Zilin Vinegar's Public Offering Again

Recently, the vinegar production company Zilin Vinegar has released an IPO prospectus and plans to land on the Shanghai Stock Exchange.

The ownership structure is a "mom and pop shop"

This is not the first time Zilin Vinegar has hit an IPO

The third time was submitted on July 3, 2020.

From the perspective of ownership structure, Zilin Vinegar is a typical mom-and-pop shop

Regarding the use of the raised funds, the prospectus disclosed that the 574 million yuan to be raised will be used for the construction of brewing vinegar production line with an annual output of 100,000 tons, marketing network construction and brand promotion, enterprise informatization construction and Shanxi Vinegar Engineering Technology Center construction and other projects

It is worth noting that the prospectus also disclosed the trademark dispute between Zilin Vinegar and Hengshun Vinegar

On August 15th, Zilin Vinegar signed a settlement agreement with Hengshun Vinegar to compensate Hengshun Vinegar at one time, including but not limited to economic losses, litigation fees, attorney fees, taxes, and all other amounts involved in the alleged infringement.

Industry development is facing impact

According to the statistics of China Condiment Association, from 2018 to 2020, Zilin Vinegar ranked second in the industry in terms of vinegar production scale, and Hengshun ranked first.

From 2018 to 2020, Zilin Vinegar achieved revenue of 506 million yuan, 547 million yuan, and 620 million respectively; the net profit in the same period was 79.

Judging from the specific financial data, there is still a certain gap between Zilin Vinegar and Hengshun Vinegar

In terms of gross profit margin, from the end of June 2018 to the end of 2021, the gross profit margin of Zilin Vinegar Industry was 39.

　　In the first half of 2021, the growth of social consumption was lower than expected, triggering a pessimistic attitude of capital towards the consumption sector

　　Regarding the performance of condiment companies, some industry insiders believe that it is affected by the sudden rise of community group buying

　　Since 2020, the rise of community group buying has had a major impact on the traditional retail industry, resulting in a significant reduction in customer traffic and a general decline in performance in supermarkets, which are the most reliant sales channels for condiment companies

　　Community group buying develops with a low-price strategy, driving down the overall retail price of commodities

　　In addition, rising raw material prices have also greatly squeezed the profit margins of condiment companies

(Zhou Tingfu)  

　　"China Food News" (04 edition on October 7, 2021)

(Editor in charge: Zhou Yan)