drink-related enterprises, they are essentially different from each other.

Moutai is a unique company with a unique brand value, with a gross profit margin of more than 90%, a continuous growth in performance for many years, and a leading price in liquor.

The Arowana is mainly based on kitchen products such as edible oil, which is the most basic survival material for people, and the product does not have high-end attributes, which belongs to the natural Red Sea industry, and the gross profit margin is also very low.

Moutai is a luxury attribute, and the product has great room for price increase. The Arowana is a civilian biological resource, and the product is the least likely to increase in price.

So don't look at Arowana's annual revenue of hundreds of billions, but the profit is very low.

On March 23, Arowana (300999. SZ) announced its 2023 financial results. The company's annual revenue was 251.524 billion yuan, down 2.32% year-on-year, net profit attributable to the parent company was 2.848 billion yuan, down 5.43% year-on-year, and net profit after deducting non-profits was 1.321 billion yuan, down 58.5% year-on-year. This is the third consecutive year that Arowana's net profit has declined.

Grain and oil are basic people's biological resources, and the gross profit margin of related companies will not be high. In fact, Arowana's originally low gross profit margin has been declining in the past few years.

From 2020 to 2023, the company's gross profit margin will be 11.01%, 8.18%, 5.68%, and 4.83% respectively.

The net profit margin in the same period was 3.37%, 1.98%, 1.21% and 1.11% respectively, which also fell all the way.

While becoming less and less profitable, the debt pressure of Arowana is also high. In 2023, the company's contract liabilities will increase by more than 32% month-on-month, and the asset-liability ratio will be around 60% all year round. The author compared Haitian Flavor Industry with Arowana above, and the asset-liability ratio has been around 30% for a long time.

At present, Lin Yuan's products have long been withdrawn from the list of the top ten shareholders of Arowana, and the retail investors who followed him to buy Arowana have also "lost to their grandmother's house".

The reason why the author always mentions the "top ten tradable shares" is because the shares of Arowana are now listed and circulated only accounting for about 10% of the total share capital. Of its total share capital of 5.422 billion shares, only 542.6 million shares are outstanding.

About half a year later, on October 16, 2024, Arowana will celebrate its third anniversary of listing, when 4.879 billion restricted shares will be lifted, and they will almost become fully tradable shares after the ban is lifted.

The lifting of the ban on share capital accounts for nearly 900% of the current share capital, and we will wait and see what impact the "flood peak" will have on the stock price.

Some shareholders believe in Lin Yuan very much and worship him as a god, but this time Arowana's Waterloo made Lin Yuan fall off the altar and also made many shareholders sober up.

This event is actually very educational for investors. Investment should have your own independent analysis and thinking, and don't be superstitious about any so-called stock god boss.

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