At the time of Guozhong Water's acquisition, there was an unexpected change in the senior management of Huiyuan Juice

Image source: Visual China

Blue Whale News, August 2 (Reporter Zhang Jinglun) On August 2, there was news in the market that Xian Xiaofang, executive president of Huiyuan, had been dismissed, and the replacement was unknown.

In response to this incident, Huiyuan responded to relevant media that Ms. Xian Xiaofang has been removed from the position of executive president of Huiyuan Juice, which is a normal personnel change of the company.

At the moment of the acquisition of Guozhong Water, this important personnel change of Huiyuan has attracted much attention in the industry. In the context of undecided ownership and intensified competition in the industry, Huiyuan Juice has encountered management turmoil, and how will the unfinished listing and revenue target of 10 billion yuan be promoted?

The post-90s CEO was suddenly dismissed

The personnel change information of Huiyuan juice is really sudden.

The Blue Whale News reporter noticed that on July 20, Xian Xiaofang also broadcast live with Wu Rongzhao, chairman of Hongxing Erke, as the "CEO of Huiyuan Juice". In just over ten days, the news of Xian Xiaofang's dismissal came out.

According to public information, Xian Xiaofang is a post-90s generation, and from 2018 to 2021, she attended relevant activities as the executive president of Huiyuan Juice Sparkling Juice Division, vice chairman of Huiyuan Juice and director of the Municipal Research Committee. By March 2022, in an article published on the official website of Huiyuan Juice, Xian Xiaofang was already known as the "CEO of Huiyuan Juice".

It is worth mentioning that since serving as the executive president, Xian Xiaofang has formulated a market strategy based on the "juice" track and "hitting the goal of 10 billion yuan in 3 years", and has promoted a number of product innovations of Huiyuan juice.

In March 2023, Xian Xiaofang said at the distributor conference in Beijing that Huiyuan Juice will refocus on medium and high-concentration juice products, slimming down the original 385 SKUs to 78, and will re-increase investment in the market and channels in the next stage, hoping to achieve 10 billion revenue in 3 years and re-listing.

According to the strategy disclosed by Xian Xiaofang, the sales structure of Huiyuan juice products in the future will be based on the ratio of 50%, 40% and 10% in high, medium and low concentrations. Among them, the high-concentration fruit juice category represented by the "100% series" has the characteristics of high price band and high profit contribution, and the series is a 3 billion level large single product. Medium-strength fruit juice products (fruit juice content of about 30%) based on multi-pulp series products are facing the mass market, reflecting the characteristics of high cost performance, and are 2 billion large single products.

At the level of product innovation, Xian Xiaofang personally created the first bottle of prune juice in Huiyuan, and Huiyuan is now the leader of the prune juice segment. At the end of 2023, the Sunshine Lemon series will be created, which has become a major item with monthly sales of more than 100 million.

In terms of performance, during Xian Xiaofang's tenure, Huiyuan Juice also delivered a brilliant report card. According to public data, in 2023, Huiyuan Juice will achieve revenue of 2.745 billion yuan, a year-on-year increase of 135.9%, net profit of 424 million yuan, and net profit margin will increase to 15.43%. The gross profit margin increased from 17.79% in 2022 to 24.76%, the non-net profit was 393 million yuan, the asset-liability ratio decreased significantly, and the financial position was optimized.

Tianyancha shows that at present, there are 5 affiliated enterprises of Xian Xiaofang, of which 3 companies are "existing" and 2 companies have been "cancelled". Among the three surviving companies, Xian Xiaofang is still the legal representative of Beijing Huiyuan Food and Beverage Co., Ltd. (hereinafter referred to as "Beijing Huiyuan"), and at the same time, she also serves as an executive in these three enterprises.

The progress of Guozhong Water's acquisition has attracted attention again

It is worth noting that before Xian Xiaofang was dismissed, the listed company Guozhong Water announced that the company is currently planning to pay cash to Shanghai Yongrui to acquire its shares in Zhuji Wenshenghui, and after the completion of the acquisition, the company will hold a total of no less than 816 million yuan of registered capital of Zhuji Wenshenghui, accounting for no less than 51% of the registered capital, so as to become the controlling shareholder of Zhuji Wenshenghui and the controlling shareholder of Beijing Huiyuan.

In response to the personnel change of Huiyuan Juice, the outside world speculated whether it was related to the acquisition of Guozhong Water, which was denied by the two companies.

According to the Daily Economic News, Huiyuan Juice insiders said that Xian Xiaofang was dismissed because of serious violations of the company's relevant regulations on financial management and expense management.

Regarding the question of whether Xian Xiaofang will be assigned other positions by Huiyuan Juice, Huiyuan Juice replied to the food internal reference that for a long time, Huiyuan has insisted on "not only academic qualifications, not only qualifications; The capable go up, the mediocre go down". At the same time, the appointment and dismissal of any employee or management personnel will be carried out in accordance with the company's relevant regulations and established procedures for personnel appointment in accordance with laws, regulations and ethical constraints.

