Written by /Jian Zexiang
Edit /Ji Guohua
On March 18, 2009, the Ministry of Commerce officially stopped the acquisition of Coca-Cola for Huiyuan Juice . For Huiyuan Juice and founder Zhu Xinli , the "ten years of blood loss" began.
At that time, Huiyuan was already China's largest juice company, no doubt, and its total market value of 23 billion also set the largest IPO record on the Hong Kong Stock Exchange. Who would have expected that ten years later, it would be heavily in debt, with a debt of 10 billion yuan, suspended for 20 months, and was on the verge of delisting. After 30 years of entrepreneurial journey, Huiyuan has made itself a typical failure in Chinese companies' time-travel cycle.
Wrong Pay Pioneer System
On September 18, 2019, a Chinese man fell in the basement of a villa in London, surrounded by a circle of red wine bottles. The ambulance flashed his lights quickly and pulled him to the nearby Chelsea with Westminster Hospital. But it was too late. Ten hours later, the man was declared dead due to multi-organ failure, alcohol dependence, and acute pancreatitis.
The man's name is Zhang Zhenxin, the head of Dalian Pioneer Group, with a net worth of tens of billions and 4 private jets alone. Pioneer Group claims to be a financial full-licensed company, and its financial workshops, Internet Information and other companies have a great position in the Internet finance industry.
Before Zhang Zhenxin's sudden death, the P2P and private equity funds affiliated to the Pioneer Group had already been in a redemption crisis, with risk exposure as high as 70 billion yuan.
The mess of Internet finance was tied into a bundle of feather dusters by Zhang Zhenxin, but in the next story, he was not the protagonist.
It is worth noting that on September 9, before Zhang Zhenxin's death, Pioneer P2P company Factory Weijin issued a black humorous announcement.
Four Huiyuan Group companies, Yichunyuan Trading Co., Ltd., Yichunhuiyuan Ecological Breeding Co., Ltd., Hulin Huiyuan New Ecological Dairy Co., Ltd., and Hulin Huiyuan New Ecological Animal Husbandry Co., Ltd., totaling 4 million yuan overdue. This money will be used to pay off the debt. The four Huiyuan Juices are taken out to pay off the debt.
The four companies also promised in the announcement: If everyone thinks the value of juice is not enough to pay, we still have red wine and sea buckthorn juice. If it really doesn’t work, we still have rice and fungus from the Northeast - there is always one that can satisfy everyone.
An announcement broke the secret contact between Huiyuan Juice and the Pioneer Symposium, and also shook off the financial chaos of Huiyuan Juice.
How much does Huiyuan withdraw from the Pioneer ATM? There is no conclusion yet. There are two statements in public reports: 2 billion and 3.6 billion. However, according to a list of overdue companies disclosed by Netcom on August 28, Huiyuan Group's total debts on Netcom alone have been 145 million yuan.
In addition to juice, Huiyuan also wants to hand over a villa area in Beijing Shunyi to Pioneer to pay the bill, but that is a small property rights house, and there are certain policy risks in handling it.
It is well documented that in April 2013, Huiyuan and Pioneer jointly opened Huiyuan Financial Holdings Co., Ltd. in Hong Kong, and then exported to domestic sales. In July, Beijing Huiyuan Pioneer Capital Holdings Co., Ltd. was registered and established in the name of a foreign-invested company in Beijing.
With limited public information at present, it is difficult for others to clarify the entangled equity relationship between the two companies, but from the list of directors of Huiyuan Pioneer Capital, we can see the closeness of the cooperation between the two parties.
Tianyan Check data revealed that the names that appeared on the list include Cui Xianguo, former vice chairman of Beijing Huiyuan Food and Beverage Co., Ltd., Jiang Xu, senior executive of Huiyuan Group, Li Huanxiang, chairman of Internet Information Group, Xiao Nan, chief operating officer of Pioneer Group, etc. In addition, Zhu Shengqin, the daughter of Huiyuan Group's "girl" and founder Zhu Xinli, also appeared on the list of directors of Huiyuan Financial Holdings, but judging from the industrial and commercial information, she did not work for Huiyuan Pioneer Capital.
