After the close of Hong Kong stocks on July 9, Nongfu Spring (09633) announced that its controlling shareholder, Yangshengtang, plans to increase its holdings of the company's H shares in the open market with its own funds in about six months, with an estimated total amount of no more than HK $2 billion. Nongfu Spring said that Yangshengtang's shareholding increase plan reflects the controlling shareholder's long-term commitment to the company and firm confidence in the company's prospects.
Generally, when the stock price falls, the company takes out real money to increase its holdings, which can not only stabilize the stock price, but also give confidence to long-term holders, and can also be regarded as fulfilling its responsibility to investors. But at a time when the overall stock market is weak, such things are becoming less and less common.
It can be seen from this that why Nongfu Spring has remained immovable after more than 100 days of cyberbullying, which stems from the self-confidence in its bones. Looking back at product management, dealer services, public welfare and other aspects, Nongfu Spring has shown a calm attitude and a responsible behavior for every stakeholder, which may be the reason for its solid fundamentals.
What makes a good business? Don't talk about feelings first, look at the product first
Many companies have a tendency to like "value", and CEOs often gush out great words at press conferences. But in fact, a company can't afford too much, and the most basic or even the only important criterion for a good company is that it can provide good products.
Nongfu Spring has been subjected to cyberbullying for more than three months, but public opinion has turned over and over again, and the discussion has always been about all kinds of unwarranted moral judgments, and even funny and ridiculous chasing after the wind. Even if some people took a magnifying glass to interrogate, they did not find any product quality problems with Nongfu Spring in the end.
Excellent product quality management has a reason to become the material for Nongfu Spring's publicity. In the past, however, we have often seen Nongfu Spring being forced to state their abilities only when they are seriously misunderstood. For example, in 2013, he was forced to disclose his internal control standards that were several times stricter than the national standard.
The same is true of the water source that is a signboard. Many people have been to the factory only to find that it took several years to determine the water source of Nongfu Spring, and there were many rounds of water quality tracking and monitoring of as many as 171 items. It's so cumbersome, just to make a bottle of water for 2 yuan.
In fact, even Nongfu Spring's water intake method can become a technical patent and a barrier, not to mention its excellent product research and development capabilities. For more than 20 years of continuous and stable quality, consumers have always voted for it - this year's 618 promotion, Nongfu Spring still maintained the first record in the whole industry and the whole network.
If an enterprise is a person, then the product represents his character. An entrepreneur and a business rely on his products to embody character and express his contribution to this society. From a business theory, if all the products of an enterprise are standing tall in the sky, then the enterprise must be noble. As a company, the product is not good, but it is empty to talk about feelings, which is no different from playing hooligan.
Not to mention that in the case of such a turbulent cyberstorm, when floods occurred across the country in June, employees in various regions of Nongfu Spring were still insisting on public welfare and delivering urgently needed drinking water to the victims as soon as possible. This is no longer explained by feelings, but more of an inertia and a reflex of the company.
"Responsible" is essentially a gene, and it can extend to all aspects of the enterprise
When we say that a person is "responsible", we often do not mean that he is only responsible for something. "Responsible" is actually a gene, which will extend to all aspects. The same goes for businesses. In the entrepreneurial process of Nongfu Spring, we also saw the mutually beneficial and win-win relationship between this enterprise and its upstream and downstream partners.
According to a data, the ex-factory price of a bottle of 550ML Nongfu Spring natural water with a retail price of 2 yuan is about 0.7 yuan, and after deducting logistics costs and taxes, Nongfu Spring's own income is only 0.55 yuan, accounting for less than 30%. In contrast, the revenue of its distributors and terminal stores is about 1.3 yuan per bottle, accounting for more than 64% of the revenue, which is rare in other industries and enterprises. During the three-year epidemic, Nongfu Spring adhered to the contract, even if the dealers and terminal stores were closed for a long time and closed for business, they always provided display fees to the small stores to help them tide over the difficulties. At a time when channels are king, Nongfu Spring has won the most important part of retail, whether it is "profit" or "righteousness".
Nongfu Spring, which is listed on the Hong Kong stock market, currently has a total market capitalization of nearly HK$380 billion, and there are a large number of retail shareholders, which is a relatively silent group of people who are hardly noticed in other companies.
At present, affected by the volatility of the stock market, the volatility of Nongfu Spring's stock price has also been amplified. At the time of the stock price adjustment, Nongfu Spring's major shareholders chose to increase their holdings of shares in a large amount, which obviously released a strong value signal: on the one hand, this timely increase plan can naturally be regarded as the best proof of Nongfu Spring's responsibility to shareholders and help stabilize the stock price; On the other hand, in the current weak market environment, the increase in holdings also reflects the full confidence of major shareholders in the company's long-term development.
With Yangshengtang's large-scale shareholding increase plan as a reference, investors in the secondary market may be able to "learn from" the operating trends of the company's controlling shareholders and actively go long Nongfu Spring to protect the interests of small and medium-sized shareholders.
After all, from a fundamental point of view, Nongfu Spring, as a leader in the soft drink industry, has deep brand advantages, scale advantages and cost advantages. In the long run, Nongfu Spring has sufficient growth drivers, and its performance has both high certainty and growth. As the company continues to realize its growth potential, the subsequent stock price may rise and is expected to regain the long-bull trend.
Looking back, in all kinds of subtle corners, Nongfu Spring has its own judgment and code of conduct, almost undisturbed by the outside world, and not too ostentatious. It should be said that this is the conscious responsibility and sense of mission of the leading enterprises in the industry, which Nongfu Spring can be called the benchmark of Chinese beverage enterprises.