The 400-year-old brand Zhang Xiaoquan (301055. SZ) has a crisis.
According to the annual report, in 2023, Zhang Xiaoquan will achieve operating income of more than 800 million yuan, a slight decrease year-on-year; The net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") was about 25 million yuan, a year-on-year decrease of nearly 40%.
In the summer of 2022, a brand crisis of "slapping garlic and breaking knives" fermented, causing the market to worry about the quality of time-honored brand knives. And from 2022, the company's net profit has dropped sharply one after another, and as of 2023, it will decrease by 54 million yuan in two years. In the first quarter of this year, the company's net profit fell again. Related to this, the company's selling expenses are constantly increasing.
In the secondary market, Zhang Xiaoquan was also abandoned by capital. The Yangtze River Business Daily reporter combed and found that at the beginning of the listing, Zhang Xiaoquan's share price once reached 38.66 yuan / share, and on May 10 this year, the closing price was 14.15 yuan / share, a decline of more than 60%
Zhang Xiaoquan is a family business, and the Zhang Guobiao family controls Zhang Xiaoquan through the Zhang Xiaoquan Group. At present, the pledge rate of the company's shares held by Zhang Xiaoquan Group is as high as 99.9%.
On the evening of May 10, Zhang Xiaoquan disclosed that because of a dispute over a loan contract, the two actual controllers, Zhang Guobiao and Zhang Zhangsheng, were listed as persons subject to execution by the Intermediate People's Court of Xianyang City, Shaanxi Province, and were restricted from high consumption by the court.
How does Zhang Xiaoquan's business break through? What is the financial pressure of the actual controller?
After slapping the garlic and breaking the knife, the performance changed face
Zhang Xiaoquan's profitability continued to decline.
According to the annual report, in 2023, Zhang Xiaoquan will achieve an operating income of 811 million yuan, a year-on-year decrease of 1.82%, which is not a big decline. However, the corresponding net profit was 25.1183 million yuan, a year-on-year decrease of 39.48%. The net profit after deducting non-recurring gains and losses (hereinafter referred to as "deducting non-net profit") was 20.2666 million yuan, a year-on-year decrease of 42.69%. The decline in net profit and non-net profit was much higher than the decline in operating income.
In 2022, Zhang Xiaoquan's operating performance has shown fatigue. In that year, the company's operating income was 827 million yuan, a year-on-year increase of 8.75%; The net profit and non-net profit were 41.5075 million yuan and 35.3615 million yuan respectively, down 47.28% and 51.04% year-on-year.
Zhang Xiaoquan was listed through IPO on September 6, 2021, and from 2019 to 2021, the company's operating income was 484 million yuan, 572 million yuan, and 760 million yuan respectively, a year-on-year increase of 18.03%, 18.23%, and 32.81%, and the operating income showed rapid growth, and it will change its face in 2022 and 2023. In the past three years, the company's net profit was 72.3007 million yuan, 77.216 million yuan and 78.7328 million yuan respectively, a year-on-year increase of 65.04%, 6.80% and 1.96%, although the year-on-year growth rate slowed down year by year, but still maintained a growth trend.
Why has Zhang Xiaoquan's business performance changed since 2022?
This is not unrelated to the turmoil of "slapping garlic and breaking knives". In July 2022, a consumer broke the news that he used Zhang Xiaoquan's knife to shoot garlic, but the garlic was not shot well, but the knife broke. Subsequently, Zhang Xiaoquan responded that consumers used the wrong method, and the knife produced by the company could not shoot garlic. As a result, Zhang Xiaoquan triggered a crisis of public opinion.
Zhang Xiaoquan also admitted that the crisis of public opinion has had a certain impact on the company's brand. In the 2023 annual report, Zhang Xiaoquan said that in 2023, the domestic macro economy as a whole will show a weak recovery trend, and consumption growth will be less than expected, especially in the second and third quarters. In this macro context, and at the same time, affected by the aftermath of the brand public opinion incident in the previous year, the company's overall performance in the first three quarters declined significantly compared with the same period last year. The company actively adjusted its business deployment, strengthened the orderly progress of various operation and management work, and gradually rebounded with the recovery of the consumer market in the fourth quarter.
