Reporter | Yuan Yiming
Edit | Xie Xin
Afraid of going on fire to drink Wang Laoji, what if Wang Laoji is also on fire?
On August 19, Baiyunshan, the parent company of Wang Laoji, announced the 2021 semi-annual report, which shows that in the first half of 2021, Baiyunshan achieved revenue of about 36.129 billion yuan, an increase of 18.57% year-on-year; the net profit attributable to the shareholders of listed companies was 2.502 billion yuan, an increase of 41.84% year-on-year.
Among them, Wanglaoji health Company (hereinafter referred to as Wanglaojida Health), a wholly-owned subsidiary of Baiyun Mountain, achieved revenue of 6.006 billion yuan and operating profit of 2.854 billion yuan; net profit was 1.17 billion yuan, accounting for 44% of the total net profit of Baiyun Mountain. The big health sector with Wang Laoji as the core achieved revenue of 6.604 billion yuan, an increase of 46.71% year-on-year.
Overall, the brand of Wang Laoji is still very important in the Baiyun Mountain system.
However, in contrast, the net profit of Wang Laoji Health in the first half of 2019 was 1.114 billion yuan, and the net profit in the first half of 2020 was 841 million yuan. The big health sector with Wang Laoji as the core had an operating income of 5.854 billion yuan in the first half of 2019, an increase of 10.98% year-on-year, an increase of 12.12 percentage points year-on-year; the revenue in the first half of 2020 was 4.501 billion yuan, down 23.11% year-on-year.
If you only look at the numbers, Wang Laoji seems to have eased back from the impact of the new crown epidemic, and the net profit of Wang Laoji Health and the operating income of the entire big health sector have basically returned to the pre-epidemic level.
However, according to this performance, Baiyun Mountain's controlling shareholder, Guangzhou Pharmaceutical Group, is likely to be unable to complete the performance commitment of the Wang Laoji series of trademarks signed 3 years ago.
In December 2018, Baiyunshan purchased all the rights of the WangLaoji series of trademarks held by Guangzhou Pharmaceutical Group in cash at a transaction price of 1.389 billion yuan, and in April of the following year, Baiyunshan was transferred to Guangzhou Pharmaceutical Group's Wanglaoji series of trademark assets and completed the delivery.
According to the Performance Compensation Agreement signed by the two parties at that time, the performance commitment period of Wang Laoji's trademark assets was 3 years, and the net income from trademark licensing of 153 million yuan, 163 million yuan and 171 million yuan was completed in 2019, 2020 and 2021 respectively. If the accumulated net income from trademark licensing fails to meet the above requirements, Guangzhou Pharmaceutical Group shall compensate Baiyun Mountain in cash.
In 2019, the performance commitment was completed, with a completion rate of 105.79%, but in 2020, due to the impact of the new crown epidemic, the completion rate of the performance commitment was only 75.03%.
Seeing that the three-year contract is approaching, on August 19, Baiyunshan and Guangzhou Pharmaceutical Group signed the Supplementary Agreement on performance compensation agreements, and passed the "Proposal on the Deferral of performance commitments and signing of supplementary agreements by controlling shareholders". The agreement shows that under the communication and consultation between Guangzhou Pharmaceutical Group and Baiyun Mountain, the two sides adjusted the performance commitment period, that is, the performance commitment period was adjusted from 2019, 2020 and 2021 to 2019, 2021 and 2022, and the amount of promised performance remained unchanged.
That is to say, in 2020, when the performance commitment is poor, it does not count. After all, as the major shareholder of Baiyun Mountain, Guangzhou Pharmaceutical Group naturally "chose to forgive him".
However, the impact of the new crown epidemic is only short-term, and at the end of the years of struggle between Wang Laoji and Jiaduobao, the rapid rise of new drinks such as Xicha and Yuanqi Forest is the huge challenge that Wang Laoji and even the entire herbal tea drink will face.
According to the Tianyancha APP, the market size of the domestic herbal tea industry in 2017 was about 57.8 billion yuan, with a growth rate of only 9.1%, while ten years ago, the growth rate was 15%. On the other hand, the Prospective Industry Research Institute's "2020-2025 China Soda Industry Market Development Prospects and Investment Forecast Analysis Report" shows that in 2019, the overall market size of China's soda water is about 15 billion yuan, and it is predicted to reach about 32 billion yuan in 2025. According to Frost & Sullivan, from 2014 to 2019, the size of China's tea beverage market reached 78.7 billion yuan (excluding herbal tea).
It can be said that Wang Laoji's opponent is no longer Jiaduobao, and what Wang Laoji has to worry about is how to change the market environment of the entire beverage industry, he will not lose to the times and become the next Nokia.