: Bullet Finance
According to news on December 26, Jiangxi Zhengwei Food Co., Ltd. recently passed the hearing of the Hong Kong Stock Exchange and is only one step away from listing.
Zhengwei Group mainly produces and sells dry food and snacks in Jiangxi, Sichuan and Hubei. The company was first established in 2002 and has a history of 20 years. The founder is Yang Shengyao. In 2019, he expanded his business to snack production for the first time and launched fragrant lotus seeds. In August 2019, vegetable snacks were further launched, and in January 2021, meat snacks were launched.
Based on the revenue scale in 2021, they rank fifth in the Jiangxi snack food market, with a market share of and of about 0.4%.
Before the listing of Zhengwei Group, Yang Shengyao and his spouse Lin Qiuyun held approximately 64.45% of the company’s issued share capital.
Currently, Zhengwei Group has two major brands, namely Shengyao and Ganweifang.
According to the prospectus, Zhengwei Group’s revenue in 2019, 2020, 20201 and the first half of 2022 was 297.4 million yuan, 282.9 million yuan, 342 million yuan and 167 million yuan respectively. The net profits of
during the same period were 40.94 million yuan, 40.93 million yuan, 48.29 million yuan and 20.9 million yuan respectively.
Among them, the Shengyao brand’s revenue accounted for 69.2%, 73.6%, 64.6% and 79.4% respectively. is the company's main brand. Ganweifang's revenue share has increased from 5.9% to 10.6% in the past three years.
Zhengwei Group's business risks are also very clear. First of all, they rely heavily on the reputation of their main brand. Secondly, their sales channels also mainly rely on supermarkets. Its customers are mainly retailers, such as supermarkets, grocery stores, corporate customers and other individual customers.
In the past three and a half years, their top five customers have contributed revenue of 208 million yuan, 207 million yuan, 230.4 million yuan and 108.2 million yuan. Accounting for 70%, 73.2%, 67.4% and 64.8% of its total revenue respectively. During the same period, their largest customers contributed sales of 108.1 million yuan, 108.8 million yuan, 128.3 million yuan and 57.3 million yuan. Accounting for 36.4%, 38.4%, 37.6% and 34.3% of its total revenue respectively.
Supermarket chains have contributed 208.1 million yuan, 196 million yuan, 230.8 million yuan and 96.9 million yuan in revenue to Zhengwei Group in the past three and a half years, accounting for 70%, 69.3%, 67.5% and 58% of the total revenue respectively.
In addition, Zhengwei Group has faced administrative penalties due to food safety issues many times. In 2016, they were fined 35,000 yuan by the Nanchang County Market and Quality Supervision Administration for using food ingredients that did not meet food safety standards . In 2017, they were fined and confiscated 55,000 yuan for falsely labeling quality grades and using food ingredients that did not meet food safety standards to package dried daylilies;
In 2018, Zhengwei Group was fined and confiscated 57,900 yuan because producers did not use raw materials, auxiliary materials, additives, and agricultural inputs in accordance with laws, administrative regulations, and national mandatory standards to produce products.
In addition, according to media reports, on April 7, 2021, the Jiangxi Provincial Administration for Market Regulation issued a notice on the unqualified conditions of 4 batches of food. Among them, it is mentioned that the daylily (200g/bag, Shengyao + graphic trademark, 2019/12/15) sold by Ji'an RT-Mart Commercial Co., Ltd. and produced by Jiangxi Zhengwei Food Co., Ltd. has a lead detection value of 1.89±0.24mg/kg, and the standard stipulates that it is no more than 0.1mg/kg.
In March 2021, the Jiangxi Provincial Administration for Market Regulation issued a notice on the unqualified conditions of seven batches of food. It also mentioned the food safety issues of Zhengwei Group. At that time, the pistachios (280g/bag, 2020/7/15) produced and sold by Jiangxi Zhengwei Food Co., Ltd. were found to have coliform bacteria that did not meet the national food safety standards.
It can be seen that while Zhengwei Group continues to develop, Yang Shengyao also needs to improve the company's food safety management level to provide consumers with healthier and more delicious snack foods.
