Ice Peak Sprint IPO

Economic Observer reporter Cai Yuekun "cool skin, meat sandwich steamed buns, and then a bottle of ice peak" in Xi'an is known as the "Three Qin Package". In the second half of 2021, Xi'an Bingfeng Beverage Co., Ltd. (hereinafter referred to as "Bingfeng"), the producer of bottled Bingfeng, started the process of IPO.

In early July, the China Securities Regulatory Commission pre-disclosed Bingfeng's initial public offering prospectus (draft declaration), and the company, which is mainly engaged in orange-flavored soda in Xi'an, officially began to sprint for an IPO. Huachuang Securities Co., Ltd. (hereinafter referred to as "Huachuang Securities") is the sponsoring securities company listed on Bingfeng.

It is reported that Bingfeng soda originated in 1948, the main business is orange flavored soda, sour plum soup and other beverages research and development, production and sales. As a local soda brand enterprise in Xi'an with a history of more than 70 years, the prospectus discloses that the purpose of the IPO is to renovate and expand the glass bottle production line; it means that Bingfeng intends to expand reproduction.

However, according to the Economic Observer reporter, the market competition for glass bottle soda drinks is also very fierce, with Bingfeng in Xi'an, Arctic Ocean in Beijing, and Shanhaiguan in Tianjin. Moreover, in the first half of the year, the retail terminal of Bingfeng glass bottled soda has been raised from the original 2 yuan / bottle to 2.5 yuan or 3 yuan / bottle. After the price increase, how the soda beverage Bingfeng with strong Local characteristics of Xi'an continues to maintain its advantage in the cruel beverage market is worthy of attention and expectation.

Regarding the progress of Bingfeng's IPO, on August 18, the reporter called the contact number disclosed in Bingfeng's prospectus, and the other party responded: "It is not clear." In addition, the person provided the reporter with the contact information of a public relations company, and after the reporter called, the relevant person replied: "The disclosure on the official website of the SECURITIES Regulatory Commission shall prevail." ”

Although Bingfeng faces many risks on the way to listing, the 14th National Games in 2021 is about to be held in Xi'an, and Bingfeng has become its exclusive supplier and sponsor, launching the "Bingfeng Fourteen Transport Boom Tank", which can be called Xi'an's business card.

It is planned to raise 670 million yuan

In January this year, according to the Shaanxi Securities Regulatory Bureau, Bingfeng signed a listing counseling agreement with Huachuang Securities to be listed on the small and medium-sized board of the Shenzhen Stock Exchange. In early July, the China Securities Regulatory Commission (CSRC) pre-disclosed Bingfeng's initial public offering prospectus (draft filing).

According to the prospectus, the total amount of funds raised by Bingfeng in this offering, after deducting the issuance fee, will be used for the following three projects related to the issuer's main business: first, the glass bottle production line transformation and expansion project, with a total investment of 198.9603 million yuan; second, the marketing service network upgrade and brand construction project, with a total investment of 429.8527 million yuan; third, the construction project of the information management platform, with a total investment of 40.3299 million yuan. The total planned investment of the three projects is 669.1429 million yuan (about 670 million yuan).

According to bingfeng's IPO prospectus, the purpose of fundraising means that Bingfeng intends to expand reproduction.

For the advantages of fundraising, the prospectus also clearly stated that after deducting the issuance fee, the funds raised by Bingfeng in this offering will be used for "glass bottle production line transformation and expansion project", "marketing service network upgrade and brand construction project" and "information management platform construction project", which is conducive to the company to solve the bottleneck of production capacity, enhance brand awareness, improve marketing channels, gradually develop from regional brands to national brands, and improve information operation and management capabilities.

In addition, after the funds were raised, Bingfeng also said that it would speed up the construction progress of the fundraising project. With the gradual completion of the fundraising project, the company's profitability and operating performance will be effectively improved, which will help to fill the dilution of the immediate return of shareholders in this offering.

