Dairy Assets Impact IPO "Jun Yao Department" A Shares Territory Expansion

The Limited by Share Ltd, known as "Yao Yao health" in Hubei, will be accepted by the SFC's first trial in July 2, 2020. It will launch a sprint to the first stock of lactic acid bacteria beverages.

As early as May 24, 2019, Jun Yao health disclosed the prospectus for the first time. However, in July 26th of that year, the SFC issued the latest IPO audit.

In this regard, Jun Yao Health told the media that it had been implicated in the Rui Hua accounting firm, which was involved in the financial fraud case of Kang De Xin, thereby suspending IPO.

IPO half a year after pressing the pause button, in April 9, 2020, Jun Yao's health again sprint A shares, to be landed at the Shanghai Stock Exchange. But this time, it changed the accounting firm from the accounting firm of Ruihua to Dahua accounting firm.

Prospectus shows that before this issue, Jun Yao group holds 140 million shares of Jun Yao health, accounting for 39.01%, and is the controlling shareholder of the company. Wang Junjin directly owns the 28.89% share of Jun Yao's big health, and indirectly controls the 39.01% share of Jun Yao's big health by holding the Jun Yao group. It controls 67.9% of the total health drinks of Jun Yao and is the real controller of the company.

The prospectus shows that Jun Yao group also owns three A shares listed companies, namely, 603885.SH, 600643.SH and 600327.SH. If all Yao's health is listed successfully, the A share market of Jun Yao group is expected to expand to four.

More than 97% of the revenue comes from ambient temperature Lactobacillus drinks.

Jun Yao health is mentioned in the prospectus. In 1998, the company's predecessor, Jun Yao group Dairy Co., was established and inherited the group's dairy and milk beverage business, specializing in the research, production and marketing of dairy products and milk drinks.

Since 2011, Jun Yao health has launched the "flavor power" lactic acid bacteria products at ambient temperature, thus entering the market of lactic acid bacteria at normal temperature. It is one of the earliest brands of lactic acid bacteria produced and sold at home.

According to European international data, in 2019, the market share of retail products in the Chinese mainland's lactic acid beverage market was about 15.1%.

However, brands such as Yoro, Xiao, Xiao Yang, 600887.SH and 600597.SH have also entered the market of lactic acid bacteria at ambient temperature, and the market competition is fierce. In 2016, the brands of lactic acid bacteria reached about 100 at ambient temperature. After entering 2017, some dealers operated their own brands and small factories through the way of subcontracting, and the number of brands increased further.

At present, in addition to the health of Jun Yao, the main brand drinks in the industry include the "Yue Le multi lactobacillus beverage" of Dong Jun dairy (Yucheng) Co., Ltd. Fujian good color head food Limited by Share Ltd's "small sample yogurt", "Xiao Yang lactic acid bacteria" of Xiao Yang biological dairy group, "Chang Yi 100% lactic acid bacteria beverage" of Yili shares, Guangming dairy's "bright plant vitality Lactobacillus", and Dongying early morning Dairy Co., Ltd.'s "more and more lactic acid bacteria drinks".

From the performance point of view, in 2017 -2019, the average health revenue of Jun Yao was 1 billion 146 million yuan, 1 billion 287 million yuan and 1 billion 246 million yuan respectively, and the net profit attributable to shareholders of the parent company was 227 million yuan, 281 million yuan and 304 million yuan respectively.

Jun Yao Health said that the revenue decline in 2019 was mainly due to the increasing market competition of lactic acid bacteria at ambient temperature, the sales of products in the market, the sales of core products and other new products.

In the past three years, the main contribution to health income of healthy Yao mainly came from the series of Lactobacillus drinks at ambient temperature. In 2017 -2019, the sales revenue of lactic acid bacteria beverage reached 1 billion 134 million yuan, 1 billion 257 million yuan and 1 billion 188 million yuan respectively, accounting for 99.02%, 97.71% and 95.37% of all main business income.

