"We do not produce water, we are the porters of nature"
September 8
Nongfu Spring was officially listed on the Hong Kong Stock Exchange
On the first day of listing, Nongfu Spring opened at a high price of HK$39.8, an increase of 85.12% from the issue price of HK$21.5, with a total market value of HK$445.292 billion. The founder of the company, Zhong Suisui, holds 84.4% of the shares. In addition, he also holds 74.23% of the shares of the A-share listed company Wantai Biotechnology. At one time, his net worth surpassed Jack Ma and Ma Huateng, becoming the new richest man in China. However, as the stock price of Nongfu Spring fell after the market opened, Zhong Suisui, the richest man, only did it for half an hour. But the fact of being the richest man in half an hour has a lot of significance in itself.
Nongfu Spring has become the largest consumer stock in the Hong Kong stock market by market value
Nongfu Spring’s listing in Hong Kong has been strongly sought after by the market. It is very rare for new stocks in the Hong Kong stock market to rise so much. Although it opened high and moved low, it finally closed at HK$33.1 on September 8, which was still 53.95% higher than the issue price.
Nongfu Spring stock price chart
Based on the closing price, Nongfu Spring’s total market value is HK$370.3 billion, ranking 22nd in the Hong Kong stock market, slightly lower than China National Offshore Oil Corporation, and more than 100% Wei Asia Pacific has become the largest consumer stock in the Hong Kong stock market by market capitalization. It is ranked ahead of Nongfu Spring in finance, petroleum, and several well-known technology network companies (including Alibaba, Tencent, Meituan, JD.com, Xiaomi, and NetEase).
Nongfu Spring, which sells water, is indeed very profitable. According to the prospectus, the company’s gross profit margin for packaged drinking water in 2019 was as high as 60.2%. From 2017 to 2019, Nongfu Spring's revenue was 17.491 billion yuan, 20.475 billion yuan and 24.021 billion yuan respectively, with a compound annual growth rate of 17.2%; its net profits were 3.386 billion yuan, 3.612 billion yuan and 4.954 billion yuan respectively.
Nongfu Spring Co., Ltd. Hong Kong Stock IPO Prospectus
After the surge, Nongfu Spring’s valuation is not low. Calculated from the closing price on the first day of listing, the static price-to-earnings ratio is 66.97 times. This valuation is at Hong Kong stocks are quite high.
Such a high valuation reflects the market’s pursuit of consumer companies, and Nongfu Spring has maintained the largest market share in China’s packaged drinking water market for eight consecutive years, so the market has given it an overly high valuation.
Both A-shares and Hong Kong consumer stocks are popular
This situation is not only the case for Nongfu Spring, the leading catering company Haidilao has risen from 17.82 Hong Kong dollars when it was listed in September 2018. 51.45 Hong Kong dollars on September 8 this year, a 2-year increase of 188%. Haidilao's current static price-to-earnings ratio is as high as 104 times. Moreover, due to the impact of the epidemic in the first half of this year, the company suffered losses, but this did not affect the rise in stock prices. Zhang Yong, founder and chairman of the board of directors of Haidilao, and his wife Shu Ping have become Singaporeans. In mid-August, Forbes released the Singapore Rich List, and Zhang Yong and his wife firmly topped the list with a net worth of US$19 billion.
In the A-share market, calculated based on the closing price on September 8, the market value of Haitian Flavor Industry, which produces soy sauce, is 546 billion yuan, surpassing Sinopec and ranking 11th in the A-share market. Haitian Flavor Industry's current dynamic price-earnings ratio Up to 83.94 times. The liquor market has a larger market value. Kweichow Moutai ranks first in A-shares with a market value of 2.15 trillion yuan. Wuliangye surpasses PetroChina with a market value of 861.4 billion yuan and ranks ninth in A-shares.
Consumer stocks in Hong Kong and A-share markets have risen sharply, and their market values ??have surpassed traditional large-cap companies such as finance and oil. This actually reflects optimism about the potential of China’s consumer market. Of course, consumer stocks are currently overvalued, and some research institutions have issued research reports that these stocks are not suitable for buying. Haitian Flavor Industry has fallen sharply for three consecutive days since last Thursday. Nongfu Spring also opened higher and moved lower, and there is uncertainty about its future trend.
Grassroots entrepreneurs can also succeed
The stock prices of consumer stocks, especially food and beverage companies, have soared, creating a new group of rich people. Although Zhong Suisui of Nongfu Spring has only done half of his business, The richest man in his short time, but he is still among the top three richest men in China. Moreover, Nongfu Spring suddenly gave birth to dozens of billionaires.
This has provided opportunities for many grassroots GEMs. Interestingly, some entrepreneurs in consumer companies do not have high academic qualifications, such as Zhong Suisui, founder of Nongfu Spring.
1954
Zhong Suisui was born. He dropped out of school in the fifth grade. After the college entrance examination was reinstated, he failed in the college entrance examination for two consecutive years, and finally had to join Radio and TV University.
1984
1988
The establishment of the Hainan Special Economic Zone set off a wave of gold rush in Hainan, and Zhong Suisui resolutely went to Hainan.
In 1993
Zhong Suisui established the health care product company "Yangshengtang" and earned 10 million yuan a year from Guibietan.
In 1996
Invested and established Nongfu Spring Co., Ltd. in Hangzhou, creating well-known domestic beverage brands such as Nongfu Spring, Nongfu Orchard, and Scream.
In 2001
Zhong Suisui spent 17.1 million yuan to buy 95% of Wantai Biotechnology through Yangshengtang. Wantai Biotech's main business is in vitro diagnostic reagents and vaccines.
In 2020
Zhong Suisui began to enter the capital market. In April, Wantai Biotech brought Zhong Suisui more than 80 billion yuan in wealth. With the listing of Nongfu Spring, he became the top three richest people in China.
Zhang Yong, the founder of Haidilao, was also born from the grassroots. Zhang Yong was born in Jianyang County, Sichuan in 1971. Because his family had financial difficulties at the time, he could not support himself. Academically, and because my grades in junior high school were not outstanding, I studied electric welding in a technical school under the arrangement of my parents. After graduation, he became a welder, and his highest education level was only a technical secondary school.
In 1994, Zhang Yong found his three best friends at the time, pooled together 8,000 yuan, bought four hot pot tables, and prepared to run a hot pot restaurant. In this way, the first Haidilao opened. . When it went public in 2018, the number of Haidilao restaurants had reached 320. Based on 2017 revenue, Haidilao ranked first in the global Chinese catering industry.
There is also China Drinks Babi Food Co., Ltd., which has been approved by the Issuance Review Committee of the China Securities Regulatory Commission. Its founder, Liu Huiping, was a junior high school student from Anhui. In 1998, he set up his first business in Shanghai with 4,000 yuan. After the failure of the steamed bun shop, he persevered and opened a "Master Liu Big Bao" store on Nanjing Road, and established a foothold with a 7-cent steamed bun. Subsequently, "Baby Mantou" opened more and more stores and was about to become a listed company.
At present, a group of founders of famous technology Internet companies in China, such as Ma Huateng, Jack Ma, Lei Jun, Robin Li, etc., all graduated from universities, and many of them are top academics. Highly educated people can succeed in starting a business, but grassroots entrepreneurs without high education or background like Zhong Suisui, Zhang Yong, and Liu Huiping can also succeed with their own hands. This shows that the market is fair and they are in the market. The rich list can encourage more people to start businesses.
Golden Coast Studio
Author | Lian Jianming
Pictures | Network
Editor | Liang Qun