On October 25, 2017, Lu Guanqiu, the boss of of Wanxiang Group and a model of Chinese private entrepreneur, passed away. Wanxiang Group is the actual controller of Chengde Lulu. Chengde Lulu's financial data has always performed very well and is very stable. So analyze Chengde Lulu to commemorate Mr. Lu and wish him a good journey. The reason why
uses this title is the most direct feeling after writing a complete article. Please read it slowly.
Chengde Lulu is a simple company, belonging to the beverage and food industry. Its main product is plant protein beverage - almond lulu . It is the largest almond lulu manufacturer in the country, with an annual production capacity of more than 500,000 tons and a market share of 90%. Chengde Lulu’s vision is to become a leader in plant protein beverages in China, and then become a health expert in the field of plant nutrition, provide rich, innovative and unique healthy plant beverages and foods, and build it into a powerful national enterprise.
Chengde Lulu has been engaged in the production of plant protein beverages for more than 30 years. Lulu brand almond lulu is the founding product of Chinese plant protein beverages. It can be said to be synonymous with almond lulu beverages. The company has completely independent intellectual property rights and strong technical strength. The company is also a member unit of the Technical Committee of the China Beverage Industry Association and can participate in the drafting of national standards. Overall, this is a company with useful technologies, brands and super high market share in segments.
Hebei Chengde Lulu Co., Ltd. is headquartered in Hebei Chengde High-tech Industrial Development Zone. Its predecessor was Chengde Canned Food Factory, which was founded in 1950. In November 1997, the company was listed on the Shenzhen Stock Exchange. In 2006, after state-owned enterprise reform, Wanxiang Sannong Group Co., Ltd. held 42.55% of the company's shares, becoming the company's largest shareholder. In recent years, the company has successively developed and put into production of series of plant protein drinks such as "Brilli Walnuts" and "Peanut Lu", which not only enriches the connotation of the "Lulu" brand, but also becomes a new growth point for the company's business development. At present, the company has Chengde headquarters and four production bases in Huairou, Beijing, Langfang, Hebei and Zhengzhou, Henan. The annual production capacity reaches 400,000 tons, providing strong guarantee for the company's sustainable development. The company's products were rated as "National Quality Inspection Stable and Qualified Products". In March 2016, the company was awarded the honorary title of "National Product and Service Quality Integrity Demonstration Enterprise" by the China Quality Inspection Association.
Chengde Lulu landed on the Shenzhen Stock Exchange on November 13, 1997. After 20 years of development, the company's total assets increased to 2.442 billion yuan in June 2017, operating income increased to 2.521 billion yuan in 2016, net profit increased to 456 million yuan in 2016, and the total market value reached about 10.676 billion yuan on October 30, 2017, and the stock price increased by about 14 times in 20 years. The stock price growth is not very surprising, but its continued focus on the almond delicacy market and its stable financial performance deserves respect. The following figure shows the stock price performance of Chengde Lulu after its listing.
In June 2015, Chengde Lulu's stock price reached 18.95 yuan due to the crazy rise in the market. Later, due to the stock market crash, the market value fell by nearly 50%. The stock price is still in the adjustment stage and has not rebounded effectively. The stock has undervalued performance to a certain extent.
Basic situation and equity structure of "Chengde Lulu" company
Chengde Lulu's largest shareholder is Wanxiang Sannong Group Co., Ltd., with a shareholding ratio of 40.68%. The actual controller of Wanxiang Sannong Group Co., Ltd. is Lu Guanqiu, who holds 90% of the equity of Wanxiang Sannong Group Co., Ltd. and is the actual controller of the company. Another shareholder, Lu Weiding, holds 10% of the shares, and he is Lu Guanqiu's son. Chengde Lulu is a private enterprise. Lu Guanqiu controlled three listed companies, namely Wanxiang Qianchao , Shunfa Hengye and Wanxiang Denong . Sunshine Property Insurance holds 7.40% of the shares and is the second largest shareholder, while Social Security Fund holds 4.15% of the shares, and the top ten shareholders hold a total of 59.07% of the shares, which is relatively concentrated.
is the following diagram of the relationship between the controlling shareholder and the company.
The relationship between Chengde Lulu and Wanxiang Group and the controlling shareholder Wanxiang Group's attitude towards Chengde Lulu is very important for analyzing the future development of Chengde Lulu. The picture below shows Lu Guanqiu, a private entrepreneur in Zhejiang who is very powerful, prestigious and low-key. Wanxiang Group and Lu Guanqiu have a good relationship with the senior government leaders.