The cooperation between Huiyuan Group and the Pioneer Group began here. In 2014, Zhu Xinli naturally led the A round of financing of Zhang Zhenxin's Internet Information Group.
invests in the P2P platform to raise funds for another physical company under its own. This behavior has a special term in the online lending industry called "self-financing". It is a typical illegal fundraising and illegal storage absorption behavior, and is the key target of crackdown for the regulatory authorities. On the eve of Netcom's backdoor listing, Huiyuan Group seized the time to sell its 1.75 million shares of Netcom's shares.
Even so, Huiyuan and Pioneer still have a lot of cross-cooperation. Huiyuan Group’s explanation for this is that since 2013, the two sides have maintained an equal and mutually beneficial relationship. Huiyuan Group and Netcom Group have successively launched financial cooperation on five agricultural projects led by Huiyuan, which has nothing to do with Huiyuan Juice and listed companies.
Looking back from this perspective, Zhang Zhenxin and Zhu Xinli's cooperation was really shot in the foot. But with Zhang Zhenxin's death, how the two met and how their cooperation began, the process gradually became a fog.
combined with vertical and Lianheng
Zhu Xinli was so eager to find an ATM for Huiyuan, and the logic was not difficult to understand. Huiyuan's financial difficulties are no longer a matter of one day or two, and it is no longer a news.
public financial report shows that since its listing in 2007, Zhu Xinli insisted on burning money to deploy upstream orchards and fruit processing, occupying a large amount of funds. In the end, he wanted to sell Huiyuan to Coca-Cola to ease the financial pressure caused by upstream. How much does Zhu Xinli love growing fruits? In the Northeast rural-themed TV series "Rural Love 4" released in 2011, Zhu Xinli played himself who wanted to build a branch in Ivory Mountain. As we all know, Ivory Mountain is rich in big apples.
Likes, but if you want to do a good job in the company, you have to consider it in the long run. With funds trapped, Zhu Xinli had to put down his figure and look for money. The Internet financial market that has emerged in recent years has become his goal. Previously, Huiyuan Juice also cooperated with Daokoudai, a subsidiary of Tsinghua Holdings . Daokoudai was overdue in the "Internet Gold Thunder Tide" in July 2018, and was later incorporated by Yirendai.
Responsibly said that before the Century deal that was stopped by the Ministry of Commerce in 2009, Huiyuan Juice was considered a reliable company. Even if the financial pressure continues, it can bring sufficient returns to its shareholders.
In 2001, Delong, which is good and bad, has no choice but to buy into Huiyuan Juice. The two parties jointly established Beijing Huiyuan. Delong holds 51% of the shares with cash of 510 million yuan, and Huiyuan invests technology and equipment, holding 49% of the shares. After three years of cooperation, Zhu Xinli expanded the production base to 20 with money, especially in Chongqing. He made 660 million yuan in one move, and opened up the largest juice production base in Asia. In 2002, the incident of spending 76.7 million yuan to win the CCTV juice advertising "market" also happened at this stage.
2001 and 2002, Huiyuan completed sales outlet expansion in 10 provinces, with sales amounts rising from 1.54 billion yuan to 2.23 billion yuan, and profits were very stable, 250 million yuan and 270 million yuan respectively. In the past two years, Zhu Xinlihua spent 2 billion yuan, which does not include the cumulative 380 million yuan borrowed by the Delong Group from Huiyuan.
03 after breaking up with the Delong Group, Zhu Xinli told the media that in the first year and a half of cooperation between the two parties, the Delong Group also drew 190 million yuan in "net profit" from the joint ventures of the two parties. After
broke up with Delong Group, the financial pressure brought by the early rapid expansion was still under the source of Huiyuan, and Zhu Xinli had to look for the next partner. The first choice of Unified Group was in the end because the investment balance of less than US$90 million has not been implemented for a long time, and it has failed to achieve many tug-of-war. Huiyuan Juice gradually got together with the French Danone , which entered China at that time.
