"Maotai Revenue" Halo Of Jiuxian.Com Into Gem Can Become The Second Share Of A-Share Liquor Circulation?

On May 6, Jiuxian Network Technology Co., Ltd. (hereinafter referred to as "jiuxian.com") applied for gem IPO approval status changed to "inquired". Jiuxian.com IPO goes further.

As a well-known all channel, all category retail and service provider of liquor, it is very important for Hao Hongfeng, the actual controller of the company, and Jiuxian e-commerce, the controlling shareholder, whether jiuxian.com can realize IPO is very important.

"If the company withdraws or the initial listing application is returned or rejected, the company will face the risk of mandatory share repurchase and huge interest payment by the investee." Jiuxian.com has clearly indicated the relevant risks in its prospectus.

However, some people have also told the 21st century economic report that the investment in Jiuxian is basically RMB funds. In the domestic venture capital circle, it is not uncommon for investors to require the controlling shareholders and actual controllers of the companies to be listed to sign a counter bet clause to buy back shares during the IPO process.

In addition, China Securities Regulatory Commission (CSRC) once required issuers to clean up the gambling agreement before reporting in the "answers to several questions about initial business". However, due to the fact that the parties to the bet agreement are not the issuer, but the actual controller and controlling shareholder, or the reason why jiuxian.com can carry the IPO of the bet agreement.

According to the preliminary statistics of 21st century economic reporter, from 2011 to the end of 2017, jiuxian.com successively raised more than 1.8 billion yuan from more than 10 investment institutions such as Sequoia Capital through eight rounds of financing. But Jiuxian has been losing money for many years since it was launched in 2009 and officially operated in 2010. From 2013 to the first half of 2016, the losses were 309 million yuan, 280 million yuan, 251 million yuan and 71.5548 million yuan respectively. Subsequently, after a three-year high growth in the reporting period from 2018 to 2020, the total equity attributable to the parent owner is 681 million yuan.

Compared with the early investors' gambling terms, jiuxian.com's strategic transformation in recent years is also the focus of attention. In 2017, the channel of jiuxian.com gradually began to shift from alcohol e-commerce to new retail and even liquor brand service providers. Through strategic transformation, jiuxian.com achieved its first profit in 2017. Can the road of transformation bring more attention to jiuxian.com?

A brief trip to the new third board

Jiuxian.com is located in the all channel, all category retail and service provider of liquor with brand operation as the core. As the controlling shareholder of Jiuxian e-commerce, jiuxian.com was listed on the new third board on October 29, 2015.

At that time, alcohol e-commerce was in the wind. On the eve of landing on the new third board, in July 2015, jiuxian.com obtained the largest single financing in the history of domestic alcohol e-commerce at that time, and several institutions such as Minxiang investment and Fengtu investment led to invest in the G round (pre IPO) financing, with a total of 500 million yuan. Hao Hongfeng, chairman of jiuxian.com, said at that time: listing on the new third board is mainly for the future transfer to gem or strategic emerging board.

However, in the second year of listing, that is, on June 30, 2017, jiuxian.com was terminated by the new third board due to its delay in disclosing the 2016 annual report, and its controlling shareholder Jiuxian e-commerce and relevant responsible persons were issued a warning letter.

In this regard, jiuxian.com said in its prospectus that due to the tight preparation time of the 2016 annual report, it was unable to complete the preparation of the annual report, and believed that the self regulatory regulatory measures of the warning letter did not constitute administrative punishment, did not belong to major information disclosure violations, and did not occur in the reporting period, so it did not constitute a legal obstacle to listing on the gem.

The person in charge of the business of the new third board of a securities company told the reporter of the 21st century economic report that there are two main reasons for the failure of the listed enterprises on the new third board to disclose the regular reports on time. First, the operation of the enterprises, especially the small and medium-sized enterprises, is rather uncertain, and some enterprises are unable to disclose their annual reports. From the historical data, this kind of enterprises account for a large proportion. The second type is that enterprises choose not to disclose the annual report on time to achieve delisting from the perspective of comprehensive cost. At that time, there was no progress in the policy of transferring the new third board to the third board. Due to the lack of market liquidity, financing difficulties increased. At that time, a large number of enterprises chose to delist from the new third board through various forms.

