How is the former “juice king” now?
1、 The only brand that has fully retired from Delong
Tang Wanxin, although a small man, is also a well-known figure in the Chinese business community.
The “Delong Group” under his previous leadership was once one of the largest private enterprises in China. At its peak in 2003, Tang Wanxin controlled multiple listed companies through the Delong system, with a total market value of over 120 billion.
But according to some gossip later, Tang Wanxin had two people who didn’t take care of him.
The first is Mou Zhongqi. This is a ruthless person who can exchange 500 wagons of goods for four Soviet planes and wants to transform Manchuria into a northern Hong Kong.
Mou Zhongzhong and Tang Wanxin served sentences together in Hongshan Prison in 2007. Although Tang Wanxin, 24 years younger, is already China’s No. 1 Fierce Manor, after seeing a business legend, he is not allowed to take the initiative to show his kindness to him and said he wants to lend his mobile phone to Mou Zhongzhong.
“But Mou Zhongzhi only” sideways glanced at him and gave him a disdainful ‘hum’, ignoring him. Tang Wanxin, at this moment, was as shy as a little girl, and his face suddenly turned red. “”
The other is Zhu Xinli, who may not be as famous as Mouzhong, but as the founder of Huiyuan, the fruit juice king, he is also admired by everyone in the Chinese business community.
Zhu Xinli was earlier than Mou Zhongqi to “face the foundation” with Tang Wanxin. As early as 2000, Tang called Zhu and invited him to visit Xinjiang.
At that time, Huiyuan had been established for eight years, and its annual sales of 1.2 billion yuan accounted for over 20% of the industry’s share. Zhu Xinli hopes to make Huiyuan bigger and stronger again, but unfortunately he doesn’t have enough money. Tang Wanxin happens to be a “big rich man”.https://store.stoneitech.com/
But many people are slightly guilty about this. Once eaten by the Delong family in this capital game, no enterprise can escape.
As expected, after Huiyuan and Delong established a joint venture, Tang Wanxin began to constantly seek Huiyuan to borrow money due to the rescue of the market. Two people have been holding hands for one year, and he has borrowed 380 million yuan from Huiyuan.
Huiyuan seems to be sinking deeper and deeper in the mouth of the Delong system. Therefore, Zhu Xinli and Tang Wanxin had a showdown, and whoever could spend 800 million yuan in one week would buy the other party’s shares and break up completely.
Compared to the “rich man” in terms of working capital, everyone is saying that Zhu Xinli is too impulsive. But unexpectedly, Tang Wanxin finally withdrew, and Huiyuan became the first and only enterprise in history to withdraw from the Delong family.
Obviously, Zhu Xinli can play with capital. A few years later, in 2007, Huiyuan successfully landed on the Hong Kong Stock Exchange, raising HK $2.4 billion, creating the largest IPO of the Hong Kong Stock Exchange that year.
2、 The Chinese version of Coca Cola’s disaster originated from being praised by Buffet’s characteristics
Zhu Xinli and Huiyuan are renowned for their success against the Delong system and IPO. How influential is this? Buffett, the stock god in the United States, has been eyeing him.
During the joint venture with Delong, Tang Wanxin took 510 million yuan in cash as a shareholder. With the momentum of this money, Huiyuan has built more than 20 production bases, and even went to Chongqing to invest in building the largest fruit juice production base in Asia.
It is said that at that time, there were only 14 PET production lines in the country, and Huiyuan alone possessed 11.
Adding in the 2.4 billion Hong Kong dollars raised by PO, Huiyuan Fruit Juice achieved a record of 32 production bases and 20 plantations nationwide in 2008.
These data were publicly disclosed through the Hong Kong Stock Exchange and converted into several strings of bytes, which flowed to the city of Obaha, Nebraska, in the central United States, with a population of only 400000. Buffett’s office is over there.
Buffett, who saw the data, also specifically found Coca Cola executives to remind them to pay attention to Huiyuan Juice as far away as China.
Coca Cola is Buffett’s most proud investment in his life, earning $12 billion from it in 1988-1998. In Buffett’s eyes, Huiyuan Juice is China’s “Coca Cola”, which is very worthy of investment. 
Upon instructions from the stock god, Coca Cola arrived in China in early 2008 and planned to acquire Huiyuan. At that time, the stock price of Huiyuan Juice was 4.14 Hong Kong dollars, but Coca Cola directly wanted to buy the entire Huiyuan with 17.92 billion Hong Kong dollars. Calculated, it is equivalent to 12.2 Hong Kong dollars per share.
Anyone who sees this number is very tempting, and Zhu Xinli is no exception.
Besides, Zhu Xinli is really tired. Since starting his business in 1992, he said he had not taken a day off. If Huiyuan could be sold to a giant like Coca Cola, it would be like trusting a daughter to a responsible person.
At the very least, employees and shareholders will not be harmed from their interests.
For this reason, Zhu Xinli’s next days are devoted to the acquisition and delivery. Coca Cola has its own channels, and Huiyuan was asked to eliminate its sales channels, which led to more than 4000 layoffs a year, nearly 50%. In addition, he has invested 2 billion yuan in two months to build fruit production bases in various regions.
But during this period, a major event occurred in the milk industry next door. International milk aseptic packaging companies such as Tetra Pak and SIG have entered China, requiring companies to exclusively purchase their own packaging through low-cost sales of filling production lines, quickly seizing the market.
