On the evening of December 15, Hongqi Chain announced that the company’s change of control is still in the further discussion stage, and the company’s shares will continue to be suspended from the opening of the market on December 18. The trading suspension is expected to last three trading days. Previously, on December 13, Hongqi Chain issued an announcement stating that the actual controller of the company was planning a transfer of control. The transfer of control rights of
Hongqi Chain has triggered heated discussions in the market. As the second largest shareholder of Hongqi Chain, Yonghui Supermarket holds 21% of the company's shares, and many people have included him and Cao Zengjun as candidates to take over control.
At present, the actual controller of Hongqi Chain is Cao Shiru. As the company's chairman and general manager, he holds 24.08% of the company's shares, and his concerted action is Cao Zengjun, who currently serves as the vice chairman and board secretary of Hongqi Chain and holds 3.55% of the company's shares. % of the shares, the relationship between the two is mother and son.
On December 15, regarding where the actual control rights of Hongqi Chain will be transferred, a person from the securities department of Hongqi Chain told the Beijing News Shell Finance reporter, "It is not clear yet and we have not received relevant notification from the company." And Yonghui Supermarket A person from the securities department said, "The company has received this news, and the management is currently negotiating. It is not yet clear where the transfer will be."
Why is "Retail Queen" Cao Shiru planning to transfer control?
The official website of Hongqi Chain shows that the company was founded in June 2000 with a registered capital of 1.36 billion yuan. It has opened more than 3,600 chain supermarkets in Sichuan Province, with more than 400 million people visiting the stores annually.
As the leading convenience supermarket chain in southwest China, Hongqi Chain is centered in Chengdu and adheres to the differentiated competition strategy of "goods + services". While selling food, daily necessities and other commodities, it also provides bus card recharge, telecommunications Payment and other convenient services. In September 2012, Hongqi Chain was listed on the Small and Medium-sized Board Market of the Shenzhen Stock Exchange, becoming the “No. 1 A-share convenience supermarket”. After
was launched, Hongqi Chain started a series of expansion actions. Since 2015, Hongqi Chain has acquired Hongyan Supermarket, Huhui Supermarket, Leshan Sihai and 9010 Supermarket.
In addition, Hongqi Chain has also expanded its business territory to outside the province. In September 2020, the first batch of 15 "Hongqi Convenience" chain supermarkets opened in Lanzhou, Gansu Province, and the Hongqi chain officially realized its "exit Sichuan and enter Long". Its 2023 semi-annual report shows that as of June 30, 2023, 97 Hongqi convenience stores have been opened in Gansu.
has been impacted by e-commerce, and Hongqi Chain is also exploring new sales models. In June this year, Hongqi Chain also officially launched a Douyin live broadcast room, and Chairman Cao Shiru personally participated in the live broadcast. According to data from Cicada Mama, the total sales of Hongqi Chain’s three live broadcasts in June were between 45 million yuan and 100 million yuan, and its ability to attract money cannot be underestimated. The reasons behind the actual transfer of control of
have received widespread attention from the market. Looking at the growth cycle of
, its revenue growth has been in single digits for more than two years (from 2021 to the first three quarters of 2023), of which revenue in the first three quarters of this year only increased by 0.89%; in the three years from 2020 to 2022 Among them, the growth rate of its net profit attributable to its parent company either declined slightly or increased slightly.
’s third quarter report for 2023 shows that the company’s total revenue and net profit attributable to the parent company have both increased year-on-year. In the first three quarters, the cumulative operating revenue of Hongqi Chain was 7.641 billion yuan, a year-on-year increase of 0.89%, and the net profit attributable to the parent company was 407 million yuan, a year-on-year increase of 13.99%.
Wen Zhihong, general manager of Hehong Consulting and chain operation expert of Hejun Consulting, pointed out to the Beijing News Shell Finance reporter that currently traditional supermarkets are facing greater pressure and challenges, but Hongqi Chain can maintain a relatively good operating status. Instead of focusing on It is related to the business strategy in Sichuan, which has helped Hongqi Chain gain a larger share and influence in the local market. At the same time, Hongqi Chain focuses on community supermarkets and convenience stores, and is less affected by e-commerce.
Wen Zhihong believes that in this context, there may be three reasons for Hongqi Chain to plan the transfer of control rights: First, although Hongqi Chain is currently in a relatively healthy development state, in the long term, Hongqi Chain will still face various challenges. Making arrangements in advance can help prepare for a rainy day. Secondly, Hongqi Chain is currently a regional retail enterprise, but from the perspective of future development, it does not rule out the introduction of stronger external forces to promote the company's development by transferring control rights.Finally, although the company's chairman Cao Shiru may not retire in the short term, he still needs to consider retirement in the future.
Who will take over?
Is Yonghui Supermarket, the second shareholder, capable of taking over?