After a brief listing on the new third board, jiuxian.com launched IPO again after making profits for four consecutive years. This shows that jiuxian.com is still persistent in listing.

Financing and changes of shareholders

After the delisting of the new third board, jiuxian.com has repeatedly sent out financing news, but has not seen substantial progress. During the reporting period, jiuxian.com has repeatedly reported that its investment institutions require share repurchase or even withdraw shares without interest.

In 2017, jiuxian.com began to make profits and plans to rush to the gem for listing. But during the reporting period, jiuxian.com has seven equity transfers.

In September 2018, the company completed the first equity transfer. Ji Chuntao transferred 400000 yuan registered capital of Jiuxian Co., Ltd. (the predecessor of jiuxian.com) to Wen Shuangwei; In Longhua, he transferred the registered capital of Jiuxian Co., Ltd. of RMB 672700 to Liu Shengdong.

In March 2019, Yang chengling and Meng Fanzhong transferred all their limited shares of Jiuxian to Hao Jinzhu, and completely withdrew from jiuxian.com.

In June 2019, jianmingjiang will give its 0.1533% equity to Beijing binlihe; Xinyu Fuhai Minxiang will hold 0.9999% equity to Jiuxian e-commerce; Xinyu Xiangyue will hold 1.3075% equity to Jiuxian e-commerce.

In September 2019, Jiuxian e-commerce transferred part of its capital contribution at the price of 1 yuan / registered capital to Fengtu zhanrui, Zhuhai qianheng, Chongzheng innovation, Tibet Fengda, Beijing binlihe and other shareholders.

In December 2019, for the fifth equity transfer of the company, six institutional and individual shareholders including Chongzheng innovation and Beijing binlihe transferred Jiuxian limited equity due to capital demand. Jiuxian e-commerce, Hao Jinzhu and other shareholders have to transfer their shares in order to raise funds to pay for the transfer of equity in the early stage.

In December 2019, the company's shareholders Shenzhen Fuhai Minxiang and Chongzheng innovation respectively transferred 0.2461% and 0.04% equity of the company to Zhao Guangyong. In January 2021, Zhao Guangyong quickly transferred 0.0623% of his shares to Tang Rong, 0.1014% to Chen Hua and 0.1449% to Huang Yanfei.

On the eve of listing, many shareholders of jiuxian.com withdrew.

A former management person who once worked in jiuxian.com pointed out to the reporter of the 21st century economic report that some shareholders transferred their shares out of personal capital needs. In his opinion, jiuxian.com has been followed by some investment institutions for many years since its establishment. Overall, the concept of jiuxian.com has been recognized by investment institutions.

The reporter of 21st century economic report found that during the reporting period, some early investors of jiuxian.com have asked Hao Hongfeng, the company's actual controller, to perform the equity repurchase agreement through litigation channels, and compensate for interest and liquidated damages.

According to China referee.com, during the reporting period, many partners of Jiuxian investment institutions, such as Xinyu Minxiang, Xinyu Xiangyue and Xinyu Fuhai, have appealed to the court to ask jiuxian.com and its controller Hao Hongfeng to implement the equity repurchase clause and pay the investment principal in full Agreed income and liquidated damages.

According to jiuxian.com, when jiuxian.com raised funds in May 2015, Jiuxian e-commerce shareholders jointly signed a gambling agreement, stipulating that if the company fails to complete the listing on schedule by the end of 2018, Hao Hongfeng has the repurchase obligation to other shareholders of Jiuxian e-commerce except he Songchun.

