The Dragon Boat Festival is coming soon, and Wufangzhai, a long-established enterprise in Zhejiang that is closely related to Zongzi, is also about to go public. Recently, the website of the China Securities Regulatory Commission (CSRC) published the pre-disclosure documents of Wufangzhai listing, and the listing location was selected on the main board of the Shanghai Market, and the sponsoring institution was Zheshang Securities. This means that the old Zhejiang store that has wrapped zongzi for 100 years is about to go public.
Sells 400 million rice dumplings a year
As a well-known signboard in Zhejiang, "Wufangzhai" can almost be seen as a city card of Jiaxing. Founded in 1921, Wufangzhai has a history of 100 years, is the first batch of "Chinese time-honored brand" enterprises in China, and was recognized as a well-known trademark in China by the State Trademark Office in 2004.
The company disclosed in the prospectus that its rice dumpling making skills were included in the third batch of national intangible cultural heritage list by the Ministry of Culture in 2011, which can be called a pride of Zhejiang people. It is worth mentioning that although he is more than 100 years old, Wufangzhai still maintains a very young heart, and he has left the words "100 years old, young" on the company's official website.
"Young" performance focused on product innovation, in the company's official website can be seen, in addition to the well-known egg yolk meat dumplings, meat dumplings, bean paste dumplings, Wufangzhai also specially launched the Northern Cordyceps black pork dumplings, purple rice chestnut dumplings, Disney series rice dumplings and other innovative products, catering to the needs of customers of all ages and different tastes.
Because Zongzi sells well, the sales volume of a single Zongzi product of Wufangzhai is very huge. According to the prospectus, Wufangzhai has an average annual output of 400 million rice dumplings. This is undoubtedly the company's flagship product, and last year's revenue contribution rate was more than 70% (Wufangzhai also sells mooncakes, eight treasure rice, mung bean cakes, brine and other products). But perhaps some investors do not know, because of the huge production, Wufangzhai rice dumplings are not completely produced by themselves. The company's prospectus shows that the production mode adopted by Wufangzhai is mainly based on independent production and supplemented by commissioned processing and production. In 2020, the company's Zongzi production through the commissioned processing mode accounted for 25.01% of the total Zongzi output, that is, 1 in every 4 Wufangzhai Zongzi was outsourced.
Interestingly, due to the strong seasonality of rice dumplings, the company's production arrangements also have obvious off-peak season characteristics. For example, in the production season before the Dragon Boat Festival, in addition to outsourcing non-core positions as a labor supplement, the company will also recruit some flexible employment personnel in the surrounding areas as production personnel, mainly as rice dumpling workers, to make up for the company's production capacity demand in the peak season.
In terms of operating performance, from 2018 to 2020, Wufangzhai's revenue was 2.423 billion yuan, 2.507 billion yuan and 2.421 billion yuan, respectively, and the net profit attributable to the mother was 96.985 million yuan, 163 million yuan and 142 million yuan, respectively, with a year-on-year change of 68.21% and -12.9%, respectively. Affected by various factors such as product price, raw material cost, labor cost, etc., the comprehensive gross profit margin of Wufangzhai last year was 44.57%, down 0.86 percentage points from the previous year, but it is still a good figure. This time, Wufangzhai plans to raise 1.056 billion yuan to invest in smart food workshops, digital industry smart parks, R&D centers and information construction, Chengdu production base transformation and other projects and supplementary working capital.
How is the acceptance of "long-established" enterprises gathering in a share?
"Time-honored brand" is the precipitation and inheritance of a long-standing culture, and it is easy to form a relatively high degree of recognition among consumer groups. At present, more and more "old-fashioned" enterprises have gathered in A shares. In the capital market, can "old-fashioned" enterprises still get higher points?
Speaking of long-established enterprises, the most typical representative of the current A-share market is Moutai. Now many young A-share investors know that Guizhou Moutai is a benchmark enterprise of "A-share king", "the first high-priced stock", "fund heavy stock", and even A-share "value investment". But some people may not know that Moutai is also a long-established brand in China. Moutai wine, which began in 1951, is produced exclusively in Moutai Town, Renhuai City, Zunyi City, Guizhou Province, China, the originator of Daqu sauce-flavored liquor, is a special liquor of the Han nationality, and is called "the world's three major distilled liquors" together with Scotch whisky and French Cognac.
Similar to Moutai in Guizhou, Yunnan Baiyao, which is well-known in the pharmaceutical industry, is also a long-established enterprise. As a geographical specialty drug in Yunnan Province, Yunnan Baiyao was successfully developed in 1902, formerly known as "Qu Huan Zhang Wanying BaibaoDan", created by the famous Yunnan folk doctor Qu Huan Zhang (1880-1938), with hemostasis callus, blood circulation and fatigue, anti-inflammatory and swelling, pus and detoxification effect, mainly for the treatment of internal organ bleeding, gynecological hemorrhage, knife and gun wounds, bruises and chronic gastritis, duodenal ulcers and other diseases, came out for a hundred years, known as "Chinese miracle medicine" and "Chinese treasure". In the capital market, Yunnan Baiyao is also a typical "white horse stock", rising 32.92% in 2020, and the highest price this year has reached 159.38 yuan / share.
Of course, not every "old-fashioned" enterprise has such recognition as Guizhou Moutai and Yunnan Baiyao. Quanjude, an old roast duck shop with a history of 1864 (founded in 1864 and the third year of Tongzhi in the Qing Dynasty), has begun to decline year after year since 2016, with increases in the last five years being -3.54%, -19.57%, -34.85%, -7.99%, and -1.66% (the stock price has rebounded since this year, up more than 16%), corresponding to a net profit growth of 6.44%, -2.57%, -46.29%, -38.9% and -686.77%. Investors may be somewhat aesthetically tired of the hundred-year-old "roast duck".
Similar East Ejiao, in recent years, has also seen a lack of strength in the rise; another long-established restaurant "Dog Ignore" is in a worse situation, and in May 2020, it has announced its delisting from the New Third Board. Statistics show that of the nearly 2,000 long-established catering enterprises, only 10% are operating well, and most of the rest are barely maintaining the status quo. Industry analysts believe that "the lack of development of old brands is more common, mainly because the internal leadership of the enterprise operation is not aware of the construction of the brand, and the external consumers change very quickly, resulting in the internal operation and product development of the enterprise, which cannot meet the new needs of external consumers." Therefore, in the capital market, long-established enterprises such as Moutai and Yunnan Baiyao are always the corners of the wind, which is also a problem that long-established craftsmen need to think about after landing in the capital market. ”
An investment consultant of a securities company in Hangzhou pointed out: "In the capital market, the 'old brand' is a plus, and it has a high degree of recognition among investors. However, in the long run, whether a long-established enterprise can be recognized still depends on its 'value', and whether the enterprise can continue to create value and bring returns to shareholders. Investors will not always pay for 'feelings', which is a test of the innovation ability, execution and focus of long-established enterprises. Therefore, for these 'century-old stores', the listing is only a beginning rather than an end. ”