"Chicken King" Continues To Talk About The Myth Of "Dairy" Capital. Is Yiming Food A A Blockbuster?

Zhejiang Yiming food Limited by Share Ltd (hereinafter referred to as Yiming food), based on more than 1500 "Yiming real milk bar" based on Jiangsu, Zhejiang and Shanghai, disclosed the draft prospectus in December 20th and launched a sprint to A shares.

According to the prospectus, Yiming food intends to apply for no more than 61 million shares in the main board of the Shanghai Stock Exchange, raising 927 million yuan, investing in marketing network direct milk bar construction project, Jiangsu Yiming food production base project, annual output of 30 thousand tons of baked products new projects, R & D centers and information construction projects.

The dairy company from Wenzhou, Zhejiang, mainly produces low-temperature yogurt and low-temperature fresh milk, and sells baked foods, calling itself the development mode of "central factory + chain store".

In the 2016-2018 year, Yiming food business income was 1 billion 250 million yuan, 1 billion 520 million yuan, 1 billion 750 million yuan, compound annual growth rate of 18.29%, net profit for the same period were 149 million yuan, 119 million yuan, 157 million yuan.

In the first half of 2019, its performance data were also considerable, achieving a profit of 919 million yuan and a net profit of 84 million 450 thousand yuan.

Then, Yiming food, which was founded in 2005 and has been ploughing Zhejiang for 14 years, can make a blockbuster in the A share market?

1524 "real milk bar" contributed 70% revenue

Zhu Mingchun, founder and real controller of Yiming food, was not a dairy product at the beginning. His more familiar status was "chicken king".

Prospectus shows that in 1980s, Zhu Mingchun began to engage in poultry breeding business, inventing and promoting the "shallow cage high-density feeding technology", the people's daily as "national chicken king." Until 1992, he began to engage in dairy processing and marketing business; he founded Yiming food in September 2005 and served as chairman of the board in July 2017.

Yiming food products are mainly low-temperature fresh-keeping or short shelf life foods. Among them, the shelf life of low-temperature fresh milk usually does not exceed 15 days. Baking food is also characterized by fresh and short warranty, and its shelf-life usually does not exceed 4 days.

Speaking of the sharp difference from other dairy enterprises, it is the "Yiming real milk bar" that spreads all over East China.

"Yiming real milk bar" is a food chain store opened by Yiming food in 2002, selling dairy and baked food, starting from Wenzhou, and expanding its market outside Zhejiang in 2006. Now it has entered Jiangsu, Shanghai and Fujian.

As of the first half of 2019, Yiming food has set up 1524 "Yiming genuine milk bar" in Zhejiang, Jiangsu, Fujian and Shanghai in eastern China (302 stores, 1222 stores).

Yiming believes that compared to the "central factory + wholesale distribution" mode represented by Xu Fu Ji, peach and plum bread, or the mode of "chain store + on-site production" represented by bread new words and 85 degree C, "Yiming real milk bar" is a sales channel innovation relative to the traditional wholesale zero and Shang Chao channels, forming a differentiated competition between "central factory + chain store".

Data show that milk bar has become the "main force" of Yiming food revenue. In 2016 -2019 1-6, the sales revenue of its store outlets accounted for an average of 72.76% of the main business revenue, and the average income of non store outlets was 27.24%.

In addition to store outlets, Yiming food also supplies products to customers such as breakfast shops and schools through distributors, and supplies products to merchants super group and group buying customers through direct sales.

In addition, Yiming food has tried to put vending machines from the second half of 2016. By the end of 6 2019, Yiming food has put more than 1000 vending machines in Wenzhou and Hangzhou. In 2018, the channel achieved operating income of 51 million 527 thousand yuan.

However, it needs to be pointed out that Yiming food is highly dependent on the Zhejiang market.

Prospectus mentioned that the company's current production base is still mainly in Wenzhou, Zhejiang, limited by fresh, short warranty food sales radius, in the first half of 2016 -2019, the Zhejiang market revenue accounted for 92.33%, 90.84%, 89.75% and 87.79% respectively.

"Low temperature milk is more demanding for cold chain logistics than fresh milk at normal temperature, so the regional characteristics are more obvious," a dairy industry source told the twenty-first Century economic news reporter.

Loss of 11 wholly owned subsidiaries

In addition, compared with the sustained growth of Yiming's parent company's performance, more than half of its subsidiaries are not optimistic.

Prospectus shows that as of the first half of 2019, Yiming food has 22 wholly-owned subsidiaries, of which 11 subsidiaries in 2019, 1-6 months net profit is a loss.

It is worth mentioning that in twenty-first Century, the economic news reporter found that in the course of the development of the company, Yiming food had a description of other matters, which mainly explained the company's "milk donation card promotion activities".

Before 2016, Yiming food had launched a campaign to give milk and gift cards to specific employees, employees, friends, distributors and franchisees. The participants could receive a certain amount of consumption card coupons or one-year milk service after paying one year's activities. After the expiration of one year, they could be refunded or renewed.

"The above promotional activities took place before 2016. At the end of 2015, the balance of the outstanding activities amounted to 19 million 648 thousand yuan, involving 950 participants. From the second half of 2015, the new promotion of the activity was stopped. In 2016, the expiry of the above activities was gradually refunded. Yiming food said in the prospectus.

Yiming food explained that due to the large number of returned staff, in order to facilitate operation and improve the efficiency of refund, the company first allocated the due money that was required to be returned every week to the individual employee Kane, and then the employee returned the money one by one to the participants, which resulted in the refund of funds through the employee's personal card.

Yiming food also stressed that "there is no case of embezzlement and appropriation of refund funds, and there is no litigation dispute". It has also been certified by the office of the leading group of illegal funds raising work in Pingyang and the Coordination Office of Wenzhou local financial supervision working group, confirming that its activities "do not constitute illegal or illegal activities, and do not belong to the illegal absorption of public deposits, the absorption of public deposits in disguised form, the accumulation of funds to defraud, the unauthorized publicity or the issuance of securities in disguised form."

At the same time, as a food enterprise, environmental protection and food safety are still a major concern of Yiming food.

Prospectus shows that Yiming food's wholly-owned subsidiary of ridge food has been punished for environmental protection.

In the two environmental protection inspection in November 2016, because of the discharge of chemical oxygen demand (COD) of the effluent discharged from the ridge farms exceeded the emission standards prescribed by the state, it was issued by the Environmental Protection Bureau of Zhenhai District, Ningbo, the decision on administrative penalty (135) in the town ring (135) and the "continuous penalty decision" (1 days in the town ring, 2017). The fine food on the ridge was fined 14 thousand yuan and ordered to be corrected, a fine of 28 thousand yuan and ordered to correct.

However, it is worth noting that, for some reason, the food on the ridge has been cancelled in December 2017.