COFCO's whole industry chain: 6 listed companies fall into performance quagmire

Introduction: Recently, the listed subsidiaries of COFCO group successively issued 2012 performance forecast, and its six listed companies fell into performance quagmire Previously, COFCO took over the Wugu Daochang also was exposed to poor management What's the matter with COFCO group, which is known as the whole industry chain? No matter whether it's directly entering the instant noodle market in the main grain market or holding Mengniu to enter the highly competitive dairy market, a series of mergers and acquisitions conducted by Ning Gaoning, director of COFCO group in that year, set a golden signboard for "COFCO whole industry chain" However, in the past three years, with the increase of loss business sectors, COFCO's whole industrial chain seems to be just looking beautiful GWP recently, the listed subsidiaries of COFCO group successively issued 2012 performance forecast, and its six listed companies fell into performance quagmire Previously, COFCO took over the Wugu Daochang also was exposed to poor management What's wrong with COFCO group, which has been known as the whole industry chain? In the context of many business development difficulties, whether COFCO Group continues its previous expansion is attracting attention GWP listed companies have been mired in performance mire since 2012, the main chain of COFCO's whole industrial chain has encountered difficulties GWP reported that up to now, COFCO has 4 listed companies in Hong Kong, including China food (00506 HK), COFCO Holdings (00606 HK), Mengniu Dairy (02319 HK), COFCO packaging (00906 HK), and COFCO Tunhe (600737 SH), COFCO real estate (000031 SZ) and COFCO bio chemical (000930 SZ) Recently, our reporter learned that in addition to COFCO packaging, COFCO's other six listed companies are mired in performance According to our reporter, the edible oil business of COFCO group is roughly divided into two parts: one is the pressing of soybean and rapeseed at the front of the industrial chain, which is put in COFCO holdings; the other is the sales of small packages of edible oil such as Fulinmen, which is put in Chinese food GWP say your point: is COFCO swollen? On February 1, China Grain and oil holding issued a statement that: "compared with December 31, 2011, the group's comprehensive net profit in 2012 will be significantly reduced, but the decline is significantly narrowed compared with the medium term." Then on February 6, China food also issued a profit warning saying that its comprehensive net profit in 2012 fell sharply year on year Affected by the news, Chinese food shares fell 13.66% on the same day GWP's edible oil business is facing the dilemma of declining net profit, and COFCO's tomato sauce business is in a mess Previously, on January 21, the performance forecast released by Tunhe of COFCO showed that after preliminary calculation by the company's financial department, it is expected that the operating performance in 2012 will suffer losses, and the net profit attributable to shareholders of listed companies will be - 700 million yuan to - 770 million yuan According to this calculation, the loss of Tunhe in the fourth quarter of COFCO reached more than 500 million yuan As a matter of fact, in addition to the group's traditional business performance, the merger of Wugu Daochang and Mengniu Dairy, which Ninggaoning had operated with one hand, has become COFCO's embarrassment Since the high-profile acquisition of instant noodles in 2009, COFCO has not achieved the expected goal, and it is hard to find a trace in some retail terminals Since the melamine incident, Mengniu Dairy was incorporated by COFCO in 2009, which has become an important part of COFCO's whole industrial chain However, since then, Mengniu's food safety incidents have emerged in an endless stream, becoming the most food safety problems in China's dairy industry At the end of 2011, aflatoxin exceeded the standard, which made COFCO very embarrassed In an interview with reporters, GWP said that in the past three years, COFCO group has invested heavily in the acquisition of Wugu Daochang, and it can be said that it has not earned back its costs In the first half of last year, Mengniu Dairy realized operating revenue and net profit of 18.361 billion yuan and 645 million yuan respectively, down 1.17% and 18.37% year-on-year respectively, according to 2012 Zhongbao In addition, COFCO's non food sector has not been spared On February 7, COFCO real estate issued a notice on reducing its holdings of financial assets, the fourth time the company has sold financial assets since the end of 2011 According to the latest data, COFCO real estate lost 24.4717 million yuan in the third quarter of last year, and accumulated net profit in the first three quarters was 36.3616 million yuan, down 70.65% year on year At the same time, on January 14, COFCO bio chemical released the performance express report, which showed that in 2012, the company achieved a total operating revenue of 7.73 billion yuan, an increase of 4.45% year on year, and a net profit of 183 million yuan, a decrease of 48.46% year on year In fact, the recession of the above-mentioned core food business has cast a shadow on COFCO's "whole industry chain" strategy As early as 2009, GWP introduced Ning Gaoning to the outside world: "if a room is very good, but the sofa and lights inside are very messy, it may be much more comfortable to put it again This is the problem COFCO is facing Can we make the current assets of COFCO more orderly? One afternoon at the end of last year (2008), I was at home and wrote three words about the industrial chain, which opened up in a flash " GWP therefore, since September 2009, COFCO group has launched a large-scale road show and community tour activity of "industrial chain - good products - better life" Meanwhile, TV, newspapers, magazines, outdoor and Internet also launched this series of advertisements simultaneously GwP So far, the central enterprise, which has always been taking import and export trade of agricultural products and food as its leading business, has started to march into the source and terminal of agricultural products field, and tried to organically organize the industrial chain of wheat, corn, oil and fat, rice, barley, sugar, tomato, meat and so on under the operation of the whole industrial chain mode, realizing the whole grain, oil and food chain from planting to Food marketing is unimpeded GWP Ninggaoning believes that for the industrial chain itself, they used to be mainly in the upstream, in the commodity category, which accounts for a large proportion of COFCO business COFCO should take advantage of its past advantages to extend to the downstream, and be able to control the whole process of the whole industrial chain from raw materials to terminal food, that is, from the field to the dining table GWP then, under the guidance of the "whole industry chain" strategy, COFCO began to put into action In addition to the steps of building a tomato planting base in Ningxia and a comprehensive grain and oil base of 4 billion yuan in Tianjin, COFCO's most eye-catching action is M & A Marching into the Wugu Daochang and Mengniu was a typical case at that time However, after more than three years, the effect of integration is not satisfactory in both Wugu Daochang and Mengniu Dairy Even in Tunhe, which COFCO acquired in the early years, there was a huge loss, and the Fulinmen edible oil, Great Wall wine, Jindi chocolate, Yuehuo beverage and meat fields, which COFCO regarded as its own creation, did not occupy a leading position in the competition with its peers As for COFCO's whole industry chain strategy, he muzeng, founder of Lianzhong Zhida Consulting Group, tweeted, "in recent years, the whole industry chain management has been regarded as the development strategy of many enterprises Except for a few enterprises that have taken advantage of resources, there seems to be no success." In an interview with our reporter on February 21, he Mu said that COFCO's current business losses are due to internal and external factors From the internal point of view, although fast moving consumer goods are affected by the macro-economic situation, they are still much better than other industries, and they will not have a sharp drop in sales due to the impact of the environment; From the internal point of view, the concept of COFCO's whole industrial chain is questionable The connection between their industrial chains is not as good as the outside world imagined If they are separated from each other, their competitive advantages will be reduced The expansion of GWP does not abate the fever of GWP However, although a number of business losses, most business performance decline, but this does not stop COFCO's pace of expansion GWP according to our reporter, Ninggaoning has been at the helm of COFCO in these years, and its expansion pace has been fierce Although its main business has encountered difficulties at present, the signal of COFCO's expansion slowdown is not obvious in the future period, and there may be several major mergers and acquisitions in 2013.