Bingfeng Beverage intends to be listed on the Shenzhen Stock Exchange, but the company's single products, sales area concentration and health and safety issues need to be paid attention to.
On July 9, Xi'an Bingfeng Beverage Co., Ltd. (hereinafter referred to as Bingfeng Beverage) submitted a prospectus to the Shenzhen Stock Exchange, which is expected to issue no more than 60 million shares, accounting for 25% of the total share capital after the issuance, raising 669 million yuan.
However, the prospectus also shows that the operating performance of Bingfeng Beverage in 2020 is not prominent, the operating income increased by 10.07% year-on-year, and the net profit attributable to the mother fell by 15.99%, and there is a situation where the income is not increased. In addition, public information also shows that Bingfeng Beverage is heavily dependent on the Shaanxi market, the product structure is relatively single, the return on net assets is declining year by year and there are health and safety problems.
The discovery network sent a research letter to Bingfeng Beverage for explanation on the above issues, but as of press time, Bingfeng Beverage had not given a reasonable explanation.
The market is concentrated in a single category, and the increase in revenue does not increase profits
Public information shows that Bingfeng soda is a long-established brand in Shaanxi, the earliest can be traced back to 1948, when a businessman introduced a set of soda manufacturing equipment from Tianjin to Xinjiang, due to heavy snow, stayed in Xi'an, in the local East Avenue Machangzi built Xi'an's first soda factory - Northwest Soda Factory, specializing in the production of "foreign gas water".
As the forerunner of carbonated beverages in China, Bingfeng Beverage has experienced more than 70 years. "Cool skin, meat sandwich steamed buns, and then a bottle of ice peak" is known as "Sanqin Set Meal" in the folk, "this taste is very Xi'an" and "drink it from childhood" The brand image is deeply rooted in the hearts of the people.
Because of the love of Xi'an locals for Bingfeng drinks, the sales volume of Bingfeng drinks exceeds 100 million yuan per year, but the revenue of Bingfeng drinks depends on orange flavored soda. According to the prospectus, the product categories of Bingfeng Beverage include carbonated drinks, plant beverages, flavored drinks and tea beverages, etc., and the main products are "Bingfeng" glass bottle orange flavored soda, canned orange flavored soda, glass bottle sour plum soup, canned sour plum soup, etc.
From 2018 to 2020, the actual output of ice peak beverage glass bottle orange flavored soda was 155 million bottles, 146 million bottles and 134 million bottles, with revenue of 96.71 million yuan, 93.9 million yuan and 92.02 million yuan, respectively; the actual output of canned orange flavored soda was 0.99 billion cans, 106 million cans and 120 million cans, with revenue of 150 million yuan, 159 million yuan and 178 million yuan, respectively; the gross profit margin of glass bottle orange flavored soda was 58.48%, 57.17% and 57.59% respectively.
Source: Prospectus
During the same period, Bingfeng Beverage achieved total operating income 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; the overall gross profit margin was 49.81%, 50.67% and 46.73%.
The revenue of the first major category of Bingfeng beverages, orange-flavored soda (glass bottles and cans), accounts for more than 80% of the company's overall revenue, while the revenue contribution of the second type of product sour plum soup (glass bottles and cans) is only more than 10%, and the proportion of other beverage revenue is relatively low.
Source: wind
In addition, the sales area of Bingfeng beverages is also relatively concentrated. Because it is a long-established brand in Shaanxi, the revenue achieved by Bingfeng Beverage in Shaanxi Province is 249 million yuan, 245 million yuan and 266 million yuan respectively, accounting for 87.44%, 81.73% and 80.23% of the total revenue of Bingfeng Beverage. Bingfeng Beverage said in the prospectus: "There is a certain risk of concentration in the sales area. To a certain extent, it restricts the development of the company's future outward expansion business. 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. ”
It is worth noting that the return on net assets of Bingfeng Beverage from 2018 to 2020 is 35.01%, 35.1% and 25.09% respectively. For the decline in the return on net assets, Bingfeng Beverage explained in the risk tips of the prospectus: 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.
Glass bottles have health and safety issues, and fundraising projects are in doubt
According to the prospectus of Bingfeng Beverage, of the 669 million yuan to be raised by the company in this IPO, 199 million yuan is intended to be used for the renovation and expansion project of the glass bottle production line, and 40.3299 million yuan is used for the construction of the information management platform, of which more than 60% of the funds - 430 million yuan will be used for the company's marketing service network upgrade and brand construction project.
Of the 430 million yuan, Bingfeng Beverage plans to invest 42% of its funds in brand building. According to the use of the raised funds, Bingfeng Beverage intends to invest 181 million yuan in promotion costs, and plans to complete the investment within three years, mainly in traditional media promotion, Internet and mobile Internet promotion, image advertising promotion, etc., of which the total investment in the first year is 45.5 million yuan, the total investment in the second year is 59.5 million yuan, and the total investment in the third year is 75.5 million yuan.
Although in the fundraising plan, Bingfeng Beverage has repeatedly emphasized the importance of brand promotion to the company's competitiveness, but the prospectus of Bingfeng Beverage shows that from 2018 to 2020, the advertising expenditure of Bingfeng Beverage was 9.4172 million yuan, 6.1319 million yuan and 5.6664 million yuan, respectively.
Among them, the expenditure on print media accounted for the majority, and the advertising expenditure was 4.2183 million yuan, 1.4016 million yuan and 2.3461 million yuan, accounting for 44.79%, 22.86% and 41.40% respectively. In 2020, Bingfeng Beverage's advertising expenditure on electronic media was 1.049 million yuan, accounting for only 18.51%.
During the reporting period, the advertising expenditure of Bingfeng Beverage has been in a continuous downward trend, of which the advertising expenditure in 2020 is only about 60% of that in 2018. Judging from the promotion cost of 75.5 million yuan that the company intends to invest in the third year of fundraising, the cost of brand promotion proposed by Bingfeng Beverage in one year is much higher than the company's net profit in 2018 and 2020, and it is also comparable to the net profit of the whole year of 2019. The move has also raised questions from investors about the reasonableness of Bingfeng Beverage's fundraising project.
In addition, for glass bottle drinks, the recycling of glass bottles has always been the focus of consumer attention. On July 15, 2020, a netizen exposed that he found stains on the mouth of the glass bottle when drinking Bingfeng drinks. "When I was eating, I ordered a bottle of Ice Peak, just inserted a straw and drank a sip, and found that there were many stains and rust marks at the mouth of the bottle, the bottle itself is recycled, and I don't know how to deal with it after recycling." In this case, the staff of Bingfeng Beverage said that it was caused by improper storage by the distributor.
Source: Weibo
For food safety risks, Bingfeng Beverage said in the prospectus that the company strictly abides by the relevant laws and regulations and standards of national food safety and health food, and the quality control system is sound. However, for the existing health and safety problems, Bingfeng beverages still need to pay attention. At the same time, If Bingfeng Beverage wants to go out of Shaanxi and open up the national market, it also needs to solve the problems of single products, concentration of sales areas and rationality of fundraising projects.
(Discovery network reporter Luo Xuefeng intern reporter Cao Xiaoqi)