Shulou(Shulou.com)06/01 Report--

On July 12, 2019, three squirrels (SZ300783) were listed on the gem of the Shenzhen Stock Exchange and were called "the first stock of national snacks" by the media.

A year later, on July 13, 2020, the ban on 186 million shares of the three squirrels was officially lifted, accounting for 46.38% of the total share capital.

Unlike the long-held and bullish trend of investors in other companies, investors in the three squirrels seem eager to cash out after the ban is lifted.

On July 8th, NICE GROWTH LIMITED, the second largest shareholder of the three squirrels, and its joint actor GAO ZHENG CAPITALLIMITED planned to reduce their holdings of no more than 36.09 million shares, accounting for 9% of the total share capital, and the cash amount was estimated to be about 2.879 billion yuan at the closing price of the day.

The third largest shareholder, LT GROWTH INVESTMENT IX (HK) LIMITED, followed closely, reducing its planned holdings of no more than 36.09 million shares, accounting for 9% of the total shares, and cashing out about 2.788 billion yuan according to the closing price of the day.

The two major shareholders reduced their holdings by a total of 72.18 million shares, accounting for 38.8% of the restricted shares lifted this round, with a total cash amount of about 5.6 billion yuan.

Affected by the news, the share prices of the three squirrels fell all the way from July 13, when the three squirrels closed at 79.77 yuan per share and closed at 67 yuan per share on July 31, down more than 16 percent in half a month.

Although it is normal for shareholders to cash out, there seems to be another hidden truth in such an impatient "flight".

In fact, the three squirrels developed rapidly in the year on the market, and achieved more than 10 billion yuan in revenue in 2019, but the net profit was only just over 200 million, falling into the strange circle of increasing income without increasing profit. In addition, in the channel competition with competitors, the three squirrels did not have enough advantage.

Who are the shareholders of this cash out?

On July 13th, the ban on the sale of 186 million shares of three squirrels was lifted, and five shareholders, including NICE GROWTH LIMITED, LT GROWTH INVESTMENT IX (HK) LIMITED and GAOZHENG CAPITAL LIMITED, applied to lift the ban.

The top six shareholders of the three squirrels as of the first quarter of 2020

Data show that the three shareholders are well-known international investment institutions.

NICE GROWTHLIMITED and its co-actor GAO ZHENG CAPITAL LIMITED are funds owned by IDG Capital.

LT GROWTH INVESTMENT IX (HK) LIMITED belongs to Today's Capital.

NICE GROWTH LIMITED first bought shares in July 2012, LT GROWTHINVESTMENT IX (HK) LIMITED in 2013, and Gao Zheng Capital Limited in 2014.

As of the end of the first quarter of 2020, IDG Capital and Today Capital's funds were the second and third largest shareholders of the three squirrels, with IDG's two funds holding a combined 24.83 per cent and Today's funds holding 16.73 per cent.

In fact, the proportion of shares held by the three squirrels is very concentrated, with the top five shareholders accounting for 85.87%, and the top ten shareholders holding 91.48%.

As of July 31, the total market value of the three squirrels was 26.867 billion yuan, with a price-to-earnings ratio of 151.40. The price-to-earnings ratio was much higher than that of peer shops.

Source: Oriental Wealth choice

Higher market capitalization and price-to-earnings ratios may be one of the reasons for these shareholders to reduce their holdings.

Another person from the investment bank said that it is normal for funds to reduce their holdings after the lifting of the ban on stocks, and there is no special fixed time for the reduction according to the different holding cycles of each company.

However, stocks are cashed out immediately as soon as the ban is lifted, and it also shows the capital's attitude towards enterprises on a certain level. after all, good enterprises are willing to hold for a long time.

Indeed, Warren Buffett has a famous saying: "if you don't want to own a stock for ten years, don't think about owning it for ten minutes."

This sentence confirms from the side that investors hold and are optimistic about the value of a company for a long time, while short-term holdings tend to face more risks.

On the other hand, according to the results of three squirrels, the company's revenue exceeded 10 billion yuan in 2019, but its net profit was just over 200 million, a decline compared with the same period last year. No wonder shareholders want to cash out as soon as the ban is lifted.

Why do the three squirrels increase their income but not their profits?

Speaking of nut e-commerce brands, three squirrels, miss you, good products shop can be said to be in the first echelon position in the country. Among them, three squirrels have become very popular because of their rapid development in recent years.

In February 2012, three squirrels were founded in Wuhu, Anhui Province. at the beginning of their business, the three squirrels chose e-commerce as a breakthrough, on the grounds that the nut market was absolutely mainstream offline at that time, but there were no super players online.

Four months after the establishment of the company, three squirrels launched a trial operation at Tmall Mall on Taobao.

During the Singles' Day holiday of the same year, three squirrels sold 7.66 million yuan a day, ranking first in food e-commerce sales.

With dividends from nut e-commerce, the three squirrels had revenue of $2.5 billion in 2015, compared with more than $3 billion negotiated by offline nut companies at that time.

In the following years, with the help of a series of brand-building initiatives and market movements, the three squirrels ushered in a period of rapid development.

