On February 16, Anhui Golden Seed Winery Co.Ltd(600199) announced that the controlling shareholder of the company introduced important strategic shareholders and the two sides conducted long-term joint venture cooperation. The strategic shareholder is China Resources war investment.
Huarun enters Baijiu again
On February 16, Anhui Golden Seed Winery Co.Ltd(600199) issued a suggestive announcement on the company’s controlling shareholder’s plan to introduce strategic shareholders and equity structure adjustment. The announcement showed that in order to promote the deepening reform and high-quality development of state-owned enterprises, Fuyang investment and Development Group Co., Ltd. (hereinafter referred to as “Fuyang investment and development group”), the sole shareholder of golden seed group, the controlling shareholder of the company, intends to transfer 49% of the equity of golden seed group to China Resources (Group) by non-public agreement in accordance with the measures for the supervision and administration of state owned asset transactions of enterprises (Order No. 32 of SASAC and the Ministry of finance, hereinafter referred to as “Order No. 32”) and other laws and regulations China Resources Strategic Investment Co., Ltd. (hereinafter referred to as “China Resources war investment”), a wholly-owned subsidiary of the company. Fuyang investment and Development Co., Ltd. and China Resources zhantou signed the equity transfer agreement on Anhui Golden Seed Group Co., Ltd. on February 16, 2022.
Anhui Golden Seed Winery Co.Ltd(600199) industry said that after the transaction, the controlling shareholder of the company introduced important strategic shareholders and the two sides conducted long-term joint venture cooperation. This transaction will not lead to the change of the controlling shareholder and actual controller of the company. The controlling shareholder of the company is still golden seed group and the actual controller is still Fuyang SASAC. In addition, this equity transfer is a strategic reorganization between subsidiaries of central enterprises and local state-owned enterprises. It is proposed to adopt the method of non-public agreement transfer, which will take effect after being approved by relevant departments.
In terms of performance, recently Anhui Golden Seed Winery Co.Ltd(600199) announced that the company expects a net profit loss of 155 million yuan to 185 million yuan attributable to shareholders of Listed Companies in 2021, and a profit of about 69.4 million yuan in the same period in 2020. After deducting non recurring profits and losses, the company expects the net profit loss attributable to the shareholders of the listed company to be RMB 180 million to RMB 210 million in 2021 and about RMB 114 million in the same period in 2020.
For the reason of loss, Anhui Golden Seed Winery Co.Ltd(600199) said that the main reason for this loss is that the liquor product structure is in the adjustment stage, the sales of the second high-end products are relatively low, and the gross sales margin of the Baijiu is relatively low.
Today, the share price of Anhui Golden Seed Winery Co.Ltd(600199) rose by 10.03% to close at 17.33 yuan at noon, with a total market value of 11.4 billion yuan.
It is worth noting that in the afternoon of the 16th before the announcement, Anhui Golden Seed Winery Co.Ltd(600199) share price suddenly “took off from the ground” and closed the board directly. Some investors also questioned the early limit of Anhui Golden Seed Winery Co.Ltd(600199) yesterday afternoon.
Huarun Baijiu road
Statistics show that on September 3, 2008, China Resources war investment was registered and established. According to the announcement of listed companies, China Resources war investment is a wholly-owned subsidiary of China Resources (Group) Co., Ltd.
The strategic investment Anhui Golden Seed Winery Co.Ltd(600199) is not Huarun’s first participation in strategic investment in Baijiu. As early as 2018, Fenjiu Group, the controlling shareholder of Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) , signed a share transfer agreement with China Resources venture holding company Huachuang Xinrui. Its Huachuang Xinrui (Hong Kong) Co., Ltd. received Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) 99.15 million non tradable shares with a total amount of 5.16 billion yuan, becoming the second largest shareholder of Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) (with a shareholding ratio of 11.38%). Since then, Fenjiu has cooperated with China Resources entrepreneurship in terms of strategic layout, talent exchange, lean management and product linkage, and helped Fenjiu move from regional brands to the whole country through the advantages of distribution channels.
This cooperation can be said to be very successful. In the following three years, Shanxi Xinghuacun Fen Wine Factory Co.Ltd(600809) industry and stock prices increased one after another. According to preliminary calculation, China Resources owns 11.4% of its equity and can realize a net book income of more than 40 billion yuan.
In August last year, China Resources again announced its investment in Shandong Jingzhi liquor industry, which was disclosed on the official website of the Anti Monopoly Bureau of the State Administration of market supervision, Huarun wine holding Limited (Huarun wine) and Jiaxing Hui Hui Jin Ke equity investment partnership (limited partnership) (“Ding Hui investment”) intends to acquire a wholly-owned subsidiary of Jingzhi liquor company (Jingzhi liquor) of Shandong Jingzhi liquor company by means of capital raising by 60% of the total interest of Shandong Jingzhi Baijiu Co., Ltd. (Jingzhi Baijiu), which is a total of about $100. The company has acquired a total of about $100% of the total amount of shares in the Shandong Liquor Co.
Before trading, Jingzhi liquor owns 100% of Jingzhi baijiu. Huarun Baijiu Baijiu Baijiu liquor will hold 40% of the Jingzhi liquor. After the completion of the transaction, the 20% of the Jingzhi liquor will be held by the group. The Jingzhi liquor industry will have the remaining 40% stake in Jingzhi Baijiu, and the Huarun wine industry, Jingzhi wine industry and Ding Hui will jointly control Jingzhi Baijiu under the anti-monopoly law.
China Resources beer seeks business increment
At present, the beer market is highly competitive and has already entered the era of stock competition. As the leader of beer industry, Huarun is facing new competition in the fierce competition. Baijiu and liquor market are trying to find business increment.
At the same time, the price rise tide in the beer circle has already begun. China Resources beer, as the beer enterprise with the highest income in China, has long seized the market by means of low price. When the overall space of the industry peaked and contracted, it also began to reshape its strategy from 2017, build a “4 + 4” brand and promote the transformation of high-end.
Last year, China Resources beer launched the super high-end series beer “Li” priced at 999 yuan, which opened the imagination space of China’s super high-end beer for the first time.
In addition to the high-end line of products, the company previously disclosed in the semi annual performance report that the company will also pay attention to the development opportunities of suitable non beer and alcoholic drinks, explore potential synergy benefits and further expand its business through limited diversified development.
Analysts believe that this transaction is what China resources needs. Huarun needs to get business increments. Baijiu undoubtedly has potential for development and is also well received in the capital market. Huarun also has huge consumption demand for Baijiu itself. Anhui Golden Seed Winery Co.Ltd(600199) due to the decline in volume in recent years, China resources can use it to solve the problems of expanded capital, brand and channel, and speed up the process of high-end and nationalization.
