Sichuan is going to have another IPO.
The investment community – Tiantian IPO learned that this week, Sichuan Baijia Akuan Food Industry Co., Ltd. (hereinafter referred to as Akuan Food) updated its prospectus and continued to promote the IPO process on the main board of Shenzhen Stock Exchange. Once A-Kuan Food is listed successfully, it will become the “first share of instant noodles” of A-share.
This time, A-Kuan Food updated its business data for the first three quarters of 2022, and one of the biggest changes was that the name of Wang Xiaofei’s brand “Maliuji” appeared in the prospectus for the first time. The second largest customer of A-Kuan Food’s OEM business is Ma Liuji, and other customers include Li Ziqi.
Founded in 2016, Akan Food headquarter is located in Chengdu, Sichuan Province. It has two major brands, “Akan” and “Baijia Chenji”, focusing on instant noodles, instant noodles, instant rice noodles, and self-heated foods with Sichuan characteristics. Especially during the epidemic, Akan Food can sell 500 million yuan a year just by “red oil noodles”. Prior to that, Akuan Food has rapidly completed multiple rounds of financing, with investment institutions such as Tongchuang Weiye, Gaoling, Qianhai Master Fund, Zhongyuan Capital, Maixing Investment gathered behind it.
So far, we have seen a gathering of Sichuan flavor IPO forces – Tianwei food selling hot pot seasoning, Qianhe flavor industry selling seasoning, Dandan bean paste selling Pixian bean paste, and Yamazi selling rattan pepper oil The lineup is huge.
1、 Resigning as a civil servant, Chongqing people are selling instant noodles and preparing to go public
Behind A Kuan Food stands Chen Zhaohui, a 60 year old from Chongqing.
Chen Zhaohui, a young man born in 1969, graduated from the China Youth University of Political Science with a major in law and worked for the Youth Department of the Communist Youth League in Chengdu for two years. Because he was not accustomed to the step-by-step office life, he later resigned as a civil servant of the Youth League Municipal Committee and entered Sichuan Pepsi Cola Beverage Co., Ltd. to engage in marketing work. In 1994, Chen Zhaohui decided to resign again and officially go to the sea to start a business. He borrowed money to set up an advertising company and began selling some small foods.
In the millennium, instant noodles, fans and other instant food products are very popular in the market. There is a story circulating in the street. One day in 2000, Chen Zhaohui went to Chengdu Airport to meet his friend. At midnight, the two had to fight at a roadside stall of “Shuangliu Baijia Fat Intestine Noodles”. Unexpectedly, the ordinary fans made friends rave, “If the fat Intestine Noodles were made into convenient fans like instant noodles, it would definitely make a lot of money.”
Chen Zhaohui was greatly inspired by a friend’s unintentional remark. After doing sufficient market research, he founded Sichuan Baijia Food Company in 2001, and officially started the business of convenience fans, which is the predecessor of “A Kuan Food”. At that time, Chen Chaohui had passed his thirties.
At the beginning, Baijia Food was mainly composed of hot and sour powder, fat sausage powder and other products. The taste met the hot and spicy needs of consumers in Sichuan and Chongqing, and was differentiated from conventional instant noodles. In addition, the founder Chen Chaohui, who was born in advertising planning, was familiar with the marketing methods of the fast consumer goods industry. Soon, the sales of Baijia hot and sour powder rose, and the sales in the first year easily exceeded 40 million yuan, In just two or three years, the sales scale has exceeded 100 million.
However, spicy and sour noodles are only a small category of convenience foods. Relatively few people eat “fan” as their staple food. Baijia Food has encountered a development bottleneck in just a few years. Later, I encountered a trademark dispute with Baixiang Group. Chen Zhaohui has been with the company’s people for five or six years. “Baijia Food has quickly achieved the first place in the country in terms of hot and sour noodles, but its annual sales volume is only a few hundred million, reaching the ceiling of the hot and sour noodles category. It is difficult for enterprises to linger for a long time before making a breakthrough,” Chen Zhaohui recalled in an interview.
In 2015, with the upsurge of mobile Internet, Chen Zhaohui began to lead the strategic transformation, transforming the company from a traditional enterprise to an Internet company, and also carried out a drastic reform in the product structure. Two years later, the company put forward the concept of “new convenient food”, and its products also expanded new convenient food, such as red oil noodles, sweet water, self heating barbecue, self heating hot pot, Luosifen, which are mainly local characteristics and non fried instant noodles.
According to Chen Zhaohui, their fans are no longer the original dry powder, but made of wet Rice noodles. They use fresh Rice noodles in convenience food, including its sweet water. The noodles are all wet noodles and can be eaten after boiling for two minutes, completely restoring the flavor of the restaurant.