In response to the risk of "a relatively simple product range", Jun Yao said that "the company has continued to research and develop new products for other dairy drinks, combined with consumer tastes and habits, to launch more abundant product lines at the right moment", launched "body relaxed" herbal plant drink and sweet milk milk beverage, and launched a new upgrading and upgrading power in 2019. Qinling milk flavor drink and 6 kinds of nuts of Jun Yao.

In terms of production mode, Jun Yao's health is combined with its own factories and the production of representative factories. However, as of the prospectus day, Jun Yao health is still cooperating with the 11 foundries, and the dependence on the manufacturers is still high.

According to the data, in 2017 -2019, the proportion of foundries produced by Jun Yao's healthy flavor power and normal temperature lactic acid bacteria drinks accounted for 62.81%, 39.96% and 35.27% of the output of the company respectively.

In this regard, Jun Yao Health said that it intends to gradually reduce the proportion of the output of the factory, and has increased its own capacity and output ratio by investing in new factories and upgrading the existing production lines.

The IPO is expected to raise 1 billion 199 million yuan, and Jun Yao health will also focus on its own factory projects, including the large health drink of Jun Yao, the new annual production of Hubei Yichang industrial base, the annual production of 100 thousand tons of fermented milk drinks at regular temperature and the project of the science and innovation center, the expansion of the Zhejiang Yao industrial base, the annual output of 100 thousand tons of fermented milk drinks.

It is worth mentioning that at present, regulators are inclined to audit the listing and refinancing of Hubei enterprises. Before the trial meeting, the Commission also brought the new crown epidemic impact on enterprises into the links of the examination and inquiry.

In the prospectus, "Yao Yao Da health" said, "as a production enterprise in Yichang, Hubei, the company is affected by the new crown pneumonia epidemic. The company's production and operation and financial status have been affected, mainly concentrated in logistics, postponed and resumed work. It is expected to be mainly reflected in the first quarter of 2020, especially in February. At present, the company's own factories and all the regional OEM factories have been resumed production. It is expected that the epidemic will not have a significant adverse impact on the company's ability to continue operating and issuing conditions.

"We have contacted Wang Junyao's Queen Ying Ying."

In May 2019, when Yao's health first disclosed the prospectus, the market also noted that there was a "small shareholder who could not make shareholders' rights and fail to fulfil their obligations" in the "risk factor" of "Jun Yao" big health, pointing directly to Wang Ying Ying, a small shareholder holding 675 thousand shares and holding a shareholding ratio of 0.1875%.

The prospectus shows that Wang Yingying is the daughter of Wang Junjin, niece and daughter of Wang Junyao, a big health real controller in 2004. In January 27, 2011, Wang Yingying inherited his 0.1875% stake and became a shareholder of Jun Yao's health because of the death of former shareholder Wang Junyao.

Since then, Jun Yao health has undergone many changes in stock rights. It issued a notice of shareholders' meeting in accordance with relevant regulations to all shareholders including Wang Yingying, but Wang Yingying has not responded to it and has not attended the relevant meetings.

In the prospectus for May 2019, Jun Yao said, "for the issue of the issue, the issuer has tried to contact Wang Yingying through various channels. However, many attempts failed. Wang Ying Ying did not attend the relevant meetings, nor did he vote or sign it. Since the issue of this issue has already fulfilled the statutory internal decision-making process, Wang Yingying, a shareholder with 0.1875% shares, will not have a substantive impact on the outcome of the meeting. However, if it requests other requests beyond the issue, there may be risks that may affect the audit process.

However, in twenty-first Century, the economic news reporter found that the statement in the prospectus in April 2020 had changed. "Yao Yao health has already contacted Wang Yingying, and he has yet to comment on the issue."

Then, how is the progress of the relationship between Jun Yao's health and Wang Ying Ying? In June 29th, the economic report reporters on twenty-first Century called the big Yao Health Affairs Department of the Jun Yao, which indicated that they would reply by mail, but no reply was received as of press release.

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