“Investor Network” Zhang Wei

On March 26, the “first cheese stock”, Mycorundum (600882.SH) released its 2023 annual report. According to the annual report, Mirco Land's revenue and net profit in 2023 decreased by 16% and 54%, respectively. For the first time since the backdoor listing in 2016, Mycorando experienced a “double drop” in revenue and net profit.

After several years of advertising, Mycorando has become the number one cheese stick brand in the eyes of the “Student Party”. Revenue and net profit “both fell”, and after deducting non-net profit, it's been declining for two consecutive years. Aren't the students eating a lot?

In addition to the difficulty of making money, the stock price of Mycorundum has also been weak for a long time. According to Dongcai Choice data, in January of this year, Mirco Land fell to 11 yuan/share, down nearly 90% from its peak in 2021 of 84.5 yuan/share. As of the close of trading on March 29, Mirco Land reported 13.36 yuan/share, and the company's market value was 6.864 billion yuan.

However, there is also good news for Mycorundum. At the beginning of March, Mengniu Dairy (02319.HK) increased its holdings of Miaokolanduo by 6.9 million shares, increasing its shareholding ratio to 36.51%. In July 2021, Mengniu Dairy became the controlling shareholder of Miaokolanduo, and has since increased its holdings in Miaokolanduo several times.

On March 26, Mirco Land told investors at the 2023 results briefing that the company and Mengniu are currently conducting discussions on the asset injection of Mongolian Milk Cheese and the integration of the cheese business between the two parties. With the help of Mengniu, it remains to be tested over time whether Mirco Land can improve its performance and stock price.

A brand created by “strong women”

Currently, there are many domestic milk brands. When I randomly interviewed a passerby, they were able to name milk brands such as Mengniu, Yili, and New Hope. But when it comes to cheese sticks, many people's first reaction is probably Mikolandot. After years of advertising, Mikolando became the number one cheese brand in China. Mikolanduo can quickly become number one in the industry. Apart from strong publicity, it also has a lot to do with founder Chai Yu.

According to public information, Chai Xiu was born in Changbaishan, Jilin. In 2001, Chai Xiu established Guangze Dairy. In 2006, Guangze Dairy became the No. 1 dairy in Jilin, accounting for more than 90% of the total production volume of local dairy companies. However, Guangze Dairy's products at this time are mainly liquid milk. Affected by factors such as sales radius and industry pattern, it is difficult for small brands of liquid milk to move from the regional market to the whole country.

In 2007, Chai Yu visited France and came into contact with cheese and decided to change Guangze Dairy's business model: adjust the company's products from liquid milk to cheese, adjust the target customer base, determine cheese consumers as students, launch cheese sticks suitable for children and young people, and promote it nationwide.

At the same time, Guangze Dairy's capital operation is also progressing. In 2016, Guangze Dairy went through the backbone of Hualian Mining to A-share listing, and Hualian Mining's stock abbreviation was changed to Guangze Shares. In 2019, Guangze Co., Ltd. changed the full name of the company to Shanghai Miaokelanduo Food Technology Co., Ltd., and then Guangze Co., Ltd. changed its name to Myokolanduo.

In 2020, Mikolando began promoting on platforms such as CCTV Comprehensive Channel, CCTV Children's Channel, and Audience Media. After several years of “bombardment” of advertisements, Mikolando soon became the number one domestic cheese stick brand.

Mengniu increased its holdings to become the majority shareholder and lost more than 2 billion dollars

According to some sources, as early as 2015, Mengniu Dairy wanted to hold or acquire Guangze Dairy, the predecessor of Mioco Lando. In the end, Mengniu's action was delayed for several years, and entering the market at a high price also caused huge losses.

According to the announcement, in January 2020, Mengniu invested 287 million yuan to acquire 5% of the shares in Miocolanduo, and as a strategic investor, increased the capital by 458 million yuan to invest in Jilin Guangze Dairy Technology Co., Ltd., a wholly-owned subsidiary of Miocolanduo. The two transactions cost a total of 745 million yuan for Mengniu Dairy.