Before signing the contract with Huiyuan, the "joint venture" pursued by Danone China Chairman Qin Peng has made great achievements in China. LeBaish , Wahaha, Guangming , Meilin Zhengguanghe, and Mengniu have all been successively earned by Danone for joint ventures.
In June 2006, the two parties officially reached an agreement that Danone acquired 22.2% of Huiyuan's equity at a total value of US$130 million, becoming the second largest shareholder.Calculated at a 1:8 exchange rate, Danone spent a total of 1.04 billion yuan on this acquisition. In 2010, when Danone withdrew from Huiyuan, it transferred the equity to SoftBank Saifu for 1.764 billion yuan, making a net profit of 700 million yuan.
However, this is also the last time Huiyuan has helped shareholders make money. Huiyuan Juice was listed in Hong Kong in February 2007. On the day of its listing, Huiyuan's stock price rose sharply, becoming the largest IPO on the Hong Kong Stock Exchange that year. Zhu Xinli also won CCTV China's Economic Person of the Year.
However, the highlight moment lasted for only half a year. Huiyuan, which has overinvested the upstream fruit planting and processing industry, has seen a sharp decline in performance. In the first half of 2008, sales fell by 5 percentage points, and gross profit fell by as much as 22.2% year-on-year. It can only achieve a 7% net profit growth based on the interest income of IPO subscription funds and the changes in the fair value of convertible bonds.
's dissatisfaction with Huiyuan's performance made Danone start to let go of information in the market, planning to sell the Huiyuan shares it holds, and eventually attracted the giant crocodile Coca-Cola , and directly tried to swallow Huiyuan.
However, after 198 days of marathon assessment investigation by the Ministry of Commerce, the transaction eventually became the first unpassed case since the implementation of the Anti-Monopoly Law, which had a traumatic impact on Huiyuan.
open champagne in advance
Zhu Xinli, who is too obsessed with upstream industry , originally wanted to transform himself into a farmer by introducing Coca-Cola , but now he is stunned.
Just as the agreement was signed with Coca-Cola at the end of August 2008, Zhu Xinli opened champagne in advance and used Beijing Huiyuan, which he controlled, to establish fruit and vegetable bases in Zhongxiang, Hubei, Hebei Longhua, Ningxia Pingluo and other places, and made large investments in the upstream industrial chain. The
project was done by the subsidiary, but the blame was borne by the listed company. The funds for these projects are all from the company's equity income that is prepaid. After the transaction with Coca-Cola was rejected, the large amount of funds originally planned to be introduced were gone, and Huiyuan withdrew most of the investment in agricultural bases and would not start construction without starting construction.
Zhu Xinli and Huiyuan have returned to the starting point.
Public opinion does not want Coca-Cola to acquire Huiyuan has a big background. In the early years, Chinese beverage factories were cheated by foreign capital, and the result of cooperation was lost.
In 1988, Arctic Ocean and Pepsi signed a cooperation agreement. The purpose of the cooperation is to produce Pepsi using the Arctic Ocean production line. The Americans who paid more than 8 million US dollars naturally don’t take the Chinese people who only took more than 3 million US dollars seriously. You just don’t do it.
The first generation of national old-fashioned soda was stopped just like this, and all the orange soda in the factory was replaced with caramel-colored Coke. It was not until 2007 that China brought Arctic Ocean back to its own hands on the condition that "it is not allowed to produce any carbonated beverage under the Arctic Ocean brand within four years."
Similar stories include Shanhaiguan soda in Tianjin and Bawangsi soda in Shenyang. It is Coca-Cola that caused these two brands to fall into a crisis of production suspension.
People have reason to believe that Coca-Cola , an American beverage vendor, traveled thousands of miles to China and planned to spend US$2.4 billion to acquire a domestic juice brand that accounts for 40% of the market share of medium and high concentrations and 100% juice. This is absolutely uneasy and we have to stop it quickly.
