Title: The influx of regional dairy companies intensifies Junlebao’s layout in the Southwest market
Author: Luan Li
Involution among regional dairy companies is increasing.
On January 24, dairy enterprises in South ChinaRoyal Group(002329.SZ) announced that it has introduced Hebei regional dairy company Junlebao Dairy as a strategic investor, and the latter will acquire a 20% stake in a subsidiary of the Royal Group.
On January 21 and 24, the share price of Huangshi Group rose by the daily limit for two consecutive trading days. As of press time, the share price of Huangshi Group closed at 5.87 yuan.
In the past year, mergers and acquisitions among regional dairy companies have been increasing, and strong regional dairy companies have been striving for strategic initiative through cross-regional expansion.
The announcement shows that on January 22, Huangshi Group and Junlebao Dairy signed the “Equity Transfer Agreement”, which will transfer the 20% equity of Yunnan Huangshilaisier Dairy Co., Ltd., a holding subsidiary, and Yunnan Huangshilaisi. A 20% stake in Erzhi Dairy Co., Ltd. was transferred to Junlebao Dairy at a price of 200 million yuan.
According to public information, Huangshi Group is a dairy enterprise in South China and the largest buffalo milk processing enterprise in China. The market covers Guangxi, Yunnan, Hunan, Guizhou and other places. , Sales of a complete industrial chain.
According to the 2021 semi-annual report, the revenue from the dairy products and food business of Huangshi Group accounts for about 74.5% of the revenue. Among them, the revenue of low-temperature milk business is 470 million yuan, accounting for about 36.3%, and the revenue of normal temperature milk is 470 million yuan, accounting for about 36.2%. In the first three quarters of 2021, the Royal Group achieved a revenue of 1.93 billion yuan, a year-on-year increase of 13.1%, and a net profit of 18 million yuan, a year-on-year decrease of 45.6%.
From the perspective of the industry, Junlebao’s core market is in the northern region, and this move is more focused on the layout of the Royal Group in the southwest market.
The financial report shows that the Emperor Group has multiple production plants in Southwest China, South China and Central China, of which the two plants in South China and Yunnan have an annual production capacity of 200,000 tons, 144,000 tons and 200,000 tons respectively (another annual production capacity is under construction. 200,000 tons); and has 2,361 dealers in the southwest region.
Song Liang, an independent dairy analyst, told the First Financial Reporter that Junlebao’s shareholding on the one hand has an obvious intention to expand the southwest market through the use of the Royal Family. The market has not been able to open up the situation; on the other hand, Junlebao can also obtain local specialty strains and buffalo milk and other specialty products through its shareholding to further strengthen its yogurt business.
It is worth noting that the Southwest region is alsoNew DairyThe base market of (002946.SZ), in the Dali area of Yunnan where Huangshi Lesier is located, is also the base market of Diequan Dairy under the New Dairy Industry. Hebei Tianxiang Factory launched an attack on Junlebao’s hinterland market.
In the past two years, the process of cross-regional operation of regional dairy enterprises has been accelerating. New Dairy successively acquired 55% equity of Fuzhou Auscow and 100% equity of Huanmei Dairy, the parent company of Xiajin Dairy, and laid out the market in the southeast and northwest;Bright Dairy(600597.SH) also spent 610 million yuan to acquire a 60% stake in Qinghai Xiaoxiniu Biological Dairy Co., Ltd. to improve milk sources, production capacity and market layout in the west; Guangdong’s Yuexiu Group spent 3 billion to acquire Liaoning Huishan Dairy has a layout in the Northeast market.
In Song Liang’s view, the current regional dairy companies are competing for cross-regional distribution. On the one hand, they are competing for the increasingly scarce high-quality pasture resources in China, which is also the basis for the next stage of development; When the bottleneck is reached, the market has shifted to stock competition. In the past two years, regional dairy companies have been strongly eroded by nationalized dairy companies Yili and Mengniu in the low-temperature product business. They are facing growth problems, and the top regional dairy companies have to accelerate the preemption of the region. foreign markets, and strive for market initiative.
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Responsible editor: Zhang Yanan