Pi Hai Chau | Cube everyone talks columnist
Recently, the delisting of Golden Throat has received great attention from the market. On 29 October, Golden Throat announced on the Hong Kong Stock Exchange that the Offeror, Aureli Investments Ltd(a company indirectly wholly owned by the Founders Holdings Company and Asia Capital Holdings), and Golden Throat, by way of an agreement arrangement, privatized the company and would cancel the shares at HK$2.80 per share of the Planned Shares. The Company expects to revoke the listing status of the shares on the Hong Kong Stock Exchange at 9:00 a.m. on December 15, that is, Golden Throat will be delisted from hong Kong stocks.
Delisting is not a bad thing for Golden Throat. After all, the delisting of Golden Throat is not a bankruptcy liquidation, but an active arrangement for the company to privatize. And Golden Throat is still a profitable business. In the first half of this year, the company's revenue was 370 million yuan, and its net profit also reached 81.5 million yuan.
Golden Throat is a well-known brand in the country, "Protect the throat, please use the Golden Throat Throat Treasure!" "Protect your throat, please use a golden voice, Guangxi golden voice!" The advertising slogan is a household name. So, why did Golden Throat choose privatization and delisting?
The explanation given by the company is that while the company may be profitable to continue operating, 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.
Golden Throat said that after the implementation of the privatization and delisting, the Offeror Group intends to carry out business transformation so that the Founder Group, Yafu Holding Company and Golden Throat will focus their resources on the production and marketing development of throat tablets and other pharmaceutical and food products.
It is based on the arrangement and planning of golden throat after the privatization of the company, so delisting will be the first step for golden voice to revitalize the company. Because for the company, it is indeed necessary to introduce external shareholders and new funds to inject vitality into the company's development. After all, the current golden voice is lacking vitality, and the company's development cannot see growth. The company has a single product, and there is basically no room for improvement in performance.
This can be fully verified from the company's performance data. From 2018 to 2020, the company achieved revenue of 695 million yuan, 797 million yuan and 648 million yuan, and achieved net profit of 102 million yuan, 168 million yuan and 154 million yuan, respectively. Although the company's performance in the first half of this year increased by a large margin, in the first half of the year, the company achieved revenue of 370 million yuan, an increase of 83.6% year-on-year; net profit of 81.5 million yuan, an increase of 414.65%. However, this is due to the fact that the performance of the first half of last year was greatly affected by the epidemic. The company's performance in the first half of the year was only back to normal levels. In fact, as early as 2015, the company's revenue in the first half of the year was close to 350 million yuan, achieving a net profit of more than 90 million, even higher than the net profit level in the first half of this year.
Not only that, in order to maintain the company's current performance, the main measure taken by the company is to increase prices. According to the financial report of Golden Throat, the price of Golden Throat Throat Tablets single box products rose from 4.3 yuan in 2014 to 6.4 yuan in 2020, with a price increase of 48.83%, but its cost increase was 36.36%. In fact, the sales of the product are declining. From 2015 to 2020, the overall trend of Golden Throat sales decreased, followed by 129 million boxes, 124 million boxes, 101 million boxes, 104 million boxes, 113 million boxes and 0.91 billion boxes.
It is based on the company's performance, which also led to the company's stock price slump. It landed on the Hong Kong Stock Exchange on 15 July 2015, and a year later, Golden Throat hit its highest price of HK$8.47 since the stock went public, but then the stock price fell lower, falling to a low of HK$0.92. After that, although the stock price recovered, it basically belonged to the category of 1 yuan shares. Rumors of privatization in August spurred the company's share price to stand above HK$2. By October 29, Golden Throat had closed at HK$2.69. Therefore, whether it is the company's performance or stock price, it is difficult to satisfy the market.
Jin's throat fell into such a dilemma, which was obviously decided by the company's soul figure Jiang Peizhen. Jiang Peizhen was able to develop from a small confectionery factory into a well-known enterprise in the country, and even listed in Hong Kong, Jiang Peizhen was indispensable. But Jiang Peizhen was doomed to take the golden voice to a higher realm. Born in 1946 to a poor family in Pingnan, Guangxi, Jiang Peizhen dropped out of school as an apprentice at the Liuzhou Candy Factory no. 2 at the age of 13 and began her career as a sugar packer. Later, he rose from the head of the production team to the director of the workshop, and was elected as the deputy director at the age of 18, and was elected as the director of the factory at the age of 33.
Jiang Peizhen's experience made her attach importance to marketing and despise the investment in scientific research, especially the formula of golden throat was donated to the candy factory by Professor Wang Yaofa free of charge, which made Jiang Peizhen ignore the importance of scientific research even more. The fact that the golden voice advertising words can be well-known is the result of its emphasis on marketing, and Jiang Peizhen even pulled the big star Ronaldo as the spokesperson for her products, which is a very successful marketing. Reflected in the data, from 2016 to 2020, the R&D investment of Golden Throat was 1.98 million, 2.09 million, 2.2 million, 2.89 million and 2.79 million, respectively. In the same period, the company's sales expenses were 319 million yuan, 306 million yuan, 290 million yuan, 308 million yuan and 253 million yuan, accounting for around 40% of revenue. Therefore, it is obvious that the golden voice emphasizes marketing over scientific research.
As a pharmaceutical factory, it is unimaginable that Golden Throat does not have the input of scientific research. This determines the singleness of the company's product and determines the failure of the company's diversification strategy. Without the necessary investment in scientific research, where are the new products coming out? In this case, no matter how well the marketing is done, the people of the whole country cannot take the golden throat throat treasure and throat tablets as a meal to eat, not to mention that the golden throat is also facing competition from similar products in the market, and its market share is inevitable.
Therefore, in order to get rid of the current situation, Golden Voice must weaken the influence of the soul figure Jiang Peizhen on the company, increase the company's scientific research investment, and embark on the road of diversified development. Therefore, it is necessary for Golden Voice to take big measures to introduce powerful major shareholders. It is not only necessary to have the advantage of financial strength, but also to have the advantage of scientific research resources. A pharmaceutical factory, without the support of scientific research, can not go too far. The delisting of Golden Throat is the best proof of this.
Editor-in-charge: Liu Anqi | Review: Li Zhen | Director: Wan Junwei