"Investor Network" Xu Hui

Editor Hu Shan

With the increasing consumption of domestic halogen products, according to the 2021 China Halogen Industry Research report, the market size of China's halogen products in 2021 is about 329.5 billion yuan, an increase of 15.0% over the same period last year. It is expected that the scale of China's halogen industry will reach 405.1 billion yuan in 2023. With the continuous expansion of the market scale, the enterprises in the industry also began to compete for supremacy, and the smoke was filled with gunpowder for a while.

On the official website of the CSRC, Shandong Braised Chicken, Dezhou Style Co., Ltd. (hereinafter referred to as "Braised Chicken, Dezhou Style") disclosed that the prospectus plans to be listed on the main board of the Shanghai Stock Exchange. More than a month later, the company is still in line.

Different from other lo mei brands, Braised Chicken, Dezhou Style has been famous since he was awarded the title of "Chinese time-honored Brand" when Kangxi toured the south. Compared with its counterparts'lo mei brands Zhou's Black Duck (01458.HK), tasteless Food (603517.SH) and 002695.SZ, the company has added value that is better than other historical brands that are difficult to replicate.

But at the same time, because "Dezhou" belongs to the place name sign, and "grilled chicken" is one of the representative dishes in Shandong Province, the brand name "Braised Chicken, Dezhou Style" has also made the company suffer from a number of disputes over trademark infringement, and has been jointly complained by consumers on the black cat complaint website. How to let consumers buy "authentic" Braised Chicken, Dezhou Style has become one of the problems that the company urgently needs to solve. In addition, Braised Chicken, Dezhou Style also has a situation where revenue is concentrated in East China and North China, the number of stores is lower than that of peer listed companies, and the asset-liability ratio is higher than that of peer enterprises.

This time, Braised Chicken, Dezhou Style plans to raise about 758 million yuan and plans to invest in new food processing projects, frozen grilled chicken production line construction projects, marketing network and brand upgrading projects. The company said in its prospectus that "in the future, it will occupy the East and South China markets as soon as possible, so that Braised Chicken, Dezhou Style will change from a local brand to a national brand." Considering from the standpoint of the diversity of consumer choices, if Braised Chicken, Dezhou Style can successfully raise funds this time, the new era of "quadruped" in its lo mei market is really something to look forward to.

East China accounts for more than 80% of sales.

According to public data, during the Shunzhi period, Kangxi toured the south of Kangxi and praised Braised Chicken, Dezhou Style's "wonder of China", which has a history of more than 300 years. In modern times, Braised Chicken, Dezhou Style was founded in 1953 after inheriting the skill of making grilled chicken.

The company is mainly engaged in braised chicken products, other meat cooked food supplemented by halogen food research and development, production and sales, its stores reached 553, mainly by joining.

Dezhou stock products

From 2019 to 2021 (hereinafter referred to as "the reporting period"), Braised Chicken, Dezhou Style realized operating income of 687 million yuan, 682 million yuan and 720 million yuan respectively, and realized net profit of 122 million yuan, 9500 yuan and 119 million yuan respectively.

If the products are classified by revenue, Braised Chicken, Dezhou Style's revenue mainly comes from grilled chicken, meat non-staple food and supermarket products. During the reporting period, the company's income from grilled chicken products accounted for 67.22%, 64.66% and 66.80% of the company's main income respectively; meat and non-staple food products accounted for 10.16%, 11.41% and 11.41%, respectively; supermarket business accounted for 19.90%, 21.63% and 17.57% respectively, it can be seen that grilled chicken income is the company's main source of income.

The main composition of Texas shares

From the perspective of regional income distribution, in 2021, the company's operating income mainly comes from East China and North China, accounting for 80.69% and 9.19%, respectively. In this regard, Braised Chicken, Dezhou Style said that grilled chicken, as a place name product in Dezhou City, Shandong Province, has a high popularity in Shandong Province and its surrounding areas, and the company has a strong market advantage in the above-mentioned areas.

On the question of how to rush out of eastern China and improve the coverage of the domestic market of the company's products in the future, Braised Chicken, Dezhou Style said in the prospectus that the company plans to raise funds to build a new production base in Suzhou, which will radiate the whole Jiangsu-Zhejiang-Shanghai area; at the same time, to carry out research and development of new products according to the taste differences of people in different regions and optimize the product structure. The construction of marketing centers in Beijing, Shanghai, Qingdao and Hangzhou will strengthen the company's marketing ability in non-local areas, further expand the sales network, and improve the domestic market coverage of the company's products.

With the increasing popularity of Braised Chicken, Dezhou Style, superimposed on the gradual rise of other local grilled chicken enterprises in Texas, especially on the e-commerce network, searching for keywords such as "Braised Chicken, Dezhou Style", there are many kinds of related competitive products. if brand awareness confusion brings food safety and other problems to consumers, Braised Chicken, Dezhou Style is better than other brands difficult to copy the added value of historical brands, but also extremely vulnerable to rental dissipation.

When the author enters the e-commerce platform to search for "Braised Chicken, Dezhou Style", he can see not only the company's products, but also the products produced by different manufacturers, such as Xiangsheng braised chicken, Deshengzhai braised chicken, Dezhou authentic five-spice grilled chicken, and so on.