Some people speculate that the control of Hongqi Chain may be transferred to Cao Shiru’s son Cao Zengjun.
According to the financial report of Hongqi Chain, 44-year-old Cao Zengjun has served as the executive director and supervisor of Hongqi Chain since April 2005. After the company was transformed into a joint-stock company, he has served as the company's vice chairman, executive deputy general manager and board secretary until now.
The speculation that Cao Zengjun will take over is not without basis. As early as 2010, Cao Shiru said in an interview with the media, "I have spent a lot of effort training and training (Cao Zengjun) in the past five years, just hoping that one day he can take over my career and become a qualified successor."
In 2019, Cao Shiru In an interview with the "Securities Times", he once again talked about his expectations for future successors: "The person who will succeed Hongqi in the future must have a broad mind, have an overall view, and care for your employees. Since it is a listed company, you should not Treat it as a family business." Cao Shiru said that the successor of Hongqi Chain should be market-oriented. "Whoever is suitable for this position and who can lead this company further and better is the best candidate."
holds Yonghui Supermarket, the second shareholder with a 21% stake in Hongqi Chain, is also regarded by the market as a possible takeover. According to
data, the equity transactions between Yonghui Supermarket and Hongqi Chain can be traced back to 2017. On December 24 of that year, Hongqi Chain issued an announcement stating that Cao Shiru and Cao Zengjun would transfer a total of 163.2 million shares of Hongqi Chain to Yonghui Supermarket, and the transferred shares accounted for 12% of the total share capital of Hongqi Chain. Just nine days after the first share transfer of
, Hongqi Chain once again announced that Cao Shiru and Cao Zengjun had transferred 122.4 million shares of Hongqi Chain to Yonghui Supermarket. This transfer of shares accounted for 9% of the total share capital of Hongqi Chain. Since then, Yonghui Supermarket has held a total of 21% of the shares of Hongqi Chain, becoming the second largest shareholder. The two transfers also allowed Cao Shiru and Cao Zengjun to jointly cash out 1.656 billion yuan.
Regarding the purpose of the second transaction, Yonghui Supermarket stated in the "Detailed Equity Change Report" that it was optimistic about the development prospects of Hongqi Chain's business, recognized the long-term investment value of Hongqi Chain, and planned to increase its holdings of some shares of Hongqi Chain through agreement transfer. , to obtain good returns.
In addition, Hongqi Chain also signed a "Strategic Cooperation Framework Agreement" with Yonghui Supermarket. The two parties plan to carry out in-depth cooperation in system construction, supply chain management, new business development, logistics system and other aspects. In its response to the Shenzhen Stock Exchange's "Inquiry Letter", Hongqi Chain stated that the two parties will jointly build a community fresh food industry chain and expand new consumption interaction models. Public information shows that in December 2018, the number of fresh food convenience stores built by the two companies exceeded 100.
Regarding the transfer of control of the Hongqi chain, relevant sources from Yonghui Supermarket said that the management is negotiating. Therefore, it is currently undecided which party is the transferee.
However, Yonghui Supermarket’s own situation is not optimistic. In the first three quarters of 2023, Yonghui Supermarket achieved operating income of 62.088 billion yuan, a year-on-year decrease of 12.44%; looking at the extended period, Yonghui's total operating income in 2021 and 2022 was 91.062 billion yuan and 90.090 billion yuan, respectively. Year-on-year decreases of 2.29% and 1.07%. From the perspective of non-net profit deduction, the company's non-net profit deduction has been negative from 2021 to 2022, and it is still negative in the first three quarters of this year. Looking at the asset-liability ratio, the asset-liability ratio disclosed in its third quarter report was 86.54%. At the same time, Yonghui itself is also closing stores. According to reports, the number of Yonghui Supermarket stores reached its peak in 2019, at 1,440. According to the latest data from the official website, the number of Yonghui Supermarket stores has fallen below 1,000, with only 998 stores left. In other words, 442 stores have been closed in the past four years.
On the same day that Hongqi Chain issued the suspension announcement, Yonghui Supermarket issued an asset sale announcement, selling its 388 million shares of Dalian Wanda Commercial Management Group Co., Ltd. to Dalian Yujin Trading Co., Ltd. for a transfer price of 4.53 billion yuan. Yonghui Supermarket stated that the purpose of this asset transaction is to revitalize the company's assets and is in line with the company's strategy of reducing the scale of investment.
On the evening of December 15, Hongqi Chain announced that since the company’s change of control is still in the further discussion stage, the company’s shares will continue to be suspended from the opening of the market on December 18. The trading suspension is expected to last three trading days.
Who will control the Hongqi chain? At present, it seems that it will take some time for the mystery to be revealed.
Beijing News Shell Finance Trainee Reporter Wei Boya Reporter Wang Jinyu
Editor Yue Caizhou
Proofreader Wu Xingfa