In July 2021, Mengniu also acquired 23.8% of the shares in Miocolanduo with a fixed increase of 3 billion yuan and became the shareholder of Miocolanduo Holdings. Since then, Mengniu has increased its holdings several times, further increasing its shareholding ratio.

According to an enterprise survey, as of March 31, Mengniu's shareholding ratio in Myokolanduo reached 36.51%. Founder Chai Yu has a shareholding ratio of 14.81% and is the second largest shareholder. Chai Yu once said that although the position and actual control of the chairman were abandoned, this would allow the company to have a better platform for development and better returns for shareholders.

However, Mengniu's investment lost a lot.

According to the announcement, the price of Mengniu Dairy's first investment was 14 yuan/share. In July 2021, the price of Mengniu Dairy's 3 billion yuan fixed increase was 29.71 yuan/share. In October 2022, when Mengniu Dairy offered to acquire 25.809 million shares, the price was 30.92 yuan/share. Currently, the stock price of Miocolanduo is only around 13 yuan/share. After several acquisitions, Mengniu lost more than 2 billion yuan in total. In response, some investors joked that compared to small losses, Mengniu, which took over at a high price, seemed to be the thickest “leek.”

According to Dongcai Choice data, Mengniu's entry led to a rise in Miaokolanduo's stock price. In July 2021, it rose to 84.5 yuan/share at its highest, but since then it has been falling all the way down, and the company's market value has gradually shrunk. From its peak, it has exceeded 40 billion yuan and is currently less than 7 billion yuan.

Investment income accounts for the majority of parent's net profit

In addition to the stock price making investors hopeless, the cheese business, which is mainly operated by Miracoland, has not performed well in recent years.

According to the annual report, Mirco Land's revenue in 2023 was 4,049 billion yuan, a decrease of 16% from 2022 (4.83 billion yuan); net profit to mother was 63.44 million yuan, a decrease of 54% from 2022 (138 million yuan). Miocelanduo said that due to fluctuations in the raw material market and exchange rates, the cost of raw materials increased compared to the same period last year, leading to a contraction in performance.

It is worth noting that the non-net profit deducted by Miocelanduo in 2023 is only 7.17 million yuan, which is a difference of 56 million yuan from the net profit returned to mother. The reason for this is financial management. In 2023, Mirco Land's investment income was 52.5 million yuan, accounting for 83% of the net profit due to the current period. In 2022, that figure was just 43%. As of the end of 2023, Mycorando's transactional financial assets were 200 million yuan. Compared with 1,798 billion yuan at the end of 2022, investment in financial management has been greatly reduced.

However, the decline in profitability of the main business of Mycorando is also very obvious. From 2021 to 2023, the deducted non-net profit of Myocelanduo was 122 million yuan, 66.92 million yuan, and 7.17 million yuan, respectively.

There is a marked decline in the “deduction” of Mocalandot

In response, some investors said that if Miocelanduo doesn't work hard, they probably won't even be able to pay the founder's salary. According to the annual report, Maikolanduo founder Chai Yu's salary from 2021 to 2023 was 6.9012 million yuan, 5.583 million yuan, and 5.363 million yuan, respectively. According to corporate investigation information, as the second-largest shareholder, Chai Yu currently holds 76 million shares of Myokolanduo, with a market value of over 1 billion yuan.

How to improve performance in the future? Mikolanduo said that in 2024, it will focus on the main cheese business and reduce the revenue share of liquid milk, etc. Chai Yu has also publicly stated many times that making cheese consumption scenes more diverse and bringing cheese to the table of more Chinese people is the direction of Mikolanduo's firm intention and efforts.

At the same time, the majority shareholder Mengniu also came to “help.” Mengniu Dairy has issued an announcement stating that it will inject the Mongolian Milk Cheese business into Miracoland by July 9, 2024. In response to investors' questions at the 2023 performance briefing, Mirco Land said that the company and Mengniu are currently conducting discussions on the asset injection of Mongolian Milk Cheese and the integration of the cheese business between the two parties. (Produced by Thinking Finance) ■