13 Years In Violation Of Langjiu Shares IPO To Bloom

The Sichuan Langjiu Limited by Share Ltd, the flagship "Lang" brand liquor, disclosed the prospectus on the official website of the SFC in June 5th, and plans to go to the Shenzhen Stock Exchange.

The "Lang" liquor brand is famous for its place. The main production base of Langjiu shares is located in Erlang Town, Gulin County, Sichuan province. From the Erlang town to the upper reaches of Maotai Town, the 49 kilometer Chishui Valley is recognized as one of the world's most influential liquor growing areas with potential growth and development potential.

It is worth mentioning that at present, Sichuan has Wuliangye, 000858.SZ, Luzhou Laojiao (000568.SZ), wine making (600702.SH) and Shuijingfang (600779.SH) four listed liquor enterprises, coupled with Langjiu and Jiannanchun, known as the "six Golden Flowers" of Sichuan liquor, now only the Langjiu and Jiannanchun have not yet landed in the capital market.

If A shares are successfully sprinted, Langjiu shares will become the fifth listed wine companies in Sichuan.

In opposition to IPO13

This is the third IPO plan of Langjiu shares in the past 13 years.

In 2007, Langjiu sold the listing plan, but 13 years later, the listing of Langjiu shares was late.

As early as 2007, Langjiu planned IPO, but the scale and performance constraints led to a premature listing. The company suspended the listing plan.

In 2009, the demand for liquor driven by the growth of fixed asset investment rose sharply, and the volume of liquor manufacturers generally expanded rapidly, and the industry was highly prosperous. In those days, Langjiu shares were included in the list of the first batch of enterprises listed in Sichuan provincial finance office in 2009, which was listed in Sichuan's key listing. However, during the period from 2010 to 2011, the business of Langjiu shares ushered in a big outbreak. However, since 2012, the domestic economic growth rate has entered an adjustment period, coupled with the government's restriction on three public consumption and the prohibition of liquor prohibition. The two factors superimposed the whole industry volume and price down and wine. Business performance has declined significantly, or even negative growth. Its plan to restart IPO has failed for the second time.

After 2016, the main driving force of liquor demand was changed to the continuous growth of per capita disposable income, and the output of liquor increased and the price was also driven by the high-end liquor. Against this background, Langjiu shares seek to go public at third degrees.

In the three year action plan of the 100 billion liquor industry in Luzhou (2018-2020 years) introduced in June 2018, the Luzhou municipal government put forward "to build up three leading faucets of Luzhou Laojiao, Langjiu and Sichuan wine", and clearly put forward the action goal of "Langjiu joint stock company's successful listing and main business breaking through 20 billion yuan".

According to the prospectus disclosed by the Langjiu share, it shows that In 2017 -2019, the revenue of Langjiu shares was 5 billion 116 million yuan, 7 billion 479 million yuan and 8 billion 348 million yuan respectively, of which, in 2018 and 2019, the revenue grew 46.18% and 11.62% respectively; the net profit attributable to shareholders of the parent company in the three years was 302 million yuan, 726 million yuan and 2 billion 444 million yuan respectively, of which 2019 net profit increased by 236.54%.

Chinese food industry analyst Zhu Dan Peng believes that "Langjiu" is the leader of China's Maotai flavor liquor second legion, its body volume is close to ten billion, because of historical reasons, it has not been listed, and the popularity of Maotai flavor liquor will definitely be sought after by the capital side. However, we found in the visit market that the price of products is more chaotic, if it is in the market, channel, client. If we can do better, there will still be room for improvement in the future. "

The story behind "Lang" brand

It is worth mentioning that during the restructuring period, Langjiu group, the controlling shareholder of Langjiu group, acquired all the tangible assets but failed to obtain the most important intangible asset, trademark ownership.

As of the prospectus day, Langjiu shares have 532 domestic trademarks, and the prospectus also details the "Lang" trademark change story.