A brief introduction to Lu Guanqiu's life experience. This entrepreneur over 70 is very respected. Lu Guanqiu, born on January 17, 1945 in Ningwei Town, Xiaoshan District, Zhejiang Province, Chairman of the Board and Party Secretary of Zhejiang Wanxiang Group. In July 1969, he led 6 farmers to raise 4,000 yuan to establish Ningwei Commune Agricultural Machinery Factory. In January 1990, he became the vice president of the China Township Entrepreneurs Association. In 1985, he was named one of the top ten news figures in the country by "Banyuetan". In 1994, the group's core enterprise Wanxiang Qianchao Co., Ltd. was listed. In 2013, it ranked 14th on the China Rich List with 23.5 billion. Deputies to the 13th and 14th National Congress of the Communist Party of China and the 9th National People's Congress. On October 13, 2016, the 2016 Hurun Rich List was released, and Lu Guanqiu ranked 18th with a wealth of 55 billion yuan. In the 2016 Hurun Real Estate Rich List, the Lu Guanqiu family ranked 48th with 10 billion.
The two important deputys of Wanxiang Group are Guan Dayuan, who controls three listed companies: Wanxiang Denong, Chengde Lulu and Shunfa Hengye. The other is Lu Guanqiu's son-in-law, who is in charge of Wanxiang United States and global asset allocation and acquisition. Lu Guanqiu has three daughters and one son, and they are also involved in some of Wanxiang Group's businesses. His son Lu Weiding is mainly involved in Wanxiang Group's financial system management, and he is likely to become the successor of Wanxiang Group in the future.
"Chengde Lulu" development history
Chengde Lulu's past development history was mainly state-owned enterprise reform. Because it occupies an absolute monopoly position in the almond lu market, it does not have much access to other fields and re-scale investment in the future, so the following mainly introduces the share reform situation of Chengde Lulu at that time.
1) On December 28, 2001, Lulu Group transferred its 67.405 million shares of Chengde Lulu State Shares (accounting for 26% of the total share capital) to Wanxiang Investment at a price of 4 yuan per share. After the equity transfer, Lulu Group holds 38.9% of Chengde Lulu's shares, and still ranks as the largest shareholder.
2) In June 2004, Wanxiang Investment transferred its shares in Chengde Lulu to Wanxiang Sannong Co., Ltd.
3) Since Chengde Lulu is the most profitable asset in Lulu Group, Lulu Group itself has average profitability. From 2003 to 2005, Lulu Group occupied a large amount of funds from Chengde Lulu, 240 million in 2003, 370 million in 2004, and 280 million from January to August 2005. Although most of the funds were returned, the balance of funds occupied increased year by year, from 16 million yuan at the end of 2004 to 50.9 million yuan at the end of August 2005. These non-operating capital transactions are "inconsistent with relevant regulations" and have a negative impact on Chengde Lulu. In order to completely solve this problem, when Chengde Lulu carried out equity split reform in 2006, it was decided that Chengde Lulu would target to repurchase and cancel all state shares held by Lulu Group to "completely solve the historical problem of capital occupation."
4) On April 10, 2006, the shareholders' meeting of Chengde Lulu reviewed and passed the "Share Division Reform Plan", that is, Chengde Lulu targeted repurchase and cancel all state shares held by Lulu Group, and Wanxiang Sannong paid 68.43 million yuan in cash to all circulating shareholders, which was equivalent to 6.27 yuan per 10 shares of the circulating shareholders. Subsequently, Chengde Lulu targeted repurchase and cancelled all state shares held by Lulu Group 121,014,000 shares (accounting for 38.90% of the original total share capital). At this point, Lulu Group no longer holds shares in Chengde Lulu, while Wanxiang Sannong's shareholding ratio has increased to 42.55%, becoming the largest shareholder of Chengde Lulu. Lu Guanqiu also successfully became the actual controller of Chengde Lulu.
5) In 2006, Chengde Lulu purchased a total of 127 "Lulu" trademarks, 73 patents, domain names, barcodes and other intangible assets from Lulu Group for 301 million yuan. On March 11, 2008, the transfer and transfer procedures of intangible assets were completed.
At this point (it is absolutely impossible in the market now) state-owned shares are cancelled, the first largest shareholder disappears, and the second largest shareholder becomes the controlling shareholder is over. However, the chairman and controlling shareholder of the original controller Lulu Group is not that simple. After Wanxiang became the major shareholder of Chengde Lulu, but before completing the transfer of intangible assets, Wang Baolin signed the two agreements of trademark use license and enterprise name use license at the same time, and signed it for 10 years, which caused the current situation in Nanfang Lulu.Text above
can also feel how difficult it was for Chengde Lulu to reform the stock market at that time. However, although the development of things was on the right track for Chengde Lulu, it did not embark on the road of rapid development, because Wanxiang Group still used "cash bull" for Chengde Lulu from the moment, and paid less attention and investment. This also made Chengde Lulu still develop steadily, but its returns to shareholders are not high, which does not match its market position.
