The prince's milk is about to disappear from the market, but the Li Tuchun family is still active in the arena.
"Prince's milk before and after meals, supplement lactic acid bacteria every day." Many years ago, with this slogan, the Hunan dairy company's princely milk became popular all over the country.Today, however, consumers may no longer find it on supermarket shelves.
On July 9, the information on the Ali Assets platform showed that the auction of 40% equity of Hunan Prince Milk Group Biotechnology Co., Ltd. (hereinafter referred to as "Prince Milk") held by Xinhualian (000620.SZ) had passed the auction, and no bid was made during the auction process. , the starting price is 87.56755 million yuan.
The unsold auction of Prince's Milk's equity is actually not surprising.As early as a week before the auction, Sanyuan Shares (600429.SH), the actual controller of Prince Milk, issued an announcement, announcing that it would give up its right of first refusal and would not participate in this auction.At present, Sanyuan shares hold 60% of the shares of Prince Milk.
After more than 10 years of bankruptcy and reorganization, it is embarrassing that the once "childhood memories" have returned to the public eye in this way.In 1997, the prince's milk won CCTV's "Advertising Standard King" with 88.88 million yuan, but in 2008, the prince's milk began to fall from the altar.After the capital chain rupture, bankruptcy and reorganization, Prince Milk has been in a state of perennial losses.Even the equipment in the Prince’s Dairy Factory has been outdated, and there are only 88 employees left, and the products can only be entrusted to be processed outside.
Today, the equity of the prince's milk has been put on the shelf, but it has fallen into an embarrassing situation that no one cares about.
From CCTV's "Standard King" to bankruptcy and reorganization
In 1996, he started his business with 300 yuan. After trying to sell calendars and open a hotel, 36-year-old Hunan native Li Tuchun established the Prince's Milk Factory in Zhuzhou.In 1997, Prince Dai made a big bet on CCTV's "Advertising Benchmark King" at a sky-high price of 88.88 million yuan, thereby gaining fame in the national market.
According to Li Tuchun, since then, Prince Milk has become a well-known enterprise in Zhuzhou. The local bank took the initiative to contact the loan, and the dealers came one after another. If you want to order, you have to trust the relationship.Relying on the halo of CCTV's "Bid King", Li Tuchun became a well-known yogurt king, but in fact, he did not have much money when bidding, and even borrowed the 200,000 yuan admission fee.
According to public information, in 2005, Prince Milk won the top ten influential brands in China, and its fermented milk products ranked first in terms of production, sales and market share, and maintained a market share of more than 70% for many consecutive years.
The turning point came in 2007.This year, the sales of Prince's Milk soared from 50 million yuan to 3 billion yuan.In order to go public, Prince Milk received US$73 million from British Union, Morgan Stanley and Goldman Sachs.On the other hand, Li Tuchun also borrowed 500 million yuan of unsecured and unsecured low-interest loans from six consortiums led by Citibank in his personal name.He released a bold statement: "Prince's milk will be super bright in one year, and surpass Yili and Mengniu in three years."
However, with the external capital, there is also the gambling agreement signed by Li Tuchun and the other party - within three years after the investment, the performance growth of Prince Milk must exceed 50%, otherwise Li Tuchun will lose his 61.6% stake. .
In the end, things did not go as Li Tuchun wished.In 2008, when the global financial crisis broke out, Prince Milk encountered Citibank, Actis, Morgan Stanley and Goldman Sachs to collect debts.They even asked Li Tuchun to find a new strategic investor to take over, otherwise they would fulfill the gambling agreement in advance and take away his equity.
In March of the same year, the prince's milk forcibly started the listing work regardless of the company's financial situation.Unexpectedly, the melamine crisis caused by Sanlu milk powder brought the Chinese dairy brands to the bottom, and the listing plan of Prince Milk came to an abrupt end.
In order to raise funds, Prince Milk raised funds from dealers and employees in the form of high interest returns.According to the investigation by the procuratorial organ, as of December 2009, the amount of funds raised by Prince's Milk had reached more than 130 million yuan, most of which had not been paid.
In 2009, the capital chain of Prince Milk broke, the Zhuzhou government took custody of Prince Milk, and the company entered bankruptcy and reorganization procedures.In June 2010, Li Tuchun was arrested on suspicion of illegally absorbing public deposits.After 15 months, Li Tuchun was acquitted.
The gray line of the grass snake, the pulse is thousands of miles away.In fact, the blind expansion of the prince's milk and the fictitious and prosperous market have long laid hidden dangers for his own fall.
Since 2005, Prince Milk has expanded its industry from dairy products to real estate, children's clothing and tourism.At the same time, Li Tuchun created a "no-cost production, zero-risk operation" model, that is, twilight milk as the carrier, financing to the society to maintain operation and growth.The raw materials and equipment of Prince Milk, plant construction, and even the ingredients of the staff canteen are all obtained on credit.In addition, relying on the reputation of CCTV's "Biao Wang", Prince Milk launched the policy of "the more money you pay, the more goods you get, the higher the cash discount". A huge distribution network has been established, and a prosperous market has also been fabricated.
This model can allow Prince Milk to expand rapidly in the short term, but if there is a problem with product sales, it will affect the capital chain.In 2008, under the influence of the melamine incident and the financial crisis, the capital chain of Prince Milk broke down, and the dealers, banks and suppliers who were owed money also walked into a dead end.
