"Protect your throat, please use a golden throat throat piece, Guangxi golden throat!" The slogan was a memory of a generation, but the household name company is about to delist on the Hong Kong Stock Exchange.
On October 29, before the deadline given by the Hong Kong Stock Exchange, Golden Throat (6896. HK) announced that the Offeror, a company indirectly wholly owned by the Founders Holdings Company and Asia Endowment Holdings, and the Company will take the Company privately by way of an arrangement by agreement and will cancel the shares at HK$2.80 per Share of the Schemed Shares (a premium of 3.7% over yesterday's closing price). It is expected that the listing status on the Stock Exchange will be revoked on 15 December.
Affected by this news, as of the close of trading on October 29, the share price of Golden Throat closed at HK$2.69, down 0.37%, with a market value of less than HK$2 billion. Since its listing for 6 years, the share price of Golden Throat has fallen from a maximum of more than 6 yuan per share to more than 1 yuan, and the market value has shrunk by up to 90%.
<h2>Golden Throat intends to privatize and delist</h2>
As for the reasons for proposing the privatization, Kim noted that the proposal was made five years after the company's initial public offering, during which time its financial results were mixed, the launch of new products was less attractive, resulting in falling stock prices and increasingly insufficient liquidity in stock trading.
In fact, behind the sluggish stock price is the mediocre performance of Golden Throat since its listing. According to the data, from 2015 to 2020, the total operating income of Golden Throat was 708 million yuan, 768 million yuan, 624 million yuan, 694 million yuan, 797 million yuan and 647 million yuan, and the net profit was 155 million yuan, 103 million yuan, 0.61 billion yuan, 102 million yuan, 168 million yuan and 154 million yuan, respectively. Among them, the company's revenue and net profit in 2020 are not as good as in 2015 at the beginning of the listing.
On September 23, Golden Throat released its 2021 semi-annual report. According to the financial report, in the first half of 2021, the revenue of Golden Throat was 373 million yuan, an increase of 83.1% year-on-year; the net profit was 81.5 million yuan, an increase of 415.8% year-on-year. Gold explained that the increase in earnings is due to the fact that sales in the first half of 2021 have returned to pre-COVID-19 levels. In addition, the Company's sales and distribution expenses amounted to approximately $148 million, representing a year-on-year increase of 38.7% and accounting for 39.6% of total revenue.
Over the years, the revenue structure of Golden Throat is very single, and Golden Throat Throat Tablets is the company's main source of revenue. In the first half of 2021, golden throat tablets (OTC) sales accounted for about 89.3% of the company's total revenue.
Kim said that while the company's continued operations may generate profits, its lack of growth momentum is not ideal for the company, shareholders or other stakeholders. The company believes it needs a clear revitalization plan, which will require significant investment. Much of the Company's proceeds from the IPO have been used, so a significant investment in reinvigorating growth will require further funding or external funding from existing shareholders. Therefore, the Founders Group believes that the best way to achieve long-term growth in earnings, new product development and the resulting employment opportunities is to invest for a period of time, which can only be achieved by privatizing the company and bringing in external capital from well-known investment professionals.
This recommendation is designed to transform your business in a challenging market environment with talented partners. Following the implementation of the Proposal, the Offeror Group intends to carry out a business transformation so that the Founder Group, Asia Endowment Holdings and the Group will focus their resources on the production and marketing of throat lozenges and other pharmaceutical and food products.
In view of the financial investment and time required, the Founders Group and Asia Holdings believe that the privatization of Golden Throat to operate outside the public stock market will be able to more effectively expand and transform its current business operations without the ongoing pressure to maintain short-term business performance.
According to the data, Guangxi Golden Throat Co., Ltd. (Golden Throat) was established on September 18, 1998, with a registered capital of 250 million yuan. Jiang Peizhen is the founder, chairman and legal person of Golden Throat. The company is mainly engaged in the manufacture and sale of throat tablets and other drugs and food, the business scope includes tablets (including golden throat tablets), hard capsules, granules (including Chinese medicine pretreatment and extraction) production, sales; confectionery products (candy) production and sales; import and export of goods.
Golden Throat has been listed on the Hong Kong Stock Exchange since 15 July 2015, with an opening price of HK$4.71 on the first day of listing. On 28 July 2016, the share price reached a record high of HK$8.47, and the market value once exceeded HK$6 billion. The share price then went all the way down, falling below HK$1 in October 2018. As of October 29, 2021, Golden Throat's share price was HK$2.69 and its market value was HK$1.99 billion. According to Oriental Wealth data, since the listing of Golden Throat for 6 years, the market value has shrunk by 90%.
In addition, in order to break the single product model of Golden Throat Throat Tablets, Golden Throat launched Golden Throat Herbal Drink in May 2016 and Golden Throat Sausage Treasure in July 2019. However, both products did not sell well and both ended in failure.
<h2>Ronaldo was once accused of "routine"</h2>
Golden Voice has sparked controversy over star Ronaldo's endorsement.
According to media reports at the time, in the summer of 2003, Ronaldo followed Real Madrid to Play a commercial match in China, and Jiang Peizhen, the actual controller of the golden voice, invited Ronaldo to a private banquet for 300,000 US dollars and asked Ronaldo to wear clothes printed with "golden throat tablets" to take pictures. At that time, the public generally believed that Ronaldo was advertising the golden voice, which became popular and the sales volume increased year by year.
