Author - Brother who understands wine
Since March 2016, Jinhui Liquor has become the last company to successfully IPO, and there have been no new liquor companies in A-shares for eight consecutive years.
During this period, in April 2023, Zhenjiu Li Du was successfully listed in Hong Kong, opening up a new path for wine companies to go public. However, in A-shares, it is still difficult for wine companies to IPO, and there are still many well-known wine companies in the industry that are trapped on the road to IPO, which is embarrassing.
It is difficult for many well-known wine companies to go public
- Xifeng wine
As early as 1952, Xifeng Liquor was named "China's Famous Liquor", but Kweichow Moutai, Luzhou Laojiao and Shanxi Fenjiu, which are also known as China's four famous liquors, have already landed in the capital market.
When it comes to the IPO of Xifeng Wine, it can be described as a bumpy road. Public information shows that as early as 1999, Xifeng Liquor began to plan to go public. However, it was not until 2009 that the first IPO was ushered in. However, in 2012, Xifeng Liquor was exposed to fraudulent financial performance, and the IPO was forced to be terminated. According to reports at the time, Xifeng liquor sales fraudulently obtained subsidies and falsified finances in 2010, resulting in a huge loss of 420 million yuan that year.
In 2016, Xifeng Liquor planned to go public for the second time, but due to the decline in operating income and net profit in 2014, it was subsequently revealed that financial executives had embezzled bank acceptance bills many times, involving an amount of 58 million yuan, resulting in another failure of the IPO.
In August 2017, Xifeng Liquor updated its prospectus to prepare for the third IPO. However, Zhang Suoxiang, the former general manager of Xifeng Liquor, and Gao Bo, the former deputy general manager, were sentenced for corruption and bribery, and distributors Hao Hailu and Ding Jimin were sentenced for obtaining original shares through bribery. The incident directly led to the collapse of Xifeng Liquor's third IPO.
In May 2018, Xifeng Liquor, which was preparing to be listed for the fourth time, was exposed before the meeting that "Guodian Fengxiang 50 was suspected of exceeding the plasticizer standard", and the product was recalled, and Xifeng Liquor finally had no choice but to withdraw its listing application.
All 4 IPOs failed, and Xifeng Liquor struggled in the capital market. On June 10, 2022, the 2022 Shaanxi Provincial Listed Reserve Enterprise List Press Conference was held in Xi'an, and the meeting released the list of 360 provincial listed reserve enterprises in 2022, and Xifeng Liquor was also among them, which was interpreted by the outside world as a signal that Xifeng Liquor was about to be listed. But to this day, the news about the listing of Xifeng Liquor seems to have sunk into the sea.
- Roushu
As the only soy sauce wine brand among the six golden flowers of Sichuan wine, Langjiu was once hot, but it has always played a role in the road to IPO. In 2011, the revenue of Langjiu Co., Ltd. exceeded 10 billion yuan for the first time, and reached a peak of 12 billion yuan in 2012.
According to public information, as early as 2007, Langjiu launched a listing plan. In 2009, Langjiu was included in the list of the first batch of enterprises to be cultivated by the Sichuan Provincial Financial Office. In 2015, there were rumors in the market that Langjiu had a plan to go public through a backdoor listing. In 2018, Langjiu started the listing process again, and brokerages and accountants entered Langjiu to carry out relevant IPO preparations, but in the end, there was no follow-up.
In August 2019, the official website of the Sichuan Securities Regulatory Bureau announced the "Basic Information Table for the Counseling and Filing of Langjiu Shares", showing that the company name is Sichuan Langjiu Co., Ltd., and the sponsor is GF Securities Co., Ltd. In June 2020, it officially submitted an IPO prospectus to the CSRC. However, its sponsor, GF Securities, was subsequently suspended by the CSRC for 6 months and temporarily suspended from accepting bond underwriting business for 12 months due to violations, which in turn affected Langjiu, which was in the process of IPO.
In May 2021, the China Securities Regulatory Commission (CSRC) provided feedback on the IPO of Langjiu shares. The CSRC requires the sponsor to implement and provide a written response to each of the issues within 30 days, including whether the restructuring is legal, whether it has caused the loss of state-owned assets, whether the operation and management is standardized, and trademark ownership disputes.
In May 2022, the official website of the China Securities Regulatory Commission announced that Sichuan Langjiu became the ninth main board IPO applicant to be terminated in 2022, and the termination of the review was April 28, 2022. Now, the listing plan of Langjiu shares has been put on hold.
- 剑南春
Jian Nanchun, who was once known as the "Mao Five Swords" with Moutai and Wuliangye, is now being thrown farther and farther away by "Mao" and "Wu". In fact, Jiannanchun's revenue is in a leading position among unlisted wine companies, and public information shows that Jiannanchun's revenue will exceed 20 billion in 2021, and its revenue will decline to about 15.4 billion in 2022, but its sales will still rank among the top eight in China. The annual sales of its core large single product "Crystal Jian Nanchun" exceeded 15 billion yuan, and the sales of single products were only lower than that of Feitian Moutai and Wuliangye Puwu.