A series of iterations and reforms have brought Baijia Food back to its normal development track. According to data, since 2017, the growth rate of 100 food products has exceeded 40% every year. From January to May 2020, sales increased by 120% year-on-year, and profits doubled. In 2021, “Baijia Food” officially changed its name to the familiar “Ahan Food”.
Over the past 20 years, Akun Food has finally occupied a place in the changing consumer market. According to the data of Euromonitor/Everbright Securities Research Institute, from 2018 to 2021, the compound growth rate of the sales of Akan Food ranked first among the top ten manufacturers in the industry, and the sales of instant noodles in 2021 ranked among the top three domestic brands.
In fact, as early as 2017, A-Kuan Food launched its IPO strategy and set 2018 as the first year of its three-year listing period. Now, around the corner, A-Kuan Food has come to the gate of IPO again. If successful, 54-year-old Chen Chaohui is expected to get his first IPO in his life.
2、 With an annual revenue of 1 billion yuan, he has commissioned the work for Wang Xiaofei, and jointly created a great cause and invested
How can inconspicuous convenience fans support an IPO?
First of all, for C-end consumers, the main products of A-Kuan Food are new type of convenience food, which are produced by non-fried technology, mainly including instant noodles, instant noodles, instant rice noodles, self-heated food and other categories, among which the most well-known is the “red oil flour” series products – selected wheat flour as raw material, made by high-temperature ripening and other processes, with the company’s special seasoning package, It can make the product better restore the regional characteristic flavor, and has the characteristics of non-fried, non-boiled, wide noodles and chewy strength.
With the iteration of taste and aesthetics of convenience food consumer groups, the consumer groups are more willing to try new things and have varied interests. The appeal of traditional brands and products has weakened. At this time, Akan Food has continuously upgraded the form, packaging and marketing methods of the “red oil noodles” series of products, and successfully built it into a hot product, creating a new category of instant noodles.
In addition, under the influence of the epidemic, consumers’ demand for convenience food is increasing day by day, and Akan’s “red oil noodles” are becoming popular. According to the prospectus, in 2021, the annual sales of the “red oil noodles” series products will be about 500 million yuan, with a cumulative sales of more than 100 million copies.
In terms of operation, A-Kuan Food adopts the sales model of combining direct sales with distribution and all-channel access. By the first half of 2022, Akuan Food has more than 1000 offline distributors, each of which can cover several or even dozens of sales terminals. At the same time, A-Kuan Food’s supermarket customers cover large and medium-sized supermarkets such as Wal Mart, Wumart, Yonghui Supermarket, RT Mart, Hongqi Chain, etc., forming a sales network centered in the southwest region, radiating to large and medium-sized cities in China, and has been exported to the United States, Canada and other countries and regions.
On line, the company has also established in-depth cooperation with many e-commerce platforms, such as JD, Tmall, Pinduoduo, Tiktok, Kwai, and achieved coverage of most online shopping consumer groups.
In addition to direct sales of its own products, Akuan Food also has another well-known business – OEM. According to the prospectus, Akuan Food has provided OEM services for three well-known consumer brands, including Squirrel, Baicaowei, Li Ziqi, Mingchuangyoupin, Laiyifen, Liangpin Shop, KFC, Netease Yanxuan, Mint Health, Yang Guofu, and Ma Liuji. For many years, it has been called “the net red after the net red”.
It is worth noting that in the first half of 2022, Ma Liuji, who served as a director of Wang Xiaofei, directly jumped to the second largest customer in the customized sales business of Akuan Food. At that time, Wang Xiaofei was in uproar because of the family dispute with the star Big S, which directly contributed to the soaring sales of the “Malauji” hot and sour powder created by the former. Malauji ordered the branded hot and sour powder products of Akuan Food at a time of 15.9287 million yuan in half a year. Prior to that, from 2019 to 2021, Ma Liuji had not been listed in the top five customers of A-Kuan Food.
According to the prospectus, from 2019 to 2021, the revenue of Ahan Food was 631 million yuan, 1.11 billion yuan, and 1.214 billion yuan, respectively, with a compound annual growth rate of 38.72%; The net profit was 24 million yuan, 76 million yuan, and 56 million yuan, respectively. In the first three quarters of 2022, Arhan Food’s revenue increased by 3.39% to 927 million yuan, and its net profit increased by 32.84% to 48 million yuan.
Among them, the customized channel revenue of Akan Food in the first half of 2019 to 2022 was 68 million yuan, 150 million yuan, 142 million yuan and 84 million yuan respectively, accounting for 11.18%, 13.36%, 11.56% and 12.63% of the main business. Not in the direct sales orders in the first half of 2022, the gross profit margin of customized sales was only 17.32%, while the gross profit margin of self-operated brand e-commerce and dealers in the same period could reach 30.36%.