Four years later, in January 2007, it was reported that Ronaldo would sue Golden Throat for 10 million euros. The reason is that Ronaldo told the media that he himself was only invited to a brief party and took some photos of the gathering with the senior management of the Golden Throat Company, but did not know that the Golden Throat Company would use these photos in the promotional advertisement of the product. As a result, Golden Throat was embroiled in an infringement dispute.
However, this statement was denied by Golden Throat, who issued a statement pointing out that since 2003, Golden Throat has signed several agreements with Mr. Luis Nazario da Lima Ronaldo, stipulating that Mr. Ronaldo will serve as the spokesperson for Golden Throat products in China and agree to use his portrait for television advertising. The advertising cooperation between Golden Throat and Mr. Ronaldo has an agreement signed by both parties as a legal basis. Jin Zizi and Ms. Jiang Peizhen do not have the situation of "fooling Ronaldo" and "using the materials on the dinner table to make an advertisement for 'Ronaldo endorsing the golden throat throat piece'" in the Internet rumors.
In August 2007, Golden Voice announced that another star, Kaka, had officially become the company's future image spokesperson, and his endorsement with Ronaldo, "Rashomon", was also gone.
<h2>It has been rumored that more than 50 million yuan of advertising fees are owed</h2>
In addition, in 2019, a consumption restriction order issued by the China Enforcement Information Disclosure Network showed that the "Golden Throat" owed more than 50 million yuan in advertising fees, and Jiang Peizhen, the then 73-year-old chairman of the Golden Throat, became the "dishonest executor".
According to the Shanghai Municipal Higher People's Court network, the court has restricted its legal representative, Jiang Peizhen, from leaving the country in accordance with the law because the person subject to enforcement, Guangxi Golden Throat Food Co., Ltd., has not fulfilled the obligations set forth in the legal documents. The subject of execution is 51.9498 million yuan. The incident arose from an advertising dispute between Golden Throat Food and Shanghai Brite Star Culture Media Co., Ltd.
As the actual controller of Golden Throat Food, Jiang Peizhen has been listed by the court as a "restricted consumer" and has been restricted from taking planes and living in hotels above star rating.
The case that led to Jiang Peizhen's restriction on leaving the country originated four years ago. According to the China Times, in 2016, Guangxi Golden Throat Food Co., Ltd. hired Shanghai Canxing Culture Media Co., Ltd. to provide "Gaishi Yinxiong" program implant planning services for the golden throat herbal beverage listing and dissemination project. Golden Throat Foods also reached a memorandum of understanding with Star International, a wholly-owned subsidiary of Canstar, to reach an advertising cooperation in "Gai Shi YinXiong" and "The Masked Singer Season 2", and Golden Throat Foods sponsored the program.
According to the agreement between Golden Throat Food and Star International, the total price of advertising sponsorship of the two programs is 80 million, and the rating guarantee is also agreed.
Starry Sky International took stock afterwards, the ratings of "The Masked Singer" exceeded expectations, Golden Voice Food had to pay 40 million advertising fees, "Gai Shi Yinxiong" rating guarantee point was 1.80, the actual rating was 1.07, according to the conversion and then subtracted the 13 million that Golden Throat Food had paid in the early stage, and also paid 10.76 million.
Golden Voice Food believed that the ratings of "The Masked Singer" and "Gai shi Yin Xiong" were not up to standard, and refused to pay the remaining fees. So the two sides fought a lawsuit, and the court ruled that the advertising contract between the two sides was substantively established; "The Masked Singer" completed the ratings of the checkpoint, "Heroes of the World" did not complete the ratings of the checkpoint, and Golden Throat Food should pay the remaining advertising fee of 51.67 million yuan.
However, according to the latest Tianyan inspection, Jiang Peizhen has been revoked from the height restriction order.
In response to the above incident, on October 9, 2021, Guangxi Golden Throat Co., Ltd. issued a solemn statement saying that the two parties had already reached a settlement regarding the advertising contract dispute between a media company and Guangxi Golden Throat Food Co., Ltd., and Golden Throat Food had fulfilled all payment obligations. The Shanghai No. 1 Intermediate People's Court has also issued a judicial document clarifying the conclusion of the case. According to the effective legal documents, Ms. Jiang Peizhen and Golden Throat Food do not have the behavior of "being a lao lai" and "not paying the advertising money" as rumored on the Internet.
In addition, in response to the online rumor of the company's "routine" Ronaldo, Guangxi Golden Throat Co., Ltd. once again responded that since 2003, Golden Throat has signed a number of agreements with Mr. Luis Nazario da Lima Ronaldo (hereinafter referred to as "Mr. Ronaldo"), stipulating that Mr. Ronaldo will serve as the spokesperson for Golden Throat products in China, and agree to use Golden Throat's portrait for television advertising. The advertising cooperation between Golden Throat and Mr. Ronaldo has an agreement signed by both parties as a legal basis. Jin Zizi and Ms. Jiang Peizhen do not have the situation of "fooling Ronaldo" and "using the materials on the dinner table to make an advertisement for 'Ronaldo endorsing the golden throat throat piece'" in the Internet rumors.
(Titanium Media APP Editor Wu Maple Leaf Synthesized from Securities Times, Hexun Network, Brokerage China, China Times)