From the financial analysis, from 2018 to 2020, Bingfeng achieved revenue of 286 million yuan, 302 million yuan and 332 million yuan, and net profit of 69.69 million yuan, 77.67 million yuan and 65.25 million yuan, respectively. In 2020, Bingfeng's net profit fell by more than 19%. For the company's net profit in 2020 decreased compared with the previous year, Bingfeng said that it was mainly due to the company's equity incentive payment of 35,546,394.33 yuan for core backbone personnel.

For the financial situation, Bingfeng said in the prospectus that the compound growth rates of the company's operating income, gross profit and net profit after deducting non-deductions were 7.79%, 4.40% and 15.70% respectively, showing a stable growth trend.

As an old brand for many years, why did Bingfeng choose to start the road of IPO at this time?

Bingfeng mentioned in the prospectus that the competition in the beverage industry is fierce, and the company's business development, product extension, manpower introduction and optimization management tasks are heavy, especially brand promotion. So far, the company's business development has relied on its own accumulation, which has restricted the company's leapfrog development. Therefore, with the help of the capital market, enhance the company's brand image and financing capabilities, gradually implement the brand building plan, information system upgrade plan, product development plan, production capacity expansion plan, etc., strengthen the brand image in first-tier cities, and drive the brand establishment and promotion of second- and third-tier cities, which is the foundation for further consolidating the company's long-term development, and is the only way for "Bingfeng" to move from a regional brand to a national brand.

Questioned by retail price increases

At the time of Bingfeng's listing, as a local soda "Aotou" enterprise in Xi'an, bingfeng's hot-selling product glass bottle soda drink in the first half of the year has quietly increased in price, causing many consumers to question.

On August 18, when the reporter asked a person in charge of the sales end of Bingfeng, the other party said that the price increase of glass bottle soda was about April 2021, and the retail price of each bottle of the merchant was raised from the original 2 yuan per bottle to 2.5 yuan or 3 yuan.

A consumer of Xi'an Bingfeng complained to reporters that the advantage of Bingfeng was originally a price advantage, 2 yuan / bottle compared to other beverages The price is low, and now it has risen to 3 yuan / bottle, which is almost the same as the price of other beverages, the price advantage is no longer, and the frequency of choosing Ice Peak will also decrease when consuming with the increase of the selected category.

The relevant person in charge of Bingfeng once said in an interview with the media that due to the rise in raw and auxiliary materials and labor costs, it is difficult for profits to promote the benign development of enterprises, so they chose to adjust prices. Since March 31, the factory price of glass bottles has been adjusted to 0.5 yuan, and the suggested retail price after this price adjustment is 2.5 yuan per bottle. Bingfeng glass bottle has always been the implementation of factory price pricing, freight, miscellaneous charges by the merchants themselves, some merchants set the retail price at 3 yuan / bottle.

On the other hand, looking back at the history of Bingfeng's development in Xi'an, we must start from the last century. According to the official website of Bingfeng, in 1948, a businessman introduced soda production equipment from Tianjin and built xi'an's first soda factory - Northwest Soda Factory in Machangzi, East Avenue, to produce "foreign gas water"; in 1953, the state-owned Xi'an Food Factory was established, and the Northwest Soda Factory was incorporated after the public-private partnership, and a soda workshop was established in Xiguanzheng Street, and the Bingfeng brand was born;

At present, the shareholding of Shareholders of Bingfeng is as follows: Xi'an Sugar and Wine Group (hereinafter referred to as "Sugar and Wine Group") holds 178.2 million shares, with a shareholding ratio of 99%; The number of shares held by Jiuyue Liquor is 1.80 million shares, with a shareholding ratio of 1%. Sugar and liquor group's products include: "Bingfeng" beverage, "Qin Figurines", "Xi'an Special Qu" series of liquor, etc., and its "Bingfeng" series of drinks is the first in the sales of similar products in Shaanxi Province.