Taobao search keyword "Braised Chicken, Dezhou Style"

At the same time, investigations showed that in the past few years, disputes related to Braised Chicken, Dezhou Style were also mostly due to the fact that the company's "Braised Chicken, Dezhou Style" had the place name mark "Texas" in its trademark certification. Many companies sued by the company thought that "Braised Chicken, Dezhou Style" was a common name, and Braised Chicken, Dezhou Style had no right to prohibit other companies from using Texas place names properly.

Disputes over trademark rights of enterprises

In the black cat complaints, there are also consumer complaints about "Braised Chicken, Dezhou Style" food, including food deterioration, foreign bodies and other issues. "Investor Network" looked up the pictures of the complained products and found that most of the complained products were not produced by Braised Chicken, Dezhou Style.

Black cat complains against "Braised Chicken, Dezhou Style"

In this regard, Braised Chicken, Dezhou Style also admitted that the company has the risk of brand and trademark infringement, and if other enterprises counterfeit company brands and sell shoddy goods, it may adversely affect the company's brand image.

The market of lo mei has stepped into the acceleration period of shift.

From the point of view of the number of stores and revenue, the current halogen industry in China has mainly formed a relatively stable situation of "three Kingdoms fighting for hegemony" represented by Zhou's Black Duck, tasteless food and Huangshanghuang, but with the increasing consumption scene of halogen products, many peer enterprises have also begun to seize the market by constantly expanding the number of stores, and the competition pattern of lo mei market has gradually evolved into a situation of "heroes competing for hegemony", in the prospectus. Braised Chicken, Dezhou Style listed the above three companies as their main competitors.

Judging from the course of Braised Chicken, Dezhou Style's development, the company seems to have capital "strength" if it wants to break the "tripod" situation. In 2012, Braised Chicken, Dezhou Style received Tiantu investment and Qifu capital investment of nearly 100 million yuan from many star projects such as Zhou's Black Duck, hundred Orchard and Little Red Book. In 2016, Mochi Mountain Venture Capital injected round B financing funds for Braised Chicken, Dezhou Style. Before the listing, Braised Chicken, Dezhou Style also obtained from Guoshou Investment, Mochi Mountain Venture Capital, Lu Min Investment, pilot Investment and other stars of the institutional premium equity transfer participation.

Ownership structure chart

It is worth mentioning that Braised Chicken, Dezhou Style is also a typical "family business". Cui Guihai and Cui Chen, son of Chen Xiaojing, have a family of three, plus Cui Guihai and Cui Chen hold 5.56% of the shares indirectly through braised Chicken Food City. the three together control 60.06% of the voting shares of the company.

By the end of 2021, Braised Chicken, Dezhou Style's 553 stores were indeed lower than those of their peers-13714 delicious food stores, 4281 Huangshanghuang specialty stores and 1755 Zhou's Black Duck stores.

An overview of the stores of Braised Chicken, Dezhou Style and his competitors

Braised Chicken, Dezhou Style said that this is because the company mainly focuses on low-temperature fresh products and has high requirements for product preservation and logistics and distribution, which leads to obvious regional sales of products. In the future, the company will expand production scale and strengthen logistics and distribution capabilities, as well as invest in research and development to launch new product lines, and strengthen the promotion of new brands to cover more people and consumption scenes, and further distribute the national market.

In addition, in terms of long-term debt repayment indicators, the average asset-liability ratio of comparable companies during the reporting period was 19.89%, 24.92% and 26.89%, while Braised Chicken, Dezhou Style's asset-liability ratio was 38.74%, 52.13% and 56.44%, respectively, higher than the average of comparable companies.

Comparison of asset-liability ratio

In this regard, Braised Chicken, Dezhou Style explained that as an unlisted company, the financing channel is limited to bank loan financing, resulting in a higher asset-liability ratio than in the same industry.

In addition, from 2019 to the end of 2021, Braised Chicken, Dezhou Style's comprehensive gross profit margin was 43.66%, 44.33% and 42.70% respectively, and the average value of comparable companies in the same industry was 42.69%, 42.25% and 40.82% respectively. Braised Chicken, Dezhou Style's comprehensive gross profit margin remained basically stable and slightly higher than that of comparable companies in the same industry.

In the industry, with the improvement of national food safety standards and the enhancement of consumer brand awareness, China's market share of lo mei is gradually concentrated to enterprises with a certain production scale and brand advantages. Coupled with the impact of the epidemic, small and micro enterprises with insufficient strength have been eliminated by the market, and the halogen food industry has also ushered in an accelerated reshuffle, bringing opportunities for the further expansion of the head enterprises.

So, under the brand barriers that are difficult for other enterprises to copy, can Braised Chicken, Dezhou Style successfully raise funds for listing with the support of measures mentioned in the "guidance on promoting the Reform, Innovation and Development of time-honored Brands" jointly issued by 16 departments such as the Ministry of Commerce, "supporting the online and offline integration and development of time-honored brands", "supporting the online and offline integration development of time-honored brands", "promoting the active docking of time-honored brands to the capital market" and other measures It remains to be seen to get a piece of the pie in the "three Kingdoms struggle for hegemony" and to break through regional restrictions and usher in a good opportunity for development. (produced by thinking Finance) ■