On March 29, 2017, three squirrels submitted a prospectus to the Securities and Futures Commission and officially entered the capital market.

In October 2017, three squirrels suspended censorship because of the resignation of a signed lawyer.

On October 31, 2017, the three squirrels updated their prospectus and their IPO applications returned to normal review.

On December 8, 2017, the CSRC announced that the three squirrels would make their debut that week.

However, on December 12, the Development and Review Commission of the CSRC issued a supplementary notice at its 72nd meeting, saying that the initial issue of the three squirrels "still needs further verification" and decided to cancel the review of their issuance application documents.

On June 25, 2018, three squirrels entered the IPO queuing phase for the third time and IPO three times in two years, which is also rare in domestic enterprises.

The waiting was not in vain. On July 12, 2019, three squirrels were successfully listed on the Shenzhen Stock Exchange, stock code 300783, up to July 26, 11 trading days in a row.

Source: financial report of three squirrels

According to the financial report, the revenue of the three squirrels rose to 10.173 billion yuan in 2019, which mainly depends on the revenue from online sales: the operating income from online sales is 9.869 billion yuan, accounting for 97% of the business income, because the company is better at seizing the activities of Singles' Day and double Twelve. The main price war.

In contrast to the skyrocketing revenue data, the net profit of the three squirrels was only 239 million in 2019, down 21.43% from a year earlier and basically returning to the 2016 level.

Increasing income without increasing profits is not a "new thing" that appears after listing.

Looking back over the past four years, the year-on-year growth rate of the net profit of the three squirrels was 2535.44%, 27.70%, 0.61% and-21.43% respectively, which can be said to be a cliff decline.

In the first quarter of 2020, the company achieved a net profit of 188 million, a year-on-year growth rate of-24.58%.

Source: financial report of three squirrels

The reasons for increasing income and not increasing profits are as follows: first, the gross profit margin of three squirrels is lower than that of the same industry.

In 2019, operating costs accounted for 72.21% of operating income, while Yanjin stores and quality shops accounted for less than 70% of operating costs.

Rising costs have led to a decline in the gross profit margin of the three squirrels in recent years, with a gross profit margin of 27.8% and a net profit rate of 2.35% in 2019, almost at the bottom of the industry.

Data source: financial reports of companies

Second, the three fees have increased, especially the increase in sales expenses.

Sales expenses remain at more than 20 per cent of operating revenue, reaching 2.298 billion in 2019, almost 10 times the company's performance.

Because the company is gradually expanding the scale of business, the corresponding advertising costs, transportation costs, decoration costs are also increasing; management expenses and R & D expenses have increased slightly, which is caused by the increase in staff salaries and R & D expenses.

Source: financial report of three squirrels

In terms of inventory data, the performance of the three squirrels is not optimistic.

According to the financial report, by the end of 2019, the inventory of the three squirrels was 2.48 billion yuan, accounting for 51.21% of the assets, far ahead of other major brands in the same period.

Good products shop 25.34%

Laifen 14.89%

I miss you 25.88%.

Yanjin shop 11.79%.

What's more, the cash flow and asset structure of the three squirrels are not ideal.

The company's net operating cash flow also showed a negative value of-329 million yuan in 2019.

From 2017 to 2019, the proportion of monetary funds in its asset structure was 19.16%, 26.38% and 20.04%, while accounts receivable accounted for 6.42%, 9.81% and 5.38% in the same period.

From this point of view, the dilemma of the three squirrels is not only to increase income but not to increase profits, the problem of capital chain is also beginning to surface.

In addition to multiple performance problems, the three squirrels have also encountered many challenges in terms of expansion in recent years.

What are the advantages of the channel struggle?

As mentioned above, the three squirrels caught up with a good wave of online dividends at the beginning of their start-up, and their turnover is also rising year by year.

Although the e-commerce channel helped the three squirrels reap gratifying revenue, it also exposed the disadvantages of its single channel.

The data show that from 2016 to 2018, the revenue of the three squirrels from the e-commerce platform accounted for more than 85% of the total main business income, namely 95.46%, 93.92% and 86.67%. Among them, the sales revenue realized through Tmall platform accounted for 72.44%, 66.97% and 57.26% of the main business income, respectively.

In 2019, the revenue of the three squirrels on third-party e-commerce platforms reached 9.869 billion yuan, accounting for 97% of the revenue.

The over-reliance on online channels, especially on the "Tmall" platform, has led to rising corporate expenses and the gradual loss of premium capacity, which has limited the profitability of the three squirrels.

In addition, with online traffic nearing its peak, "walking on one leg" is obviously not a wise move, and three squirrels have begun to bet offline in the past two years.

As of June 4, 2020, a total of 553 offline stores have been opened by the three squirrels, including 126 direct-operated stores and 427 alliance stores.

Among the traditional first-tier cities (Beijing, Shanghai, Guangzhou and Shenzhen) and four municipalities directly under the Central Government, only Beijing does not have a direct store for three squirrels.

The promotion of offline channels made the three squirrels pay a high "price", and there was a gap between online and offline gross profit and net profit.