The initial investment principal of Xinyu Fuhai investment jiuxian.com is 65 million yuan. According to the gambling agreement of both parties, if the actual controlling shareholder of jiuxian.com violates the agreement and fails to be listed on schedule, the defaulting party shall bear 20% of the initial investment principal to Xinyu Fuhai.

Since then, Xinyu Fuhai has signed a supplementary investment agreement with jiuxian.com, stipulating that Hao Hongfeng is the actual controlling shareholder of jiuxian.com. If it fails to be listed on schedule, Xinyu Fuhai has the right to require Hao Hongfeng to buy back all or part of the shares of jiuxian.com held by Xinyu Fuhai at the price of the initial investment principal plus 10% of the simple interest per year.

Jiuxian.com disclosed that during the reporting period, the company's shareholder, Shanghai Chengchu, had asked the controlling shareholder Jiuxian e-commerce to buy back its equity due to the urgent need for funds, and it only needed to recover 50 million yuan of the initial investment. In order to raise equity transfer funds, jiuxian.com transferred the company's capital contribution of 5553600 yuan to songrui venture capital at a low price of 50 million yuan in August 2019.

Rapid growth of revenue and profit

The impact of the listing, Jiuxian net to the capital market report card is particularly eye-catching. After two years of dormancy in 2016 and 2017, the performance of jiuxian.com will increase significantly from 2018 to 2020.

During the reporting period from 2018 to 2020, jiuxian.com has achieved revenue of 2.206 billion yuan, 2.997 billion yuan and 3.717 billion yuan respectively, and the net profit attributable to its parent company is 28.5565 million yuan, 81.6617 million yuan and 182 million yuan respectively.

For the beautiful business results, jiuxian.com said that the annual compound growth rate of the company's revenue was 29.79%. During the reporting period, the company's strategy was clear and focused on the brand building of beverage retail. With the accumulation of brand, products and services, supply chain management, and the mining of offline empowerment, the company continuously developed offline chain stores, formed a competitive advantage, and thus increased business income.

With high profits, jiuxian.com goes straight to Shenzhen GEM and plans to raise 1 billion yuan, of which 531 million yuan is used for the construction of intelligent warehouse, 134 million yuan for the construction of intelligent retail information platform, 150 million yuan for brand marketing construction and 185 million yuan for supplementary operating funds. According to the total investment plan of the project, jiuxian.com will also invest 705 million yuan in addition to the above-mentioned 1 billion yuan.

However, during the reporting period, the company's current liabilities soared sharply, from 946 million yuan in 2018 to 1.6 billion yuan in 2020, mainly composed of short-term loans, notes payable, accounts payable, contract liabilities, etc. the amount of short-term loans and notes payable at the end of 2020 reached 534 million yuan and 428 million yuan respectively.

Jiuxian.com explained in the prospectus that the company's asset liability ratio is higher than the average level of comparable companies in the same industry. The main reason is that the company's current business is in a rapid development stage. When the company needs to purchase from upstream distilleries, it basically needs to prepay the purchase money in advance and reserve a large amount of goods in advance, resulting in a high proportion of inventory and prepayment. At present, the company's capital utilization efficiency is relatively high, and the level of assets and liabilities is still normal at this stage.

By the end of 2020, the company's inventory book balance and provision for depreciation have reached 842 million yuan and 25.1582 million yuan respectively.

Jiuxian net high growth of another strategy is to reduce costs. During the reporting period, the proportion of the company's period expenses decreased significantly, from 21.16% to 13.61%.

According to the calculation of 21st century economic report, if the cost saving rate is 21.16% in 2018, jiuxian.com will increase its gross profit by 275 million yuan in 2020.

Layout Online + offline aggregate sales mode

The reporter of 21st century economic report found that another driving force of jiuxian.com's high performance growth is to seize the opportunity of "national liquor" Maotai and Yibin Wuliangye.

Among the top five suppliers of jiuxian.com in 2018, Guizhou Maotai Group has not been seen. The company's purchase amount of Yibin Wuliangye's liquor products is only 130 million yuan, accounting for 7.42% of the company's purchase amount.

