"Nongfu Spring is a little sweet"
"We don't produce water, we are just porters of nature"
"Tea π, it's a whole group"
When these very familiar slogans ring in your ears, you will definitely think of Nongfu Spring.
Today, Nongfu Spring landed on the Hong Kong Stock Exchange. The issue price is HK$21.5 per share, which is between the upper limit of the IPO price of RMB19.5 to RMB21.5. The opening price was HK$39.8, up 85.12% from the issue price, with a market value of HK$445.292 billion.
The personal wealth of its founder Zhong Shanshan increased sharply overnight. Based on the current market value of Nongfu Spring and Wantai Bio, as well as the respective shareholding ratios of Zhong Shanshan, Zhong Shan's overall value may reach 400 billion yuan, becoming the richest man in China.
For a long time, "nature's porter" is the market image that Nongfu Spring is focusing on creating, but in fact, compared with the concept of "porter", Nongfu Spring is more like "nature's printing machine".
prospectus clearly shows Nongfu Spring’s outstanding profitability: 2017 earnings of 17.491 billion yuan, 20.475 billion yuan in 2018, and 24.021 billion yuan in 2019, with an annual compound growth rate of 17.2%.
's net profits achieved in the past three years were 3.385 billion yuan, 3.612 billion yuan and 4.954 billion yuan, respectively, with an annual compound growth rate of 21.0%.
Nongfu Spring's net profit margin rose to 22.8% in 2019. The average net profit margin of my country's soft drink industry is only 9.6%, far higher than the industry average.
The gross profit margin of 60% has brought Nongfu Spring into the spotlight again, and Zhong Shanshan, the leader who has always been low-key, finally surfaced.
The story behind "a little sweet"
According to rumors in the world, Zhong Shanshan is a legendary character. In that special era, Zhong Shanshan, who came from a scholarly family, was forced to drop out of school in the fifth grade and was transferred to work as a bricklayer. When he was 23 years old, the college entrance examination finally recovered. Zhong Shanshan, who was eager to change his destiny, took the college entrance examination twice, but both failed. He finally got into the TV University for the third time. During his days as an applicant for the Zhejiang Daily reporter, he met Jack Ma, who also failed the college entrance examination twice. The two appreciated each other and encouraged each other. Perhaps it was the news from reporter Zhong Shanshan that inspired Jack Ma, who was about to be unable to support him, and Jack Ma was admitted to university back then.
Five years of journalist career have given Zhong Shanshan a vision and accumulated connections and resources. Of course, his humanistic feelings, extraordinary ability to write advertisements and tell stories from time to time in business may also be due to this experience.
In the early 1990s, Zhong Shanshan resigned from Zhejiang Daily and went to Hainan to establish the Pacific Post. In the end, because the private daily issue numbers were difficult to reach, this romantic sentimental sentiment was strangled in its infancy. Then he planted mushrooms, sold curtains, and distributed Wahaha oral liquid. After several twists and turns, he finally successfully made his first pot of gold in his life.
In September 1996, Zhong Shanshan founded the predecessor of Nongfu Spring, Zhejiang Qiandaohu Health Hall Co., Ltd. At that time, pure water in the drinking water market was very popular. The old "drinking water" Wahaha, Master Kong , and Yibao were scrambling tout their products, and the later Zhongqiu was completely at a disadvantage. However, his superb storytelling ability allowed him to break through the siege.
In 2000, Zhong Shanshan announced in a high-profile manner that all its pure water business will be stopped and the production of natural water will be fully converted, because "pure water is not good for health." This disruptive concept triggered a major earthquake in the drinking water industry. In order to tell this story well, Zhong Huiqiu put daffodils, goldfish, etc. in pure water and natural water in the form of an advertisement film to conduct public experiments to prove that natural water is the best. Afterwards, the advertising slogan "Nongfu Spring is a little sweet" written by him appeared. "This advertising slogan successfully hit the majority of consumers, gradually making the concept of natural water the mainstream of the drinking water market, and Nongfu Spring turned the trend against the trend.
Perhaps it had long anticipated the melee between natural water and pure water. Before the melee, Zhong Shanshan took the lead and bought out the exclusive development rights of Qiandao Lake in Zhejiang for 20 years. Subsequently, Nongfu Spring continued to explore the resources of water source. To this day, Nongfu Spring has already included Changbai Mountain, Wuling Mountain, Emei Mountain, and Daxinganling.In short, wherever the mountains and rivers are beautiful, you can buy out wherever the scenery is unique. In addition to buying, advertising expert Zhong Shanshan was idle and wrote a related supporting advertising slogan: "We don't produce water, we are just porters of nature."
In 2007, Nongfu Spring and Master Kong launched a fierce price war to compete for the national market. In order to break the price deadlock, story master Zhong Shanshan’s “Water Type Concept 2.0” - weakly alkaline water is more conducive to health. According to media reports at the time, Nongfu Spring published an advertisement for "drinking water pH test" in major media across the country, and arranged a large number of promotional personnel to distribute test papers for free in shopping malls and streets.
One meal is as fierce as a tiger, and the story of "weak alkaline water" has caused a sensation: people have found that except for a few brands such as Nongfu Spring, most other bottled drinking water is acidic. After this battle, the market share of Master Kong bottled water fell by more than 5 percentage points, while the market share of Nongfu Spring rose by 0.7%.
Although the acid-base physique theory was later proved to be pseudoscience, it did not affect Nongfu Spring's brilliant record: it obtained 10 years of development dividends.
After these battles, Nongfu Spring "killed the master's mercy" and brought down giants such as Wahaha, Master Kong one by one. From 2012 to 2019, Nongfu Spring has been the leader of drinking water faucets for eight consecutive years.
Despite this, Zhong Shanshan stories are still emerging one after another for different groups of people and different scenes. For young people, he is telling the story of "vitamin water"; for the elderly, he is telling the story of "lithium water"; for sports people, he is telling the story of "sports cover mineral water"; for infants and young children, he is telling the story of "sterile natural water"; for NetEase Cloud Music, he is telling the story of "all flavors of life"; in the Forbidden City, he is telling the story of "imperial water"...
In the development of Nongfu Spring, Zhong Kurokong's ability to tell stories and write advertisements can be said to be extraordinary. He used nature that he couldn't speak as a selling point, and played the perfect drama of "natural monopoly, God appreciated food" and built a moat for the product with amazing advertising slogans. Behind the story is a profound insight and grasp of human nature and consumer psychology. Behind the story is the expansion of water source resources, the expansion of product lines, the optimization of channels, and the layout of the brand matrix.
From "a little sweet" to "very rich", from "nature's porter" to "nature's money printing machine", the high valuation of Nongfu Spring and Zhong Shanshan's high value are definitely not just as simple as how many stories he told or how many advertisements he made.
"Every drop of water has its source" The advertising slogan evolved from ancient poems is the best interpretation of the past, present and future of Nongfu Spring.
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