However, Jian Nanchun's road to listing was also very bumpy. In 2002, due to equity and debt disputes, Jian Nanchun's dream of going public was shattered. In 2008, Qiao Tianming, chairman of Jian Nanchun, was taken on suspicion of bribery, and factors such as the instability of Jian Nanchun's internal asset management led to the collapse of Jian Nanchun's listing plan again. In 2015, Jian Nanchun was sued for a share dispute within the company, and once again missed the opportunity to go public.
- Guizhou liquor
Guizhou Xijiu also favors IPO listings. In 2012, as a subsidiary of Moutai Group, Moutai Group proposed to let Xijiu land on the Hong Kong Stock Exchange. In 2014, the State-owned Assets Supervision and Administration Commission of Guizhou Province stated that it would continue to maintain Moutai's controlling position in Xijiu, and take the opportunity to introduce multiple strategic investors to promote the listing of Xijiu by the end of 2014.
After 2017, Moutai Group and Xijiu have proposed several times that they will complete the listing of Xijiu in 2019 or 2020. However, due to problems such as competition with Moutai, the listing of Xijiu has not progressed for a long time. In 2019, due to the relevant regulations of the China Securities Regulatory Commission, the same group cannot have two listed companies, and Xijiu's listing plan was forced to be terminated.
In June 2022, Xijiu withdrew from the list of shareholders of Moutai Finance Company. In July of the same year, Moutai Group transferred its 82% stake in Kweichow Moutai Distillery (Group) Xijiu Co., Ltd. to the Guizhou Provincial State-owned Assets Supervision and Administration Commission free of charge.
The IPO of wine companies was blocked
In addition to the above-mentioned well-known liquor companies, Jinsha Liquor under China Resources, Yujiu well-known liquor companies on credit, Jingzhi and other liquor companies, which were once boiling with listing plans, have now disappeared.
As the "main battlefield" of corporate IPOs, A-shares do not seem to be friendly to wine companies in recent years. On December 30, 2022, the Shenzhen Stock Exchange issued a notice on the "Interim Provisions on the Application and Recommendation of Enterprises Issuing and Listing on the Growth Enterprise Market of the Shenzhen Stock Exchange (Revised in 2022)", stipulating that the wine, beverage and refined tea manufacturing industries do not support their application for issuance and listing on the Growth Enterprise Market in principle.
On February 1, 2023, the China Securities Regulatory Commission (CSRC) announced the full implementation of the registration-based stock issuance system. At the same time, it is reported that liquor will be included in the A-share restricted industry.
According to media reports, the China Securities Regulatory Commission has seven restrictions, five of which prohibit IPOs in specific industries, including liquor: "The following companies will not be accepted if they apply for listing and meet one of the following conditions: engaging in industries that are expressly prohibited from listing by the policy, such as academic training, liquor, finance, funeral, religion, etc." ”
According to media reports, some investment bankers confirmed that they had indeed received relevant guidance, and the content was basically the same as that spread on the Internet, "(The review standards) have been moderately relaxed, and leading enterprises in restricted industries can also be guided to declare." ”
Industry insiders believe that "the difficulty of listing liquor lies in the fact that as a consumer product for people's livelihood, it is related to the quality of people's life and social consumption atmosphere, so the attention of liquor is relatively high; Secondly, liquor does have the problem of excessive capitalization bringing bubbles and damaging the normal order of the liquor industry, which needs to be rectified. ”
In this context, liquor companies represented by Zhenjiu Lidu Group that are about to switch to Hong Kong stocks or are preparing to switch to Hong Kong stocks may be "forced". On April 27, 2023, Zhenjiu Li Du was officially listed on the main board of the Hong Kong Stock Exchange with the stock code 6979.HK. HK has become the first liquor stock in Hong Kong and the only company successfully listed in the liquor industry in the past 7 years.
But switching to Hong Kong stocks or the United States is not easy. According to the Trial Measures for the Administration of Overseas Issuance and Listing of Securities by Domestic Enterprises, from 31 March 2023, both direct and indirect overseas issuance and listing of domestic enterprises will be subject to filing supervision. Among them, indirect issuance and listing, i.e., "an enterprise whose main business activities are in China, in the name of an enterprise registered overseas, is issued and listed overseas based on the equity, assets, earnings or other similar rights and interests of a domestic enterprise", which is commonly known as a "red-chip listing", also needs to apply for filing in accordance with the New Regulations. Industry insiders believe that although Hong Kong stocks may become a new choice for wine companies, in the actual operation process, wine companies are also facing many challenges on the road to listing on Hong Kong stocks.
How to alleviate the difficulties of wine companies' IPOs? Who will be the next listing seat? We'll see.