When the system was restructured in 2002, the rights and interests of the intangible assets of Langjiu group were not included in the property appraisal scope of Langjiu group according to the property rights change plan of Langjiu group, which was formulated by the state capital of Gulin county. The subsidiary agreement of the above scheme, the license contract for the use of intangible assets, is separately stipulated: Gulin's state-owned assets will own the trademark, goodwill, know-how and production license of Langjiu Group owned by them. License, franchise and so on. The exclusive license of the Langjiu group, which is owned by Bao Guang group, is 2 million 500 thousand yuan in 2002. The license fee for intangible assets is collected according to the annual sales revenue of liquor sales, which is 1% higher than that of the previous year. When the liquor sales revenue of Langjiu group reached 600 million yuan, Bao Guang group had 10% of the intangible assets ownership. The annual sales of liquor sales increased by 100 million yuan. The corresponding increase of 5% of the intangible assets ownership of the group was, therefore, no more than 30% of the ownership.

In November 18, 2009, the state owned assets of Gulin signed a supplementary agreement with the shareholders of the group of Langjiu group: the two sides confirmed that Bao Guang Group owned 40% of the intangible assets in accordance with the "intangible asset licensing contract". According to the value of 7 billion 600 million yuan announced by the world brand laboratory in 2008, Gulin's state-owned assets have 4 billion 600 million yuan value, and the value of 3 billion yuan. At the same time, the two sides further agreed that since January 1, 2009, the value added value of intangible assets such as trademarks will be owned by the brand investors.

In December 11, 2009, the Gulin County People's government issued a reply on the agreement that the 133 trademarks should be freely allocated to the Gulin County Long Sheng Investment Limited, agreeing to transfer the "Lang" brand of 133 registered and awaiting trademark free payments to the state-owned sole proprietorship company established in Gulin.

Accordingly, according to the "intangible asset licensing contract", Bao Guang group obtained 40% stake in the investment of Junsheng, and thereafter, according to the supplemental agreement, it acquired another 40% equity interest in the investment, and altogether held 80% stake in the investment.

When it was reorganized in November 2016, Bao Guang group transferred its 80% stake of Jiu Sheng Investment to 400 thousand yuan to Langjiu shares, the main asset being Lang brand trademark and Gulin state capital giving up the right of preemption.

Since then, the situation is that in November 6, 2017, Langjiu shares signed a partnership agreement on trademark licensing with Jiu Sheng Investment Company, which agreed that the application, registration, maintenance, renewal and other related matters of all trademarks needed by the company were responsible for the registration, maintenance, renewal and other related matters. As the owner of "Lang" Trademark No. 230457, it may be responsible for the value of "Lang" and its serial trademarks. Such cases as trademark objection, cancellation, invalid application, etc. The successful trademark of Jiu Sheng investment is licensed by the company and its controlling subsidiary. Moreover, without the company's consent, Jiu Sheng Investment shall not transfer the trademark rights registered under its name to third people; no renewal of registration shall be waived; no trademark may be applied for cancellation, and the company shall not be allowed to use the trademark legally. The time limit for cooperation between the two sides is from January 1, 2017 to December 31, 2026, and the extension can be automatically postponed for 10 years.

Accordingly, Langjiu shares pay annual license fees to Jiu Sheng Investment in accordance with 1.2% of the audited liquor sales amount each year. Every year before April 30th, the company will make a written investment in the amount of liquor sold by the company in written form before the contract comes into force. After confirmation by both parties, the company will pay the license fee for the last year to the investment company.

Does the ownership of these trademarks constitute a potential obstacle to IPO of Langjiu shares?

In this regard, sponsors and lawyers admitted in the prospectus that there was a procedural defect in the ownership of the "Lang" brand. However, in view of the authorization of the Sichuan provincial SASAC and the confirmation of the Luzhou Municipal People's government and the Gulin County People's government, the sponsors believe that the blemishes do not have a substantive impact on the legitimate validity of the 80% stake of the group.

On the question of trademark rights, in June 8th, the economic report reporters repeatedly called the public telephone of the shares of Langjiu in twenty-first Century, but no one answered.

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