After more than 70 years, "cool skin, meat sandwich steamed buns, and then a bottle of ice peak" has been known as "Three Qin Packages" in Xi'an. While Bingfeng orange flavored soda becomes the advantage of Bingfeng, it also limits the further expansion of Bingfeng.

According to the prospectus, Bingfeng's dependence on the region is very obvious. During the reporting period, the company's sales revenue mainly came from Shaanxi, accounting for 87.44%, 81.73% and 80.23% respectively, which restricted the company's future outward expansion of business development to a certain extent. If the company cannot effectively develop new markets outside Shaanxi Province and broaden the broader product market area, it will have a certain impact on the company's future growth.

In addition, during the reporting period, the cumulative sales volume of Bingfeng orange flavored soda (including glass bottles and cans) reached 756 million bottles (cans), with revenue of 250 million yuan, 250 million yuan and 270 million yuan respectively, accounting for 86.3%, 84.3% and 81.4% of the main business income, respectively.

Although in addition to orange-flavored soda, Bingfeng also has other products such as sour plum soup, tea, and Bingfeng fruit, the company's dependence on a single product is obvious. Bingfeng also admitted in the prospectus that sour plum soup and other products are still in the market development stage, and the sales scale is still small.

Listing is at risk

On the other hand, the listing of Bingfeng still faces some risks.

According to the prospectus, first of all, Bingfeng faces market expansion risks. Bingfeng beverage brand has existed for more than 70 years, has a strong influence and brand advantages in the western region, and the compound growth rate of main business income during the reporting period is 7.74%, with a good foundation, steady development and good growth momentum.

However, Bingfeng said that due to the high degree of marketization of the beverage industry and changes in consumer tastes, the mutual penetration of competitors in market areas and product categories will continue for a long time, and the company still needs to increase investment in brand building, marketing networks and other aspects to strengthen market expansion. If the company fails to improve its strategic decision-making, management level, technology research and development and capital investment synchronously, it may lead to a mismatch between the input and output of market expansion, which will have a certain adverse impact on the company's operating performance.

Secondly, Bingfeng faces the risk of extended development of new products. During the reporting period, Bingfeng developed a number of new products, the market sales of flavored beverages grew rapidly, and the tea beverages were in a period of development, and the follow-up will further enrich the product line. However, due to the need to invest more resources in the extension of research and development of new products, and there may be a risk of research and development failure or market disapproval, which will have a certain impact on the company's performance.

and sales area concentration risk. The prospectus discloses that during the reporting period, Bingfeng's sales revenue mainly came from Shaanxi, accounting for 87.44%, 81.73% and 80.23% respectively, and there was a certain risk of concentration in sales areas, which restricted the company's future outward expansion of business development to a certain extent. If the company cannot effectively develop new markets outside Shaanxi Province and broaden the broader product market area, it will have a certain impact on the company's future growth.

In addition, the prospectus also disclosed that after the funds are raised, the "glass bottle production line transformation and expansion project", "marketing service network upgrade and brand construction project" and "information management platform construction project" will be implemented successively. On the one hand, the company's net assets have increased accordingly. On the other hand, with the implementation of the fundraising project, the depreciation or expense of the company's fixed assets increases accordingly. Third, the construction of fundraising and investment projects requires a certain period of time, and the production and realization of benefits lag behind. The above situation makes the realization of the income of the fundraising project lag behind the increase in net assets, resulting in the risk of the company's return on net assets declining for a certain period after the issuance. The company is also at risk of failed offerings. According to the Administrative Measures for the Issuance and Underwriting of Securities and other relevant provisions, if the investment value of the issuer cannot be recognized by investors during the issuance process, resulting in insufficient subscription of the offering, the issuer may risk failure of the offering.

It is worth noting that although Bingfeng faces many risks on the way to listing, the 14th National Games in 2021 will be held in Xi'an, and Bingfeng has become its exclusive supplier and sponsor, launching the "Bingfeng Fourteen Luck Pumping Tank", as Xi'an's business card, contributing to the development of the city.

For the listing of Bingfeng, the Economic Observer will continue to pay attention.