On the evening of December 20, the official website of the Hong Kong Stock Exchange showed that Shenzhen Pagoda Industrial (Group) Co., Ltd. passed the listing hearing on the main board of the Hong Kong Stock Exchange, with Morgan Stanley as the sole sponsor.
According to public information, the first “Baoguoyuan” store opened in Shenzhen in 2002. As of the latest data disclosure, after 20 years of development, the company currently has more than 5,645 offline stores, covering 22 provinces and cities and more than 140 cities across the country. , mainly concentrated in residential areas, commercial streets and other areas with high traffic flow.
The prospectus data also disclosed that Pagoda’s operating income from 2019 to 2021 will be 8.976 billion yuan, 8.854 billion yuan and 10.289 billion yuan respectively, and will continue to increase by 7% year-on-year to 5.915 billion yuan in the first half of 2022; from 2019 to 2021 Realized net profits of 248 million yuan, 46 million yuan, and 221 million yuan respectively. The adjusted net profit in the first half of 2022 was 205 million yuan, a year-on-year increase of 34%. The adjusted net profit margin increased from 2.8% in the first half of 2021. increase to 3.5% in the first half of 2022. Behind the steady development of financial data is the operating “moat” built by creating an integrated business model driven by dual brands.
Large-scale agricultural strategic layout to build core competitiveness
The distribution process at the midstream distribution end of the fruit retail industry is cumbersome, with low circulation speed and high loss rate; the downstream retail end is highly fragmented, and the industry competition is fierce. In order to build its own advantages in the fierce market competition, Pagoda has created a dual-brand driving strategy to empower its operations by establishing channel brands and category brands.
In terms of channel brands, Pagoda has the largest fruit retail network in China that is close to the community, integrates online and offline, and stores and warehouses. Through continuous optimization of the franchise system, it has explored the “A+B” franchise model. And the introduction of the regional agency system has achieved high-quality and rapid expansion of franchise stores under the standardized system, and has attached importance to the expansion of sinking markets. In terms of warehousing and distribution, the company implements professional and standardized quality management of the entire industry chain, provides consumers with flexible distribution service support such as timely delivery and next-day delivery, and achieves industry-leading high turnover and low loss.
In terms of product categories and brands, Pagoda has huge differences in fruits. The industry’s original fruit “four degrees, one flavor and one safety” grading standard for all categories of fruits classifies fruits according to “sugar acidity, freshness, crispness, tenderness, fragrance, and safety”. Divided into signboards, grade A, grade B, grade C, so that consumers can clearly buy delicious fruits, and then use the fruit quality grading standards to guide upstream planting bases and high-quality suppliers to provide a stable supply of high-quality fruits.
Pagoda will also officially launch the “Three Zeros” vegetable brand in 2021. “Three zeros” refer to “zero” chemical fertilizers, “zero” chemical pesticides, and “zero” chemical hormones in the process of planting and production. Based on the BLOF ecologically harmonious planting technology introduced from Japan, vegetables show “vegetable flavor” “Significant features. In addition, Pagoda has also invested in fields including seed companies, agricultural materials companies, and agricultural drones to further expand upstream in the supply chain for the strategic layout of large agriculture.
Digital drive integrated new retail formats
Pagoda started to explore the new retail field very early. After years of innovation and development, it has realized the operation and management of the entire industrial chain from fruit planting to retail, transforming from a single fruit retailer to a collection of fresh fruit procurement, A large-scale chain enterprise integrating planting technical support, post-harvest preservation, logistics and warehousing, standard grading, marketing expansion, brand operation, store retail, information technology, financial capital, scientific research and education.
In August this year, Jiao Yue, executive vice president of Pagoda Group, mentioned at the “Fifth China Smart Retail Conference” that Pagoda has accelerated the implementation of digital upgrades for 19 systems in the front, middle and back offices since 2019, so as to realize smart ordering , smart pricing, smart product recommendation, and finally realize the upgrade of precision marketing, so that users can have a better purchasing experience.
As of now, the total number of Pagoda members in all distribution channels exceeds 73 million, and the number of paying members exceeds 946,000. At the same time, the strategy of “integration of online and offline” is actively promoted. While building stores close to the community, online shopping options are provided through mobile apps, WeChat applets, e-commerce and social commerce platforms. The total number of orders of Pagoda in 2021 More than 290 million orders, of which orders from various online channels accounted for about 23%.
Driven by digital upgrades based on information technology, Pagoda has realized “integration of online and offline, store and warehouse integration, integration of timely delivery and next-day delivery, integration of store sales and pre-sale at the origin, and integration of category management and customer management.” “Omni-channel, all-field construction. According to statistics from Frost & Sullivan, the overall repurchase rate of Pagoda members in 2021 is 49%, ranking first among fruit specialty retail operators.
Build big agriculture and practice social responsibility
While realizing the company’s own high-quality development and sustainable profitability, it also does not forget to fulfill its social responsibilities, especially in terms of helping rural revitalization. As the number one enterprise in domestic fruit chain retailing, Pagoda has a strong role in helping rural revitalization. Inherent advantages, Yu Huiyong, the founder and chairman of Pagoda Group, once publicly stated: “The root of rural revitalization is industrial revitalization, and industrial revitalization is first and foremost driven by sales.”
Take Pagoda’s assistance to Kashgar, Xinjiang in 2022 as an example. From January 1 to December 19, 2022, Pagoda purchased more than 60 million yuan of fruit from the Kashgar region of Xinjiang. 100 million yuan. In July 2022, Pagoda signed a strategic cooperation agreement with the Ningxia Department of Agriculture and Rural Affairs to further promote the local implementation of BLOF technology and turn the “three zeros” brand vegetables into Ningxia’s high-quality agricultural product business cards, which will be delivered to consumers across the country through Pagoda.
In August 2022, the Hunan Provincial Government and the Ministry of Agriculture and Forestry of Laos signed a memorandum of cooperation on “One Road, Two Gardens”. Hunan Province will import 1 million tons of agricultural products from Laos every year. On December 5th, the first Lao banana special train on the China-Laos Railway departed from the South Railway Station of Vientiane, the capital of Laos, to China. Among the 25 containers fully loaded with bananas directly harvested from Laos, 10 containers were purchased by Pagoda Group, amounting to 200 tons.
In this regard, Pagoda publicly stated that under the “Belt and Road” initiative, it will continue to carry out in-depth cooperation with Laos and other Southeast Asian countries to develop more local specialty agricultural product production and sales chains, so that more high-quality fruits that meet China’s food safety standards Walk into thousands of households.