China Food

It is said that JUNLEBAO plans to raise $700 million in IPO. Will it be far from listing after breaking up with Mengniu?

Just now, Hong Kong media quoted foreign reports as saying that JUNLEBAO dairy is considering listing in both China and Hong Kong, and is expected to raise at least US $700 million (about HK $5.46 billion) in the IPO in Hong Kong.

According to the above information, JUNLEBAO originally considered listing in the mainland, but later began to consider IPO in Hong Kong. According to a person familiar with the matter, the share sale plan is still in its infancy, and the company may not promote the relevant plan.

In this regard, JUNLEBAO responded to xiaoshidai and said: “as for listing, the company has no relevant plan at present.”

As for the rumor that JUNLEBAO is seeking IPO in the A-share and Hong Kong capital markets, a person familiar with the capital market told xiaoshidai that due to the change of the actual controller of JUNLEBAO last year, “it will be three years before it can declare to be listed on the mainland A-share”. He believes that JUNLEBAO will be listed in a shares at least in 2023 or after.

Rumors of listing

In fact, after junle Bao “flies alone”, there is no lack of speculation in the industry that it is ready to go public.

Xiaoshidai introduced that in July last year, Mengniu Dairy announced that it would sell all the shares of Shijiazhuang JUNLEBAO Dairy Co., Ltd. at a price of more than 4 billion yuan. The buyouts of the two companies were 6926.6% and 24.6% respectively.

At that time, analysts quoted by Caixin International reported that the share sale was an effort made by the Hebei provincial government to strengthen the local dairy industry and promote the listing of JUNLEBAO. Penghai fund, one of the buyers of JUNLEBAO, is controlled by the Hebei provincial government.

Before the sale, Mengniu had held JUNLEBAO for nine years. According to data, on November 22, 2010, Mengniu Dairy announced in Beijing that it would hold 51% equity of JUNLEBAO at a price of 469.2 million, thus becoming the largest shareholder of JUNLEBAO.

However, Mengniu’s “ownership” is basically an investment at the equity level and does not involve specific business activities. The management of JUNLEBAO remains unchanged, and “JUNLEBAO” continues to operate as an independent brand.

Before Mengniu’s exit, JUNLEBAO had developed from a company with yogurt as its main business into a “10 billion scale” dairy enterprise. In 2018, it achieved annual revenue of 13 billion yuan, and its core business territory also expanded to infant milk powder, etc.

Introduction of new shareholders

After independence from Mengniu, a series of events have also been interpreted as the “prelude” of JUNLEBAO listing.

First, there is a document about the location of JUNLEBAO headquarters. In the implementation opinions of Hebei Provincial People’s Government on accelerating the revitalization of dairy industry (jzz [2019] No. 31) released in July last year, it was mentioned that “qualified dairy enterprises should be supported to use the capital market to list on the main board and the new third board for financing.”

It is worth noting that since this year, JUNLEBAO has also undergone two equity changes.

According to industrial and commercial data, Shijiazhuang Penghai venture capital fund (limited partnership) withdrew from JUNLEBAO shareholders before and after June 20 this year. The latter added new shareholders: Tianjin Ping An consumer technology investment partnership (limited partnership), Qiushi Xingde (Tianjin) Investment Center (limited partnership), Shanghai barmao investment management partnership (limited partnership), and Chunhua Shaojing (Tianjin) equity investment partnership (limited partnership).

Meanwhile, Wei Lihua, founder and chairman of JUNLEBAO, changed its shareholding ratio from 40.93% to 44.62%.

At that time, JUNLEBAO responded to xiaoshidai that it was the normal market behavior of shareholders. “Chunhua and Ping An are excellent investment institutions in the industry. They are full of confidence in JUNLEBAO’s future and will help JUNLEBAO develop better.” The company said.