In just a few years, A-Kuan Food has also gained the support of VC/PE, and there are many institutions standing behind it, including Tongchuang Weiye, Gaoling, Qianhai Master Fund, Thirteen Capital, Zhongyuan Capital, Maxing Investment, Jiangu Capital, Maotai Jianxin Fund, Binfu Capital and so on. Before the IPO, Tongchuang Weiye was the largest institutional investor of A-Kuan Food, and Hillhouse Venture Capital also held more than 5% of the shares.
This time, the prospectus also disclosed the gambling situation between various investors and A-Kuan Food, and everyone was waiting for the arrival of this IPO.
3、 Sichuan has run out of an IPO corps to contract your table
Tracing back to the consumption IPO in Sichuan, we can see a large table army.
What is impressive is that Sichuan Tianwei Food was successfully listed in 2019, becoming the “first hot pot seasoning stock” of A-share. Founded in 2007, Tianwei Food is mainly engaged in the research, development, production and sales of Sichuan compound seasoning. Its core brands are “Dahongpao” hot pot base, “Haojia” Sichuan seasoning, and “Tianche”. Its domestic business is booming, and it is also exported to the United States, Britain, Canada, Australia and other countries.
In 2022, Tianwei Food sold more than 40000 tons of hot pot seasoning, making a net profit of 300 million yuan, with the latest market value exceeding 20 billion yuan. Its founders, Deng Wen and Tang Lu, are also active in the venture capital circle. They have not only invested in several startup companies, but also started LP.
There is also Qianhe Flavor Industry running out of Sichuan. Known as the “small and beautiful western soy sauce leader”, Qianhe Flavor is headquartered in Meishan, Sichuan. Its founder Wu Chaoqun graduated from South China Agricultural University in veterinary medicine. In 1996, Wu Chaoqun led his brother to start a business – Hengtai Industry, mainly engaged in the production of food additives.
However, Wu Chaoqun was not willing to be only the raw material supplier of the giants. He began to think about how to transform caramel color to the downstream soy sauce vinegar, and then there was Qianhe flavor industry. In 2016, Qianhe Flavor was listed on the Shanghai Stock Exchange, with the latest market value exceeding 23 billion yuan.
In addition, the delicious and spicy IPOs of Sichuan flavor are coming.
Last year, Sichuan Dandan Pixian Douban Group Co., Ltd. (hereinafter referred to as “Dandan Douban”) made an initial public offering of shares and listed for guidance and filing. This is a bean paste enterprise started from scratch by Yue Ping, the 78 year old founder of Sichuan. The annual sales of Pixian bean paste, hot pot seasoning, Pickled vegetables and other multi-functional compound seasonings, with an annual income of 1 billion yuan. If progress goes smoothly, Dandan Douban Sauce will become the “first stock of Pixian Douban Sauce”.
Prior to that, Yao Mazi, who is mainly responsible for rattan pepper oil, also submitted an IPO prospectus (application draft) to the GEM of Shenzhen Stock Exchange, officially taking the IPO step. The leader behind Yao Pozi is a post-60s couple from Hongya, Sichuan. In 1992, Zhao Yuejun and his wife, Gong Wanfen, opened a small shop on the roadside of their hometown to make food with the ancestral cooking technique of rattan pepper oil. As a result, rattan pepper oil was very popular.
So the couple simply started the rattan pepper oil business. With a small bottle of rattan pepper oil, the Sichuan company earned 300 million yuan a year, and also obtained strategic investments from NetJu Capital, CICC Capital, Jue Fund and the May 17 Fund,
Looking at the entire consumer IPO market, it is gradually warming up here. At the beginning of the year, Baiguoyuan, founded by Yu Huiyong and his wife from Jiangxi Province, officially launched the IPO of Hong Kong Stock Exchange, which is the first consumer IPO of Hong Kong stock this year. On the same day, Meili Tianyuan, known as “Hermes” in the medical and aesthetic industry, also successfully launched an IPO in Hong Kong stock market. Both stocks achieved a big opening rise, bringing a ray of excitement to investors in the whole primary market.
Since then, many well-known consumer brand enterprises, including Zhenjiu Lidu, Lancang Ancient Tea, KK Group, Didachu, Pule Shi Group, have also accelerated the listing process, and have submitted their prospectus or updated their re-delivery forms to the Hong Kong Stock Exchange, and the long-awaited excitement has returned.
Looking back at the end of 2022, many investors around us conveyed a similar view to us – compared with the bleakness of the past year, market confidence began to return this year, and the listing of consumer enterprises will also usher in a peak, especially the IPO of Hong Kong shares. Everyone is expecting this to happen.
Sichuan is going to have another IPO.