However, in the first quarter of this year, the company's performance is still declining slightly. The company's operating income was 213 million yuan, a year-on-year increase of 11.38%; The net profit and non-net profit were 7.6622 million yuan and 6.8664 million yuan respectively, down 9.58% and 11.46% year-on-year.
A reporter from the Yangtze River Business Daily found that in the past two years, Zhang Xiaoquan's sales expenses have continued to grow. In 2021, the company's sales expenses were 117 million yuan, which increased to 146 million yuan in 2022, a year-on-year increase of 24.79%, which was significantly higher than the growth rate of operating income in the current period. In 2023, the operating income will decrease, but the sales expenses will increase instead of decreasing, which will be 148 million yuan.
Among Zhang Xiaoquan's sales expenses, brand promotion expenses, marketing expenses and sales service fees can be combined into advertising expenses. In 2022, the above three expenses will total 91.0737 million yuan, accounting for 62.29% of sales expenses.
The stock price fell by more than 60%, and the major shareholders pledged 99.9%
Zhang Xiaoquan's operating performance has been declining, and the financial pressure on his major shareholders has been increasing.
Zhang Xiaoquan is a family business. Hangzhou Zhang Xiaoquan Group Co., Ltd. (hereinafter referred to as "Zhang Xiaoquan Group"), the controlling shareholder of the Company, and Hangzhou Rongquan Investment Partnership (Limited Partnership) (hereinafter referred to as "Rongquan Investment"), a shareholder holding more than 5% of the shares, are enterprises controlled by the actual controller of the Company. Zhang Xincheng, the actual controller, holds 45.75% of the partnership share of Zhenquan Investment. Zhang Mulan is the immediate family member of the actual controller of the company.
The actual controllers of the company are Zhang Guobiao, Zhang Zhangsheng and Zhang Xincheng, Zhang Zhangsheng currently serves as the chairman of Zhang Xiaoquan, and Zhang Xincheng serves as a director. Public information shows that Zhang Guobiao and Zhang Zhangsheng are brothers, and Zhang Guobiao and Zhang Xincheng are father and son.
From the perspective of equity structure, Zhang Guobiao and Zhang Zhangsheng hold a total of 100% of the shares of Fuchun Holding Group, Fuchun Holding Group holds 100% of the shares of Hangzhou Fuquan Investment Co., Ltd., Hangzhou Fuquan Investment Co., Ltd. holds 99.9981% of the shares of Zhang Xiaoquan Group, and the rest is held by the labor union of Zhang Xiaoquan Group. Zhang Xiaoquan Group holds 48.72% of Zhang Xiaoquan's shares. In addition, Zhang Xincheng also controls a total of 10.35% of Zhang Xiaoquan's equity through Rongquan Investment.
On the evening of May 10, Zhang Xiaoquan announced that on July 12, 2023, Wangying IOT (Yangling) Supply Chain Co., Ltd. (hereinafter referred to as "Wangying IOT Yangling Company") with Zhang Guobiao and others had an equity relationship with the bank to borrow 300 million yuan from the bank due to the construction of the project, and Fuchun Holding Group, Wangying IOT Holding Group, Zhang Guobiao, Zhang Zhangsheng and other parties provided joint and several liability guarantees.
On May 8 this year, due to the failure of Yangling Company to repay the principal and interest in a timely manner, the bank applied to the court for enforcement, and Fuchun Holding Group, Wanglian Holding Group, Yangling Company, Zhang Guobiao, Zhang Zhangsheng, etc. were listed as the persons subject to execution, with an amount of about 298 million yuan, and at the same time, the court issued a "Consumption Restriction Order" to Zhang Guobiao and Zhang Zhangsheng.
At present, Zhang Xiaoquan's shares held by Zhang Xiaoquan Group are still in the lock-up period, and 99.90% of these shares have been pledged.
According to the first quarter report of this year, 49.46% of Zhang Xiaoquan's shares held by Rongquan Investment were also pledged.
Zhang Xiaoquan's stock price fell sharply. On September 6, 2021, the first day of listing, Zhang Xiaoquan's intraday share price reached 38.66 yuan / share, and the closing price on May 10 this year was 14.15 yuan / share, a decline of 63.40%.
Changjiang Business Daily