Sina.com conducted a famous questionnaire survey: 80% of the 550,000 netizens opposed the acquisition, and 60% of netizens were not optimistic about the prospect of Huiyuan being acquired by Coca-Cola . At this moment, nearly 300 million netizens across the country suddenly became the spiritual shareholders of Huiyuan Juice, and calls for defending Huiyuan were everywhere.
Business logic is not like anyone's voice. Although the turnover of Coca-Cola and Huiyuan in China in 2007 was US$1.2 billion (approximately RMB 9.12 billion) and US$340 million (approximately RMB 2.59 billion) respectively, both of these figures exceeded the anti-monopoly declaration threshold in relevant regulations of the State Council. But in the eyes of market participants, it is very difficult for these two companies to complete a monopoly in the Chinese juice market.
is different from the carbonated beverage market and dairy product market, and China's juice beverage market is extremely scattered.In 2008, there were more than 4,000 beverage manufacturers in the country, of which 340 were formed. Huiyuan, which accounts for 440% of the market share of medium and high concentrations and 100% juice, cannot even reach 10% of the entire juice beverage market and can only rank second.
The first is Coca-Cola , and it only has 10% of the share. In the medium and low-concentration juice market that Huiyuan has not reached, Meijuyuan has a clear advantage, which has also made Coca-Cola accidentally become the largest juice manufacturer in China.
The two companies combined have a 20% share. From a market perspective, it is far from being a monopoly. However, the reason given by the relevant departments is that if the Coca-Cola , which accounts for 60% of the market share of China's carbonated beverages, will increase its juice market, it will produce a superposition effect of strong alliances, which may lead to anti-competitive effects.
Simply put, this is called the conduction effect. Coca-Cola has a high share in the carbonated beverage market. After acquiring Huiyuan, it will enhance its brand influence on the juice market, significantly increase the threshold for potential competitors to enter the juice market, and further squeeze the living space of small and medium-sized enterprises.
In 2003, Australians rejected the acquisition request of Coca-Cola to Australia's largest juice producer Berri on the grounds of conduction effect. In 2001, the EU also used this reason to reject the acquisition of GE's Honeywell . Zhu Xinli, who opened champagne in advance, was already discussing personnel arrangements after the merger with Coca-Cola and Danone. Mei Juice Source will also be produced on Huiyuan's production line. On March 17, 2009, the transaction was terminated at the order of the relevant departments, and Huiyuan's stock price fell in response to the sound and instantly cut in half. Zhu Xinli and Huiyuan never returned to that golden age.
A person’s Huiyuan
The decade after 2009 was called by the media by Huiyuan’s “decade of blood loss”. When Coke could not be injected with juice, all the scripts written in advance were fulfilled one by one, and the false prosperity was eventually shattered by reality. Under the economic law of consumption upgrading, Zhu Xinli has been playing with concentrated juice mixed with water for almost 30 years, but it has long been unworkable.
Nilson data shows that in 2009, China's fruit and vegetable juice sales increased by 9.5%, while Huiyuan Juice only increased by 0.9%. Huiyuan's equity return rate was only 4.9%, and its diluted earnings per share was -0.069 yuan. This is just the beginning. After that, Huiyuan's profit margin has been hovering below 8% for a long time.
Zhu Xinli's explanation for the company's difficulty in making profits is that Huiyuan is a juice company in the market, and other companies have limited challenges to him, so they are less proactive in exploring the potential of the company.
According to this logic, if Huiyuan is sold to Coca-Cola , Zhu Xinli can start a new business based on his original layout for the upstream industry and build a juice brand to compete with Huiyuan, making the cake bigger through competition, but the failure of the merger and acquisition made his idea abruptly.
After Dugu Qiu was defeated, he really wanted to defeat him.
After 2009, Huiyuan, which has superimposed financial pressure and transformation pressure, began a multi-category battle. It first launched the "Lemon ME" benchmark "Water-soluble C100", and then launched the juice Coke. It wanted to kill Coca-Cola , and also made pure water.
