75-year-old Lin Pingtao missed the golden period and staged family infighting, Jialong shares stuck to the chicken essence market and urgently needed to break through

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Wang Jing

A-share listed companies have "seized power and civil strife" again, and the protagonist this time is the veteran condiment listed company Jialong Co., Ltd. (002495. SZ）。

On the evening of July 3, Jialong shares disclosed that Lin Pingtao, chairman and actual controller of the company, proposed to remove Lin Changhao from his position as a director of the company and replace it with Lin Changchun.

Jialong shares is a typical family business, Lin Changhao and Lin Changchun are the third and second sons of Lin Pingtao respectively.

On April 18 this year, the directors of Jialong Co., Ltd. had just completed the re-election, and Lin Changhao was elected as a non-independent director of the company with a high vote. Lin Pingtao suddenly repented at this time, why? According to media reports, insiders of Jialong said that this is an internal matter of their family, and the company is not clear.

Jialong shares in 2010 on the A-shares, Lin Pingtao operation is quite conservative, listed for 14 years, Jialong shares have never been re-raised, the asset-liability ratio has remained low.

However, the overly conservative Jialong shares missed the golden period of development. The consumer market is changing, and seasoning products are emerging in an endless stream, but Jialong shares still rely on chicken powder and chicken essence products for more than 70% of its revenue. In recent years, the company's performance has been declining and falling into losses.

At the time of family infighting, the operation of Jialong shares urgently needs to break through.

Sudden Family Naito

Lin Pingtao's life is a life that grows with the times.

Born in 1949 in Puning, Guangdong Province, Lin Pingtao studied food industry technology at Shantou Cannery and Industrial School as a teenager, and has been involved in food for a lifetime. He was hardworking and capable, and after many twists and turns, he finally built his own fruit processing factory in 1984 and started his own road from scratch.

In the 90s of the last century, the eldest son Lin Changqing accidentally noticed the chicken powder seasoning from abroad, which was sold at a high price. Lin Pingtao immediately saw the business opportunity, in 1993, he led the team to develop China's first barrel of chicken powder seasoning, since then, Jialong began to enter the field of condiments from the field of canned food.

In 2002, Jialong completed the shareholding system transformation, and Jialong shares were formally established. In 2010, Jialong shares were listed on the Shenzhen Stock Exchange, raising more than 800 million yuan.

It is worth mentioning that in addition to the actual IPO raising 832 million yuan, after the listing, Jialong shares did not raise funds. As of the end of the first quarter of 2024, the company's debt-to-asset ratio was only 3.13%.

Lin Pingtao once said: "Industry is the foundation. He is well aware of the bloody wind of the capital market, in the face of temptation, he sticks to the industry, Jialong shares did not expand aggressively, playing the "capital game".

Lin Pingtao is determined to "be a century-old enterprise and create a national brand". Around 2020, Jialong Co., Ltd. has become the No. 1 national brand in the national chicken powder industry. Lin Pingtao's three sons also entered the company early.

As early as when Jialong shares were listed, Lin Pingtao's youngest son Lin Changhao served as a director, deputy general manager and production director, the eldest son Lin Changqing served as the chairman of the company's board of supervisors, the second son Lin Changchun served as the company's director and general manager, and his wife Xu Qiaochan served as the company's vice chairman. In 2015, Lin Changchun chose to step down and "start his own business".

Judging from his position and shareholdings, Lin Pingtao seems to value his youngest son more. On April 18 this year, the board of directors of Jialong Co., Ltd. was re-elected, and Lin Pingtao, Xu Qiaochan, and Lin Changhao were all elected as non-independent director candidates.

As of the end of the first quarter of 2024, Lin Pingtao and Xu Qiaochan held 160 million shares and 56,938,500 shares of the company respectively, making them the company's first and third largest shareholders. Lin Changhao holds 78,194,300 shares, making him the second largest shareholder of the company, Lin Changchun holds 17,548,500 shares, making him the fifth largest shareholder, and Lin Changqing holds 45,052,500 shares, making him the fourth largest shareholder.

However, in less than three months, Lin Pingtao regretted it. On the evening of July 3, Jialong shares disclosed that Lin Pingtao, chairman and actual controller of the company, proposed to remove Lin Changhao from his position as a director of the company and replace it with Lin Changchun. Xu Qiaochan chose to abstain from voting.

This year, Lin Pingtao is 75 years old, and his youngest son Lin Changhao is also 47 years old. Why did the father and son suddenly have a rift?

Stuck in a bottleneck of development

Whether the Lin Pingtao family is staging an infighting drama is still in speculation, and it is a definite reality that Jialong shares are in business difficulties.

In the year of listing, that is, in 2010, Jialong shares achieved operating income of 271 million yuan, a year-on-year increase of 15.51%; The net profit was 57.8545 million yuan, a year-on-year increase of 1.34%. Since then, the company's performance has fluctuated, with the highest revenue of 334 million yuan in 2015 and the highest net profit of 58.3235 million yuan in 2011. In 2021, the net profit of Jialong shares will only be 26.7162 million yuan, which is not as good as the level when it was first listed.

In the past two years, Jialong shares have suffered continuous losses. In 2022 and 2023, the company's operating income will be 208 million yuan and 260 million yuan respectively, a year-on-year change of -25.80% and 25.13% respectively; The net profit was -54.7698 million yuan and -44.7147 million yuan respectively.

In the first quarter of 2024, Jialong Co., Ltd. achieved operating income of 54.7541 million yuan, a year-on-year decrease of 19.81%; The net profit was 1.9657 million yuan, a year-on-year increase of 226.87%.

Why did Jialong shares, which were listed early, fall into today's business situation?

Conservatively missing the golden period of development is an important reason. Until 2023, Jialong's revenue from chicken powder and chicken essence will still account for 54.86% and 20.42% respectively.

However, in the chicken powder and chicken essence condiment market, Nestle's Totole firmly occupies nearly half of the country, and among the domestic brands, the popularity and market share of Daqiao and Guosha are not low. Nowadays, with the emergence of seasoning products, chicken essence has been recognized as a "sunset industry", and Totole has already developed non-refined products such as soy sauce, oyster sauce, recipe-style seasoning, and fresh chicken juice as the second pillar of the brand.

Although the main brands of Jialong Co., Ltd. include "Jialong", "Fuwei", "Hong Kong Kitchen", "Mrs. Kitchen", "Jiafeng" and "Lion Ball", etc., they are not well-known compared with the above brands.

In addition to the lack of category innovation, the aging of Jialong's publicity and sales channels is also a major problem. According to the annual report, the company's current sales model adopts a distribution model, and the products are sold to the terminal market with the help of dealer resources. In the era of e-commerce, its main sales channel is still offline.

Jialong shares also tried to make a breakthrough. In 2023, Jialong Co., Ltd. suddenly said on the investor interactive platform that the company's prefabricated food business is in the stage of exploration and layout. In the 2023 annual report, Jialong disclosed that the company currently has a prefabricated vegetable workshop renovation project, and has launched new products such as mustard sauce and tomato brisket.

However, in the track of prefabricated dishes, a number of companies have been "rolled" in full swing, and more advantageous listed companies such as Anjing and Guolian Aquatic Products have entered the game.