A former prince milk distributor told Times Finance that he started to distribute prince milk in 2002, and the annual sales increased from 180,000 yuan to more than 5 million yuan around 2010.He originally wanted to expand the market with the help of Prince Milk, and raised more than 5 million yuan from customers and handed it over to Prince Milk. However, due to the bankruptcy and reorganization of Prince Milk, production and supply problems occurred, and he could not supply to customers. The client began to sue him for claims, and he could only use the house mortgage to make a loan to lose money.
In 2010, distributors from all over the world jointly sued Prince Milk."Although I finally won the lawsuit, I did not receive any compensation, and I still owe millions of yuan in loans from banks and others." The above-mentioned dealer told Times Finance.
Year after year of losses after changing owners, dragging down the performance of major shareholders
In November 2011, Sanyuan Co., Ltd., New Hualian and its subsidiary Runkun Technology signed a reorganization agreement with the reorganization manager of Prince Milk, and invested a total of 715 million yuan to obtain 100% equity of Zhuzhou No. 3 Company of Prince Milk and all the shares under its name. Assets, and provided 375 million yuan of debt repayment funds to Prince Milk Group, with Sanyuan and Xinhua Lian holding 60% and 40% of the shares respectively.
After the completion of the transaction, although the performance of Prince Milk has improved, it is still in a state of losses for consecutive years, even dragging down the performance of major shareholders.
According to the financial report of Sanyuan Co., Ltd., from 2012 to 2015, the revenue of Prince Milk was 85.437 million yuan, 163 million yuan, 180 million yuan, and 186 million yuan respectively, and the net profit was -12.3 million yuan, -92.67 million yuan, - 23.61 million yuan and 50,000 yuan.In 2017, Prince Milk's revenue plummeted to 78.79 million yuan, and in 2021 it fell to 18.52 million yuan, and the loss also increased from 1.6 million yuan to 61.4 million yuan.
Food industry analyst Zhu Danpeng told Times Finance that Prince Milk belongs to room temperature lactic acid bacteria drinks, and the growth prospects of this category are not good.In addition, enterprises do not have the funds and resources for marketing, and consumers do not understand the brand of Prince Milk, and its decline is inevitable.
In April 2022, Hunan Public Assets Appraisal Co., Ltd. issued an appraisal report. The report shows that the main assets of Prince Milk are four industrial lands located in Zhuzhou, covering an area of 199,700 square meters.At present, about 10,000 square meters of workshops in the production area are under lease, and the rest of the workshops are unused.
The report also discloses the current status of the Prince’s Milk Factory—most of the equipment was purchased around 2006, and cannot be used because of no effective maintenance during the bankruptcy and reorganization period. in a pending state.Due to problems such as aging equipment and serious leakage of production lines, since August 2020, the production area of Prince Milk has been suspended, and since September of that year, the entire line of products has been entrusted to be processed outside.In addition, Prince Milk currently has 88 employees, and there is no plan to resume production in the production area, and the existing production equipment will also be gradually disposed of.
On e-commerce platforms such as Taobao, there are still many merchants selling Prince's Milk lactic acid bacteria products, and the price of a whole box (100mL x 20 bottles) is about 30 yuan.However, Prince Milk Lactobacillus is not produced by Prince Milk Factory, but by Hubei Aolilong Food Co., Ltd.
Inheriting his father's business, Li Tuchun retreats behind the scenes
The prince's milk is about to disappear from the market, but the Li Tuchun family is still active in the arena.
On June 29 this year, Guilin Rhine Biotech (002166.SZ) announced that the company and Hunan Zicheng Biotechnology Co., Ltd. (hereinafter referred to as "Zicheng Biotechnology") signed the "Natural Sweetener Product Technology Development and Exclusive Supply Cooperation Agreement" ".The two parties will reach a long-term strategic partnership in the technology development, exclusive supply and exclusive procurement, brand promotion and licensing of natural sweetener products.
In a series of publicity manuscripts about the above cooperation, Zicheng Bio was also described as "the original team of Prince Milk Original, the pioneer of China's 100 billion lactic acid bacteria market".
According to public information, Zicheng Biology was jointly established by the shareholders of Prince Milk and the core team, and the chairman is Li Shuai, the son of Li Tuchun.According to Li Shuai, the company has exclusive agency rights in the mainland for the products signed by the company and Rhine Biotech for pure natural sugar substitutes.Relying on offline distributors, online red channel sales and key customer distribution, it is expected that the sales of its natural zero-sugar products will reach more than 1 billion this year, of which the demand for pure natural sugar substitutes will reach more than 200 million yuan.
Regarding the cooperation between Zicheng Bio and Rhine Bio, Times Finance called Rhine Bio, and the other party said that the company is currently only a supplier of Zicheng Bio, providing raw materials for production during the cooperation period. Happening.According to the announcement, within three years after the signing of this agreement, Zicheng Biological will purchase sweetener products with a total of no less than 100 million yuan from the company.
In addition to sugar substitute products, Li Shuai did not forget to inherit his father's business and start his own business in dairy products.According to its disclosure, Zicheng Bio has developed six series of products with double milk and double protein.At the same time, among the more than 7,000 distributors of the original Prince Milk across the country, 600 agents have signed the agreement of intent.
As his son walked to the front of the stage, Li Tuchun seemed to have retreated behind the scenes.
In the early years, Li Tuchun was still active on Weibo and other social platforms as the founder of Prince Milk and an independent economist, and expressed his desire to revive Prince Milk many times.But now, he has rarely talked about the prince's milk, and his last Weibo stayed in December 2020.He wrote on Weibo, "Encourage Li Tuchun to serve the country as an industrial entity, and beware of the air-glove and white wolf money-making model."