"Chengde Lulu" business field and main products
Judging from Chengde Lulu's financial reports in recent years, the company's main business and main products have not changed, and are still the production and sales of almond lucid. Currently, there are 14 main products in the company. The 8 most important products are listed below, all of which are almond dew:).
Chengde Lulu's operating income comes from almond lure according to product classification. In 2016, its gross profit margin was about 43.94%, which slightly increased compared with the past year. The company's current operating income is in the country. Judging from its production volume, sales volume and inventory volume, Chengde Lulu's production and sales cooperation is very good, and the production can basically be sold.
"Chengde Lulu" overall industry characteristics and core competitiveness
China's beverage industry has experienced rapid development in the past three decades, and the annual average growth rate of soft drink production reached an unprecedented 20.6% during the 11th Five-Year Plan period. However, with the downward pressure of the national economy and being in the national economic environment, the beverage industry has entered a period of adjustment that has never been seen in 30 years. Before 2010, my country's annual beverage growth rate exceeded 20%. Since 2011, the output growth rate has slowed down. In 2013, the average annual growth rate was 14.1%, and the average annual growth rate dropped to 3.87% as of 2016, the lowest growth rate in the past 30 years. The beverage industry is also facing a trend of slowing economic development, with a significant decline in growth. This slowdown will continue in the next period. At the same time, the beverage industry is an open, extremely high market-oriented industry and relatively low entry threshold. Capital investment and production capacity are constantly rising, and the growth rate of market size slows down, which determines the inevitability of intensifying competition in the beverage market. The trend of winning is more obvious, and competition has also developed from low-level price competition to a higher and more comprehensive direction. The company's market is the plant protein beverage almond delicacy market. Compared with other beverages, the industry's growth rate exceeds that of the beverage market. However, if more products are not developed to meet consumers, growth may also be slow in the future.
The Fifth Plenary Session of the 18th Central Committee of the Communist Party of China determined the national strategy of "Healthy China". The industry association launched the innovative concept of beverage products of "more nutritious and more diverse". The "natural, green, nutritious and healthy" category characteristics of plant protein beverages are naturally in line with the development trends and trends of the beverage market and are becoming more and more popular with consumers. The consumer population is growing rapidly, and many companies have entered this field. The company is a leading advantageous enterprise in the plant protein beverage industry. It maintains its rapid development momentum for many years. In the face of new challenges in the industry development, it must seize the opportunity.
Chengde Lulu's main business does not have obvious cyclicality, and the company's core products are subject to limited direct competition. However, it can also be seen that although Chengde Lulu's performance in the past year and its financial indicators are stable, its development is still relatively slow. Its revenue increased from 1.1 billion in 2005 to 2.5 billion in 2016, with a slow growth. During the same period, the sales revenue of six walnuts (six walnuts are a walnut plant protein beverage produced by Hebei Yangyuan Zhihui Beverage Co., Ltd.) increased from 0 to 15 billion. Chengde Lulu can be said to have missed a better development stage and did not choose to increase investment and expand production, which is a bit concise. So there is a saying that "Chengde Lulu is a cash machine of Wanxiang Group" makes sense. It is understood that Chengde Lulu's cash (up to 2.1 billion yuan in 2016, and there were no short-term loans or long-term loans) was kept in Wanxiang Finance, and only current interest was provided. Not only did Chengde Lulu not increase its investment, he did not even buy basic financial products (wealth management products can provide at least 100 million yuan in interest income in one year), which is indeed not honest enough.From the stock price trend of Chengde Lulu, it can also be seen that the company's stock price is in a volatile and declining trend when there is no major change in its operating and financial situation, which is relatively abnormal.
Chengde Lulu has few competitors. It has established brand advantages and production scale advantages, but after all, there is only one almond lucid product. It is very difficult to develop other categories of products, and its technical content is not high. If other beverage or food companies enter this market, it will have a certain impact on Chengde Lulu, because this market field is not saturated and there is still a lot of room for growth.
From the perspective of industry, enterprise own operations and finance, Chengde Lulu is a good company and has experienced a long time of development. However, because its shareholder background has passed, Chengde Lulu has insufficient development potential this year, Chengde Lulu is worth investing but does not recommend a heavy position.
"Chengde Lulu" financial performance
lists the core financial data below, and checks whether Chengde Lulu listed companies have excellent and stable performance from the perspectives of security, profitability, growth, operational capabilities, etc. For a listed company that has been in excess of ten years and has experienced at least two major economic cycles, its financial data can objectively reflect the current situation of the company. [The financial indicators recommended to be filled with purple, especially the red font description]
is the following is the minimum financial data analysis table introduced by the MJ Super Digital Power Course, which will be slightly different in calculations, such as the average calculation ratio of assets, receivables, inventory, etc. But the table below emphasizes business nature and also adds the latest quarterly data.
