Hong Jiu Guopin wants to switch to the Hong Kong stock market listing, liquidity shortage problem...

China's largest durian distributor "Hong Jiu Guopin" is about to go on the market

Hongjiu Fruits has performed well in recent years and has also received multiple financings

From the perspective of the entire fruit retail industry, it has also ushered in a wave of listings as a whole.

Have sought A-share listing

A reporter from the Beijing News learned from the Hong Kong Stock Exchange that Hong Jiu Fruit has recently submitted a prospectus to the Hong Kong Stock Exchange and intends to be listed on the H-share main board, with China International Capital Corporation acting as the sole sponsor

According to the official website of Hongjiu Fruits, the company was established in 2002 and its founder is Hongjiu Deng.

As early as 2019, Hongjiu Guopin launched A-share listing counseling, targeting the capital market

On July 21, 2021, the Chongqing Securities Regulatory Bureau released the information publicity of Hong Jiu Guopin's change of sponsors, showing that Hong Jiu Guopin negotiated with Dongxing Securities to terminate the listing guidance agreement and signed a listing guidance agreement with China International Capital Corporation

Regarding the reasons for moving to Hong Kong stocks and subsequent listings, a reporter from the Beijing News recently called Hong Jiu Guopin according to the contact information retained on the company's official website

However, in the opinion of Bo Wenxi, chief economist of IP GLOBAL China, the possible reasons for Hong Jiu Guopin’s switch to Hong Kong stocks are that the company’s financial data does not meet the standards, the shareholding structure does not meet the A-share requirements, or there are concerns in employee social security payment and cost traceability.

Lai Yang, executive vice president of the Beijing Business Economics Association, told the Beijing News reporter that Hongjiu Fruit has certain strength in terms of consumption scale and consumption ability, but the A-share listing review is strict.

Shortage of deposit liquidity

According to the prospectus, Hongjiu Fruit is China's largest private-label fresh fruit distributor and China's largest Southeast Asian imported fresh fruit distributor.

From the performance point of view, Hongjiu Fruits has been in a state of rapid growth in recent years

The prospectus shows that the performance of Hongjiu Fruit mainly depends on its core fruit products-durian, mangosteen, longan, dragon fruit, cherries and grapes

In addition, Hongjiu Fruits still has the problem of tight cash flow

Faced with the problem of tight cash flow, Hong Jiu Guopin had used borrowing to ease it

And this issue is also shown in the prospectus

Ali is the largest external shareholder

Since 2018, Hongjiu Fruit has received multiple rounds of financing
.
In April 2018, Hongjiu Fruits achieved 180 million yuan in Series A financing.
The investors were China Securities Construction Investment Capital, Fenghui Investment, etc.
; in November 2019, Hongjiu Fruits obtained Series C financing led by CMC Capital.
The amount is 500 million yuan
.
In September 2020, Alibaba signed a share subscription agreement with Hongjiu Fruit.
After the capital injection, Alibaba held an 8% stake in Hongjiu Fruit
.

According to the prospectus, among the top ten shareholders of Hongjiu Fruit, the founder Deng Hongjiu is the largest shareholder and actual controller with a shareholding ratio of 27.
79%, benefiting a total of 28.
35% of the shares; his wife Jiang Zongying holds approximately 9.
43% of the shares.
It is the second largest shareholder; the third largest shareholder is Alibaba, and it is also the largest external investment shareholder before Hongjiu Fruit's IPO
.

In addition, Tianyan Check data shows that Hongjiu Fruit has increased its capital and shares four times in 2020 alone.
On March 23, 2020, its registered capital increased from 132 million yuan to 137 million yuan, and on March 30, it increased to 1.
39.
100 million yuan, September 24, 2020, increased to 151 million yuan, December 22, 2020, increased to 453 million yuan today
.

Why does Hongjiu Fruits attract a lot of capital investment? When CMC Capital became a shareholder of Hongjiu Fruit, its partner Chen Xianzeng said, “Hongjiu Fruit’s end-to-end business model not only occupies the upstream core production resources, but also opens up downstream channels through a stable, high-quality, and rich and diversified category combination, and has successfully served New retail fresh food e-commerce, national chain medium and large supermarkets, fruit specialty stores, fruit distributors and other types of customers, and leverage the rapid growth of the new retail model to achieve rapid development
.
"

The fruit industry may start a wave of listings

According to the "China Agricultural Outlook Report (2020-2029)", China is the world's largest fruit producing area and consumer market, with fruit production accounting for about 1/3 of the world's total, and it will continue to grow in the future
.
According to data from the National Bureau of Statistics, China's fruit demand continues to grow from 2014 to 2020.
China's fruit demand in 2020 is 289.
56 million tons, a year-on-year increase of 4.
7%
.

The development of the fruit industry has attracted the attention of capital
.
In addition to Hongjiu Fruits, there are also many fruit companies preparing to go public
.

On November 19, 2020, the website of the Shenzhen Securities Regulatory Bureau released the listing guidance and filing information of the fruit chain company Baiguoyuan
.
In February 2021, it was reported that Baiguoyuan plans to be listed on the ChiNext of the Shenzhen Stock Exchange and signed a listing guidance agreement with Minsheng Securities
.

Xianfeng Fruit, which is also a fruit chain company, also wants to enter the capital market
.
On January 10, 2020, the Zhejiang Regulatory Bureau website announced that Xianfeng Fruit had signed a listing guidance agreement with CITIC Securities
.
However, in February this year, news broke that Xianfeng Fruit had terminated its counselling work
.
According to industry insiders, Xianfeng Fruit may choose to replace the counseling agency and restart its listing
.

Bo Wenxi, chief economist of IP GLOBAL China, said that the listing of many fruit chain companies will inevitably change the structure of the fruit circulation industry and accelerate the growth of leading companies in the industry to promote faster industry branding, chaining and concentration
.