Wufangzhai, a century old brand, has made new progress in sprint A shares. According to the announcement of the CSRC, Zhejiang wufangzhai launched at the meeting on January 13. If the IPO is successful, wufangzhai is expected to become the “first share of zongzi” of a shares.
Wufangzhai zongzi has a long history. Statistics show that more than 600 years ago, “Jiahu fine dots” created the Jiangnan dessert school and was famous in China, especially zongzi. In 1921, the first wufangzhai zongzi store opened on the 6th of zhangjianong, the busiest place in Jiaxing at that time. In 1992, Jiaxing wufangzhai zongzi company was established. In 1998, Jiaxing wufangzhai zongzi company was reorganized as a whole. At the same time, Jiaxing Department store and Jiaxing meat center were absorbed as co sponsors to establish Zhejiang Wufangzhai Industrial Co., Ltd.
Now, this century old store is sprinting A shares. According to the updated prospectus pre disclosed by wufangzhai on November 29 last year, the company plans to be listed on the main board of Shanghai Stock Exchange, raising about 1.056 billion yuan.
The actual controllers of wufangzhai are Li Jianping and Li Haojia’s father and son. According to the prospectus, wufangzhai group directly holds 40.36% of the company’s shares and indirectly holds 9.7% through its wholly-owned subsidiary ocean decoration, holding 50.06% of the company’s shares in total. It is the controlling shareholder of the company. Li Jianping and his son together hold 40% of the shares of wufangzhai group.
As a century old store, wufangzhai is one of the first batch of “Chinese time-honored brand” enterprises in China. The main products of wufangzhai include zongzi, moon cakes, dumplings, cakes, egg products, other rice products, etc. Among them, zongzi, the core business, has a market share of more than 20% in China in 2020, ranking first in the list.
According to the prospectus, from 2018 to the first half of 2021, the operating revenue of wufangzhai was RMB 2.423 billion, RMB 2.507 billion, RMB 2.421 billion and RMB 2.136 billion respectively, and the net profit attributable to the parent company was RMB 97 million, RMB 163 million, RMB 142 million and RMB 306 million respectively.
It can be seen that the operating revenue of wufangzhai was basically the same from 2018 to 2020, but there was a significant increase last year. Among them, zongzi business accounts for nearly 70% of the total revenue.
However, the sales volume of wufangzhai zongzi series products has decreased year after year. From 2018 to 2020, the company sold 424 million zongzi, 411 million zongzi and 363 million zongzi respectively. However, things improved last year. In the first half of last year, the sales volume of wufangzhai zongzi was 423 million.
Moon cake series is another growth category of wufangzhai except zongzi. Its revenue increased from 155 million yuan in 2018 to 185 million yuan in 2020, but its revenue accounted for no more than 10%.
Zongzi not only creates performance for wufangzhai, but also brings many business risks.
Wufangzhai said in the prospectus that since the company’s main products are traditional festival foods such as zongzi, there are obvious seasonal characteristics. In addition, in addition to the habit of eating zongzi all year round in the Yangtze River Delta and other places, zongzi belongs to low-frequency consumer goods in other parts of the country, which also leads to wufangzhai’s high dependence on the East China market. From 2018 to the first half of 2021, the revenue from East China accounted for 63.23%, 61.45%, 55.82% and 54.67% of the company’s main business revenue respectively.
In recent years, more and more food companies have begun to set foot in the field of zongzi. The zongzi industry has formed three legions, namely the traditional time-honored enterprises represented by wufangzhai and Guangzhou Restaurant Group Company Limited(603043) and the traditional salty and sweet zongzi sold by time-honored brands and good quality; The national food giants represented by Sanquan and missing occupy important channels such as supermarkets with quick-frozen food; There are also online Red brands represented by Xi tea, Naixue and Starbucks, which have won a large number of fans for their strange taste and interesting appearance.
Lai Yang, executive vice president of the Beijing Institute of business economics, said that in the face of increasingly crowded tracks, even though wufangzhai has a strong first mover advantage, it still can’t rest easy.
At present, there are nearly 50 “time-honored” listed companies in the A-share market, including Kweichow Moutai Co.Ltd(600519) which ranks first in the market value of A-shares and China Quanjude(Group) Co.Ltd(002186) which is on the decline; Or become a giant, or withdraw from the market, or the scenery is silent for a long time. Whether wufangzhai can land in the A-share market as desired, investors may wish to wait and see.
(source: readchuang)
