On February 28, China Tea Co., Ltd. (hereinafter referred to as “China Tea”) disclosed the prospectus, and the company plans to be listed on the main board of the Shanghai Stock Exchange. It is worth mentioning that China Tea disclosed its prospectus for the first time in July 2020, disclosed its feedback in November of the same year, and then updated its prospectus in February 2021, but there has been no news about China Tea’s IPO since then. .
At that time, China Tea planned to raise 540 million yuan, which would be used for the production capacity construction project of Yunnan Pu’er tea, marketing network and brand building projects. However, compared with the previous IPO, China Tea’s “lion’s big opening” plans to raise 1.14 billion yuan, doubling the amount of funds raised. In fact, there are a total of three projects in this fundraising. The first two projects have the same amount as the previous IPO, but there is an additional 600 million yuan supplementary working capital project. Could it be that China Tea has been very short of money in recent years?
In fact, China Tea is not short of money. As of the end of June 2022, the company still has 605 million yuan in cash on its books. In addition, China Tea will have a cumulative cash dividend of 241 million yuan in 2019 and 2020.
According to the data, the main business of China Tea is the research and development, production and sales of various teas and related products. The main products include oolong tea, Puer tea, black tea, white tea, green tea and related products. “Seawall”, “Monkey King”, “Century Wooden Warehouse” and other product brands.
According to the prospectus, the history of Chinese tea can be traced back to the 1940s. In November 1949, China Tea Company (the predecessor of China Tea) was established, and Wu Juenong, who was the Deputy Minister of Agriculture and “Contemporary Tea Saint” at the time, served as the first manager; during this period, after adjustments such as mixed ownership reform, the company was changed as a whole in 2018 For a company limited by shares.
At present, Zhongtu Animal holds 40% of the company’s shares and is the promoter and controlling shareholder of China Tea. Based on the concerted action arrangement between China Native Animals and China Tea’s employee shareholding platform, COFCO Group can indirectly control 55% of China Tea’s shares through China Native Animals, and is the actual controller of the company.
Although as a company directly under the control of the central enterprise COFCO Group under the State-owned Assets Supervision and Administration Commission of the State Council, China Tea Sprint A-share “tea No. 1 stock” seems to have a background “advantage”. The root cause of the difficulty is also one of the reasons why A shares do not like to drink tea.
In terms of finance, from 2019 to 2021 and from January to June of 2022 (hereinafter referred to as the “reporting period”), China Tea’s operating income was 1.634 billion yuan, 1.893 billion yuan, 2.434 billion yuan and 1.423 billion yuan, net of 1.423 billion yuan attributable to the parent. The profits were 166 million yuan, 239 million yuan, 284 million yuan and 198 million yuan respectively.
Although it is said that the performance of tea companies is sluggish, judging from the performance of China Tea, the company’s performance is showing an upward trend, and its gross profit margin is relatively stable. During the reporting period, the comprehensive gross profit margins of China Tea’s main business were 40.56%, 40.4%, 42.96% and 42.36%, respectively.
However, during the reporting period, China’s tea production capacity was not saturated, and the company’s production capacity utilization rates were 58.71%, 61.6%, 71.43% and 75.49%. In this IPO, China Tea also plans to invest 289 million yuan in the production capacity construction project of Yunnan Pu’er tea, which is expected to achieve a processing capacity of 3,000 tons/year of pressed tea, 500 tons/year of small-package Pu’er loose tea, and 250 tons/year of Yunnan black tea. tons/year.
In fact, in the previous feedback, the China Securities Regulatory Commission also paid attention to the situation that China Tea still raises funds to expand production even though its production capacity is not saturated, and whether the company can absorb the new production capacity in the future. Blue Whale Finance sent a letter to China Tea regarding whether the IPO fundraising and production expansion is reasonable, but as of press time, the other party has not responded.