And Guozhong Water wants to "drink" Huiyuan juice, which can be said to have been planned for a long time.

In March 2018, Huiyuan Juice was suspended due to a debt crisis. In 2019, Zhu Xinli, the founder of Huiyuan Juice, was listed by the court as a dishonest person subject to execution, and in December of that year, China Deyuan Capital (Hong Kong) Co., Ltd., as Zhu Xinli's authorized agent, was seized by the court, and 4.1 billion yuan of assets were frozen. In 2020, founder Zhu Xinli and his daughter Zhu Shengqin both withdrew from the board of directors of Huiyuan Juice. In 2021, Huiyuan Juice was officially delisted and reorganized into bankruptcy.

In June 2022, Shanghai Wensheng Asset Management Co., Ltd. (hereinafter referred to as "Wensheng Asset") became the reorganization investor of Beijing Huiyuan, planning to invest 1.6 billion yuan to become the controlling shareholder of the latter. Zhuji Wenshenghui is a shareholding platform established by Wensheng Asset Management to participate in the reorganization of Beijing Huiyuan.

However, half a year later, Guozhong Water, which was seeking business transformation, began to "take over" from Wensheng Assets, and it successively acquired Zhuji Wenshenghui shares three times, spending a total of 930 million yuan, and indirectly obtained 21.89% of Beijing Huiyuan's shares.

According to media reports, when acquiring Beijing Huiyuan shares for the first time, Wensheng Assets promised that Beijing Huiyuan's cumulative non-net profit from 2023 to 2025 will not be less than 1.125 billion, and the average annual will not be less than 375 million, otherwise Guozhong Water will be compensated.

In 2023, Guozhong Water will achieve an investment income of 82.8363 million yuan through investment in the Beijing Huiyuan project, accounting for 275.77% of the company's net profit attributable to the parent company for the current period. And this is also the key to the turnaround of Guozhong Water in 2023.

Therefore, for this acquisition, Guozhong Water said that if this transaction can be successfully implemented, it will optimize the company's asset structure, help improve the company's asset scale and profitability, promote the company's high-quality development, and conform to the company's future development strategy. At present, the acquisition transaction is still in the preliminary indicative announcement stage.

Zhu Danpeng, an analyst of China's food industry, believes that "investment institutions are optimistic about Huiyuan juice, more because the entire high-quality juice market has shown signs of recovery in the past two years." ”

It is worth mentioning that if Huiyuan is successfully acquired, although the goal of re-listing has been achieved. However, there should be a difference from what Huiyuan Juice mentioned in its New Year's message in 2024, "continue to redouble its efforts for the listing strategy".

The "King of Juice" is a bit difficult

On the other hand, even if the Huiyuan curve returns to A-shares, whether it can regain its past glory is still a question mark.

On the whole, a reality that cannot be ignored is that the development prospects of the juice track are not clear.

In the research report released by Haitong International in February, it pointed out that the juice category is going through a painful period, high-end transformation to increase the unit price of products, China's juice industry has shown a downward trend in the past decade, and the market size of fruit juice drinks in 2023 will be 74.37 billion yuan, a cumulative decrease of 20% from 2015, a decrease of 13.8% from 2019 before the epidemic, and the sales volume of juice in 2023 will be 7.7 billion liters, a decrease of 21.4% from 2019, and the market size is expected to be 72.1 billion yuan in 2026. At the same time, it is pointed out that the market is driven by pure juice with high unit price.

On the other hand, the competition in the domestic fruit juice beverage market is also intensifying, and there is a trend of continuous involution. Although Huiyuan's juice business has shown signs of recovery in the past two years, it is still a protracted battle to regain its glory.

At present, there are not only fruit juice "veterans" such as Nongfu Spring, Minute Maid and Tongyi, but also highly competitive brands such as Lingdu Guofang and Weiguoqing, and new brands such as Yuanji Institute and Yuxiang Valley have also successfully entered the circle with the help of niche juice categories, all of which are constantly encroaching on the market share of Huiyuan juice.

In addition, freshly made teas such as Hey Tea, Nai Xue, and Cha Baidao have also become an alternative to fruit juice products. At the same time, the fire of sugar-free tea and functional drinks has also formed a certain squeeze on the fruit juice category.

In addition to external factors, Huiyuan juice itself also has problems that need to be solved urgently.

Lin Yue, chief consultant of Lingyan Management Consulting and analyst of the catering industry, said that the current problem of Huiyuan juice lies in whether it can do deep and refined in the field of juice, as well as continue to innovate in raw materials, taste and collocation, and seize the attention of young consumer groups.

At a time when new consumer brands are emerging one after another, there may not be much time left for Huiyuan juice. But if you want to return to the previous peak, Huiyuan still has a lot to work on.