In 2019, Yibin Wuliangye is the largest purchasing channel of jiuxian.com, with the annual purchase amount of 452 million yuan, increasing to 17.71%.

In 2020, Yibin Wuliangye and Guizhou Maotai Group will become the first and second largest procurement sources of jiuxian.com respectively. Among them, the company purchased 400 million yuan from Yibin Wuliangye, accounting for 13.86%, and 307 million yuan from Guizhou Maotai Group, accounting for 10.66%.

Among the top ten liquor brands in jiuxian.com in 2020, Maotai liquor contributed 861 million yuan, accounting for 30.97% of liquor sales revenue, and Wuliangye contributed 519 million yuan, accounting for 18.65%. This directly led to the soaring performance of jiuxian.com in 2020, with a net profit of up to 182 million yuan, more than twice the net profit in 2019 and nearly seven times the net profit in 2018.

Liquor industry analysts pointed out that jiuxian.com has seized the opportunity of consumption explosion of high-end liquor, especially Maotai, in recent years, and has established stable cooperative relations with these famous liquor brand enterprises. Cooperation with famous liquor brands is conducive to the establishment of a stable consumer group. It is an important part of the company's revenue and an important guarantee for the company to achieve its strategy.

In this regard, jiuxian.com pointed out the risks of famous liquor business in the prospectus, and pointed out that the company has the risk of changing the cooperation relationship with upstream suppliers.

In fact, in order to curb the market hype, Guizhou Maotai Group began to gradually shift the sales channel to the self operated direct selling mode. In 2020, the sales volume of Guizhou Maotai direct sales channel was 3932.08 tons, an increase of 48.27% year-on-year, while the sales volume of wholesale agency channel was 60123.8 tons, a year-on-year decrease of 3.02%.

Some wine industry observers familiar with the company pointed out that although Maotai, Wuliangye and other famous liquors have increased the proportion of direct sales in recent years, from the perspective of liquor industry characteristics, agent distribution is still the most important sales mode. In China's 1.5 trillion yuan beverage consumption market cake, liquor Omni channel retailers like jiuxian.com still have a place.

The aforementioned people said that in the long run, jiuxian.com's offline channel construction and comprehensive marketing solutions for wine merchants may become another growth point of performance. Previously, the company mainly focused on online sales. In fact, the proportion of liquor consumption channels under the middle line was higher, and the mode of online sales alone was not sustainable. Since 2017, the company began to build a strong management mode of brand chain retail, and realized the in-depth integration of online and offline liquor retail. Based on the deep understanding of the beverage industry, we should arrange sauce wine, foreign wine and wine products earlier, and seize the opportunity to achieve performance growth.

According to the prospectus of jiuxian.com, by the end of 2020, the number of "Jiuxian international famous liquor city" and "jiukuaidi" stores were 549 and 348 respectively, and the business income of offline chain stores increased from 294 million yuan in 2018 to 892 million yuan in 2020, becoming an important channel for the company's product sales. In addition, the development and promotion ability of specialized products has been continuously improved. On the one hand, through strengthening strategic cooperation with liquor enterprises, we can continuously obtain more procurement varieties and enrich our product line. On the other hand, the company makes use of its own retail experience and advantages, deeply analyzes the taste structure of consumers, and cooperates with well-known wine companies at home and abroad to develop specialized products with different price segments, different market positioning and consumer tastes, which provides a product basis for the continuous growth of the company's revenue.

Some of the foreign wine and wine have the ability to take over Maotai and Wuliangye. According to the prospectus, the total annual sales of Andersen and dingoso both exceeded 70 million yuan in recent years, and the gross profit level of these private brand products was relatively high. Remy Martin (some models are exclusively promoted and sold by the company) is a highlight in recent years. In 2020, the sales volume of Remy Martin will reach 297 million yuan, second only to Maotai and Wuliangye.