After three squirrels made great efforts to develop offline:

The gross profit margin in 2019 was 27.8%, down 0.45 percentage points from the same period last year.

The net interest rate was 2.35%, down 1.99 percentage points from the same period last year.

Data source: public information

In addition, at the end of 2019, the SKU of the boutique store was 1400 yen, while that of Laifei reached 800 million, while the overall SKU of the three squirrels was 500 million, significantly lagging behind the above brands.

In April this year, three squirrels announced that they planned to use 42.2562 million yuan of their own funds to invest to set up four wholly-owned subsidiaries-Tiegongji, Lan Lan of Little Deer, raising a hairy child and Xi Xiao Finch, which are respectively located in convenient fast food, baby food, pet food and wedding gifts.

The move is seen by the outside world as a major move by three squirrels to expand their SKU.

However, several new product directions announced this time are quite different from the previous categories of the three squirrels. Although convenient fast food, baby food, pet food and wedding gifts are almost all "tuyere", there are many competitors, and the industry is already a "Red Sea" trend.

Whether the three squirrels have a mature style in the new field, and whether Zhang Liaoyuan is good at building new brands is also a big question.

As of press time, we tried to search for the above new brands in JD.com Mall and found that on the premise of ranking by sales volume:

Tieongji convenient instant rice noodles ranked first in 340g × 3 boxes, but only 10 + pieces were evaluated.

Evaluation of Little Deer Blue Blue freeze-dried Cheese Block 36g/ Box with 30 + bars

Raised a hairy child English short cat special food 2.55kg evaluation of 0

The related products of Xi Xiao Finch have not been found yet.

Under this premise, how to quickly improve the product SKU and maintain product quality stability has become the focus of the three squirrels.

The "porter" model is questioned.

How to solve the security problem?

"Safety comes first". For all food enterprises, food safety is a top priority.

According to the prospectus of the three squirrels, the three squirrels adopted the production mode of factory foundry.

That is, they do not produce a nut, they all entrust a large number of suppliers to "contract production", and then the finished products are transported to the factory of three squirrels, which are responsible for packaging and sales, and the three squirrels are just a "porter".

Although this model can save a large amount of risk and cost of fixed assets investment, but outsource the most important production links to suppliers, so that it has no way to control the production process, so as to ensure the quality of products.

Since 2014, three squirrels have been exposed several times for food safety problems and were caught in a sensational "mold gate", according to media reports.

In February 2016, three squirrels and a melon seed were found to have excessive cyclamate content.

In May 2016, three squirrels were fined for adding drugs to food and producing food from non-food raw materials.

In August 2017, three squirrels in the critical period on the market were notified by the State Food and Drug Administration because of food safety problems, because their pistachio mold was unqualified, 1.8 times higher than the national standard.

In October of the same year, the Food and Drug Administration of Anhui Province reported that three squirrels were punished by an administrative penalty of 50,000 yuan for producing food that did not meet food safety standards and failing to inspect the purchased food raw materials.

In addition, from July 2016 to February 2017, three squirrels were sued by 14 consumers in a row and claimed about 2.16 million yuan for substandard products.

Photo Source: black Cat complaint

By 2020, the quality problems of the three squirrels will still persist.

As of August 1, 2020, there were as many as 808 complaints about three squirrels, mainly related to hygiene and quality problems, such as moldy products, hair, insects and foreign bodies, according to black cat complaint data on the online complaint platform.

In addition, the enterprise check data show that three squirrels Co., Ltd. have their own risks 92, of which the enterprise was sued for product liability disputes accounted for 8.

The above data reflect the urgent need to improve the food safety quality of the three squirrels.

In the fierce market competition, if we do not pay attention to product quality and safety, the faster the enterprise runs, the faster it may "fall".

Summary

It is only a year since the three squirrels went on the market, and the ban has been lifted only a few days, and the major shareholders have directly reduced their holdings by 9%. The meaning of "flight" is obvious.

Although it is a normal operation for shareholders to reduce their holdings and cash out after listing, a large-scale reduction and cash out of holdings will cause great fluctuations in the capital end of the stock, and it will also make a large number of retail investors doubt the future of holding the stock. it will even be considered to be cutting leeks, especially the current situation that the three squirrels do not increase their profits.

Of course, several major shareholders not only through the reduction of tangible benefits, the announcement showed that in 2019, the three squirrels distributed a total cash dividend of about 100 million (including tax), with a dividend rate of 41.99%.

Because of the concentration of equity in the company, the controllers Zhang Liaoyuan, IDG Capital and Today Capital together received a dividend of about 82 million.

You know, the company's net profit that year was only 239 million, and almost half of it was taken out to share out dividends.

With the listing of Yun Zhong in February this year and Pepsi's acquisition of Pepsi on June 1 International Children's Day, the strength of the two main competitors has been strengthened.

This makes the three squirrels on the snack track already facing a lot of challenges, and now the three major shareholders have reduced their holdings on a large scale, which is even worse for the three squirrels.

Welcome to subscribe "Shulou Technology Information " to get latest news, interesting things and hot topics in the IT industry, and controls the hottest and latest Internet news, technology news and IT industry trends.