Wei Lihua, President of JUNLEBAO Dairy Group

According to the industrial and commercial information, the shares held by other shareholders of Shijiazhuang JUNLEBAO Dairy Co., Ltd. are as follows: Ningbo Tanzhi enterprise management consulting partnership holds 15.26%; Chunhua Shaojing (Tianjin) equity investment partnership (limited partnership) holds 10.3%; Shijiazhuang Hongqi dairy factory holds 8.07%; Tianjin Ping’an consumer technology investment partnership (limited partnership) It holds 6.36% of the total shares, 3.81% of Zhuhai gaolingyuanying equity investment partnership (limited partnership), 3.81% of Qiushi Xingde (Tianjin) Investment Center (limited partnership), 3.18% of Shijiazhuang Penghao venture capital fund (limited partnership), 2.54% of Shanghai bamao investment management partnership (limited partnership), 1.42% of Shijiazhuang junqian Enterprise Management Co., Ltd Ningbo holding investment partnership (limited partnership) holds 0.64% shares.

In fact, on March 16 of this year, the investor information of Shijiazhuang JUNLEBAO Dairy Co., Ltd. also changed. Four new shareholders were newly introduced, namely, Zhuhai gaolingyuanying equity investment partnership, Ningbo Tanzhi enterprise management consulting partnership, Ningbo Youcheng investment partnership and Shijiazhuang Penghao venture capital fund. At that time, JUNLEBAO also responded that it was a normal equity transfer.

Among the above four new shareholders, there are the figures of hillhood capital and Sequoia Capital. At that time, Sequoia Capital announced that it would become the largest institutional shareholder of Shijiazhuang JUNLEBAO Dairy Co., Ltd. with a shareholding ratio of 15.26%, with an investment of more than 1.2 billion yuan.

2020 and the next five years

Compared with the impact on the capital market, JUNLEBAO may pay more attention to expanding and strengthening its business.

In January this year, JUNLEBAO released its latest goals for the next five years. Liu Senmiao, vice president of JUNLEBAO dairy group and general manager of milk powder division, said that in the next five years, JUNLEBAO milk powder will become a “global leading brand of infant milk powder”.

Talking about the target of 2020, Liu Senmiao said at that time that the annual production and sales volume were planned to exceed 100000 tons. JUNLEBAO said that on the one hand, it will continue to make efforts in channels, focusing on developing first and second tier cities. On the other hand, the pace of innovation will still be accelerated this year, and two “disruptive innovation” products are planned to be launched.

So far, JUNLEBAO’s milk powder business is progressing well this year.

According to the snack agent, in March this year, JUNLEBAO announced the launch of JUNLEBAO youcui, a long-standing organic milk powder. This is the first organic milk powder that uses the whole industry chain’s own farm fresh milk, moderately hydrolyzed protein and double probiotics, Liu said at the cloud product launch. He said that the new product was welcomed by the market after the trial sale, with orders exceeding 120 million yuan in the first month.

According to JUNLEBAO in April this year, since the Spring Festival, its milk powder production and sales have increased by more than 50% year-on-year. In addition, according to the company recently revealed that the flag brand production and sales in the first five months of this year increased by 60% year-on-year.

JUNLEBAO, which started with low-temperature yogurt many years ago, also has great ambition in this category.

“In the next five years, JUNLEBAO low-temperature yogurt will strive to be the first in China.” Jun Le Bao dairy group vice president, general manager of low temperature business unit Yang Hongbin said this year. It is revealed that JUNLEBAO’s market share of low-temperature yoghurt ranks among the top three in China in 2019.

In June of this year, JUNLEBAO set its sights on non additive yoghurt and announced the introduction of its pure yogurt formula without additives. At that time, Yang Hongbin said that in the future, he planned to deepen the layout of online channels and “build Chunxiang into a leading yogurt brand with sales of more than 500 million on tmall platform”.

In addition, JUNLEBAO also aimed at the low-temperature liquid milk market and launched its first fresh milk product “yuexianhuo” last year. Wei Lihua, President of JUNLEBAO dairy group, said at that time that “Xianhuo” was an important direction for the quality upgrading of China’s dairy industry in the future, and yuexianhuo was an innovative product in line with this direction.

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