Later, two employees of Tetra Pak resigned and planned to do the same business. However, in the next few years, business has been restricted by this exclusive agreement, so this phenomenon of market monopoly through bundling agreements has been reported.
It is said that these two employees have brought materials to the Ministry of Commerce, the National Development and Reform Commission, and the People’s Congress for eight consecutive antitrust complaints. Later, some media summarized its significance and said that it had to some extent promoted the establishment of China’s anti monopoly law.
On August 1, 2008, the “Anti monopoly Law” was officially implemented.
Zhu Xinli was unlucky, and the Anti monopoly Law was implemented before Coca Cola acquired Huiyuan. After review by the Ministry of Commerce, it was ultimately determined that the case did not comply with the provisions of the Anti monopoly Law, and the acquisition was suspended.
The acquisition was called off, but the preparations for the acquisition were unable to brake sharply.
First, the downstream sales system has been abolished, and shipping is a problem. In 2009, Zhu Xinli had to accelerate the restoration of the sales system. In that year, the company, which originally had more than 5000 employees, expanded to more than 17000, with sales exceeding 13000.
But can a large number of people sell goods? not always. In 2009, Xu Lei, who is also the vice president of JD, said that this was the first year of the explosion of the B2C e-commerce industry. Traditional enterprises such as Lenovo, Haier, and Li Ning have also stepped into online channels.
However, Zhu Xinli has found 13000 sales personnel and is still immersed in the channels of supermarkets and convenience stores. Huiyuan went online, which was still five years later.
Secondly, the rapidly constructed upstream is not operating at all.
It costs money to build, but the capacity utilization rate of the upstream production base is chronically insufficient. In 2014, a report stated that Huiyuan had opened 48 production bases nationwide, but its capacity utilization rate was less than 30%.
“The downstream cannot be sold, and the upstream cannot be produced. Huiyuan juice is a dilemma.”. For many years thereafter, Huiyuan had to balance its profits by selling assets. However, in 2017, this company was exposed to a debt of 11.4 billion, while its assets were only 4.5 billion.
Zhu Xinli was repeatedly enforced, with a debt of over 6 billion yuan. A generation of practical entrepreneurs eventually became Laolai.
3、 A persistent problem in family management that cannot be ignored
In August 2018, Huiyuan was suspended from trading. The Hong Kong Stock Exchange has proposed that if Huiyuan Juice fails to meet all the conditions for resumption of trading by January 31, 2020, the listing department of the Hong Kong Stock Exchange will initiate a process to cancel its listing status.
On January 18, 2021, the Hong Kong Stock Exchange announced that Huiyuan Food was delisted. In June, Wensheng Asset, as a restructuring investor, invested 1.6 billion yuan to become the controlling shareholder of Huiyuan.
Wensheng assets are known as capital vultures. It has long been rooted in the field of non performing assets in China, and has participated in or led the bankruptcy and restructuring of enterprises such as La Chapelle, the real estate company Sansheng Hongye, and Nanjing Expressway.
In that year, Huiyuan Fruit Juice achieved positive growth, with revenue increasing by 49.7% year-on-year and gross profit margin reaching 39.5%. By the first half of 2022, Huiyuan’s juice e-commerce channel sales had also achieved a 300% growth. In addition, Huiyuan Juice has hired the popular star Yi Jian Qianxi as its spokesperson. In the past two years, we have also collaborated with the anchors and spokespersons for bringing goods, including Luo Yonghao, Jia Nailiang, Qi Wei, Zhang Mofan, and others.
In the 2023 New Year’s dedication, Huiyuan Juice also stated that in the next three years, the company will achieve annual sales of more than 10 billion yuan, market capitalization of more than 50 billion yuan, and focus on 100% juice as a first-class company with light assets, low liabilities, high profits, and high cash flow.
However, the focus is still on debt. If Huiyuan Juice can truly shake off the debt crisis, it is not impossible to return to the throne.
So, from the perspective of business operations, what will be the biggest changes in Huiyuan after the reorganization? Upstream industry chain or downstream sales system? At this point in writing, I think it should be another aspect of the issue: management.
Between 2009 and 2017, Huiyuan Juice was constantly rescuing itself, and the imbalance between upstream and downstream development could not be remedied for eight years. A major problem lay in management.
Essentially, Huiyuan should be a family owned enterprise, with Zhu Xinli’s brothers and children all holding important positions in the company.
Zhu Xinli realized this early on, so he sought out executives from Coca Cola, Uni-President, and even Tetra Pak, the aforementioned milk packaging company, to serve as professional managers. But each time they didn’t last long, and ultimately Zhu Xinli was the only one to shoulder the burden.
In 2013, Zhu Xinli resigned again and appointed Su Yingfu as the new president. However, as soon as Su Yingfu took office, he began to remove the original business department system and bring more than 30 former subordinates to the front of the stage.
This kind of innovation similar to “seizing power” clearly affected the interests of the Zhu Xinli family, and it is rumored that there were internal tensions at that time. After a year, Su Yingfu resigned, and the board of directors nominated Zhu Shengqin, Zhu Xinli’s daughter, to take power.
The so-called “professional manager” has returned to the hands of the family.
The baton of Huiyuan Juice was eventually handed over from the family to professional managers after Wensheng Asset took over. Perhaps this is the key to the resurgence of the juice king.
How is the former “juice king” now?