In 2011, Huiyuan spent 12 million to buy Xurisheng herbal tea. Zhu Xinli originally planned to use it as another main brand, but after three years of operation, he completely gave up. Turning around, Zhu Xinli also told the media, "I just make some tea drinks a little, and I will still make juice in the future."
's crazy move continued until 2014. Zhu Xinli took out 3 billion yuan to try to invest in Sinopec's sales company, accounting for 0.84%. This is a very embarrassing number. In a sales company, directors cannot be elected separately. They can only be eligible to elect jointly after jointly reaching a 2.5% shareholding with other shareholders.
But Zhu Xinli felt that spending 3 billion yuan could be related to Sinopec. If Sinopec had not approved it, he would still want to invest 5 billion yuan.
Until this time, people suddenly realized Zhu Xinli's famous saying, "Enterprise should be raised as sons and sold as pigs."
In the final analysis, in Zhu Xinli's subconscious, Huiyuan is his own Huiyuan.He can only have one voice in the entire group, and he must decide everything. Even my own family can't do it. My younger brother Zhu Xinde was originally in charge of finance and production and sales in Huiyuan, but he was kicked out of the company by Zhu Xinli before he went public. He even had the idea of becoming the vice president of the Farmers Group.
The second shareholder of France Danone sent Mao Tianci, a Frenchman who was responsible for Huiyuan's strategic planning, called himself "Huiyuan's chief model". Apart from appearing on necessary occasions, he has no chance to perform in Huiyuan. On September 9, 2008, he also attended Huiyuan's mid-term performance meeting in Hong Kong. On September 12, he resigned from Huiyuan and went to Shanghai to become CEO of a weight loss company that Danone just invested in.
Other new and old ministers cannot escape the fate of being released by Zhu Xinli’s glass of wine.
is responsible for capital operation, helping Zhu Xinli beat Delong and kick the unified secretary Lu Changqing. On the third day of Huiyuan's successful listing, Zhu Xinli called him "high achievements and shocking the master" at the internal executive meeting. He resigned before the end of the year and went to Zhongwang Group. Later, he helped founder Liu Zhongtian realize his dream of going public. Another vice president of sales and marketing, Chen Zhiqiang, who was poached by Zhu Xinli from Coca-Cola , was forced to resign three months later because he publicly accused Zhu Shengqin of taking kickbacks in cooperation with advertising companies.
Huiyuan's power went around in circles among a group of people, and finally returned to Zhu Xinli.
Lenovo has five young marshals, Alibaba has eighteen arhats, but when Zhu Xinli was about to finish his curtain call, he looked around in a daze, leaving only his daughter Zhu Shengqin by his side. His son-in-law Gao Yong was once favored by him, and finally withdrew from the company due to economic problems.
, founded in 1992, is at the forefront of the wave of reform and opening up, grasping the trend of national beverage consumption at that time, quickly becoming stronger and bigger, and gaining a leading position in the industry. Zhu Xinli, also a representative of the 1992 entrepreneurs, boldly resigned from public office in response to the speech of the Southern Tour and took over a canning factory that was on the verge of bankruptcy, which created the subsequent juice myth.
Now, whether it is Huiyuan Juice or Zhu Xinli himself, he is still deeply trapped in the past, unable to see clearly or touch the future.
This year, the Hong Kong Stock Exchange sent a letter to Huiyuan: "If the conditions for resumption of trading cannot be completed before January 31, 2020, the company's delisting procedure will be initiated." The latest announcement of
Huiyuan Juice shows that the High Court of the Hong Kong Special Administrative Region ordered the hearing of the liquidation petition and the temporary liquidator's application to be postponed until March 13, 2020.
is like Chinese football, and there is not much time left for Huiyuan.
Reference:
Chinese Entrepreneur Magazine "Zhu Xinli: A Man's Back"
Caixin.com "Lessons of Huiyuan Acquisition Case"
Liu Yin "Zhu Xinli Says This"
Zeng Ziqian "Zhu Xinli's "Pig Selling Era"
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