"Chengde Lulu" price-earnings ratio estimate
is valued by the average price-earnings ratio of the beverage industry where Chengde Lulu is located, and calculated as follows.
Chengde Lulu belongs to the beverage industry. It counts the average price-to-earnings ratio and median price-to-earnings ratio of the beverage industry in the past five years. It is estimated that the highest price-to-earnings ratio in the past five years is 35, the normal price-to-earnings ratio is 24, and the lowest price-to-earnings ratio is 15. The stock price estimate table is shown below. The latest closing price on October 30, 2017 was 10.91, and the stock price was in a normal undervalued position.
is as follows: Chengde Lulu's stock price valuation trend chart based on the industry's price-to-earnings ratio analysis.
is valued based on Chengde Lulu's past price-to-earnings ratio (PE-TTM non-recurring items) data, and is calculated as follows.
Chengde Lulu's past P/E ratio was 76, the lowest point was 15, the average was 31, and the median was 29, so the lower valuation price-to-earnings ratio was 20, the normal valuation price-to-earnings ratio was 30, and the higher valuation price-to-earnings ratio was 40. Chengde Lulu's P/E ratio was slightly higher than that of the beverage industry. Based on this data, calculate Chengde Lulu's stock price as follows. The latest closing price on October 30, 2017 was 10.91, and the stock price was in a normal undervalued position.
is as follows: Chengde Lulu's stock price valuation trend chart based on its own price-to-earnings ratio analysis.
Summary of "Chengde Lulu"
What is its basic status?
Chengde Lulu has been listed on the A-share main board for 20 years and has been operating almond lulu products with a market share of more than 90%. It is also a leader in plant protein beverages in China, and its brand is deeply rooted in the hearts of the people. The company's current products are relatively single, and its revenue and profit have declined in recent years. The company's development potential is average, but the company's financial situation is very stable. The actual controller of the company is still Wanxiang Group. Wanxiang Group does not pay enough attention to Chengde Lulu, and the current situation has not improved yet.
What does it do to make money?
produces and sells almond dew products. It is a typical beverage retailer. It combines production and sales well and has a very good cash flow recovery.
How is its money-making ability?
gross profit margin is about 43% and net profit margin is about 15.42%, ROE is 14.22%, and profitability is very strong. Although the gross profit margin is average, the net profit margin remains good.
How is its ability to borrow money?
The company does not have short-term loans or long-term loans, nor does it have shareholders to provide equity pledge financing. In 2016, the company still had 2.1 billion yuan in cash on its books, so it can be said that the company does not have to borrow money at all.
What is its development potential?
From the current perspective, Chengde Lulu has relatively small development potential, and it can also be said that the event is likely to maintain the status quo.The future development of Chengde Lulu depends on three aspects. On the one hand, whether the shareholder Wanxiang Group can support Chengde Lulu to use its own capital and brand advantages to expand production, so as to strive for more sales and even exports; on the second hand, whether Wanxiang Group can delegate power to Chengde Lulu. The current situation is that Chengde Lulu's core management and directors are almost all Wanxiang's dispatched people. The company has become Wanxiang's ATMs. Wanxiang's development of Chengde Lulu is to maintain the status quo. Such shareholders are really heartbreaking; on the third hand, whether Chengde Lulu can develop other popular products besides almond Lu, or enter other beverage markets, and make a fuss about health, otherwise there will be a change sooner or later. Generally speaking, Chengde Lulu wants to talk about future development potential. An important premise is that Wanxiang Group, as the controlling shareholder, must strongly support it. In fact, as long as the power is delegated, it is not too much to infringe on the interests of the company.
"Chengde Lulu" faces risk points
first, controlling shareholder Wanxiang Group. As mentioned above, Wanxiang Group's non-delegation of power and excessive control are important obstacles to Chengde Lulu's development and the biggest variable in whether this stock is worth investing in.
Second, beverage safety risks. This is a characteristic of the food industry, but considering that the company has been developing for many years, the probability of food safety use problems is very small. However, enterprises are still required to strictly control quality control and produce and sell in accordance with all national requirements.
Third, can the company have new business growth points? Chengde Lulu’s core business is almond lucid. Although the market for almond lucid still has room for development, it is still too small, but there is still a lot of room for plant protein beverages. At present, Chengde Lulu has no signs of development, and the annual financial report content is similar. If this part is still not solved well, it is difficult to say whether the company’s development will improve in the future.
This article is from Beta Brother
For more exciting information, please come to the Financial World website (www.jrj.com.cn)
