On June 30, Zhejiang Furun (600070) disclosed that the company planned to transfer 46% of its holding subsidiaries Zhejiang Furun Printing and Dyeing Co., Ltd. and 51% of Zhejiang Furun Textile Co., Ltd. through public listing. , the total minimum price for first public listing and transfer is not less than 360 million yuan.
Zhejiang Furun said that the divestiture of traditional assets through public listing and transfer will help optimize the company’s industrial structure, improve the company’s profitability, and is in line with the company’s strategic plan. Currently, Zhejiang Furun’s information service industry, which focuses on digital marketing, has accounted for 53.70% of its revenue, and it has ushered in an explosive dividend period in digital marketing fields such as short videos and live broadcasts. With the divestment of traditional businesses and focus on the main business, Zhejiang Furun has Furun has full momentum for future performance growth.
It is understood that the traditional assets divested by Zhejiang Furun this time are Zhejiang Furun Printing and Dyeing Co., Ltd. (Zhejiang Furun Printing and Dyeing Co., Ltd.) held by the company Including 46% equity of its consolidated subsidiaries Zhejiang Minghe Steel Pipe Co., Ltd., etc.) and 51% equity of Zhejiang Furun Textile Co., Ltd., the corresponding shareholder equity appraisal value of 359.6266 million yuan will be used as the transfer base price for the initial public listing.
The announcement revealed that due to factors such as escalating trade frictions, rising labor costs, and increasing pressure on environmental protection, Zhejiang Furun’s traditional textile printing and dyeing and seamless steel pipe processing businesses have become increasingly smaller. According to Zhejiang Furun’s 2019 annual report, the company’s steel pipe sales and processing gross profit margin was 13.51%, a year-on-year decrease of 3.15%. The gross profit margin of textile sales and processing was 20.62%, a year-on-year decrease of 0.11%.
Previously, in accordance with the strategic plan of “gradually stripping off inefficient assets and gradually forming a clear main business”, Zhejiang Furun’s asset structure has been continuously optimized in order to concentrate resources on developing core businesses. According to its 2019 annual report, during the reporting period, Zhejiang Furun has transferred the equity of some of its traditional industry subsidiaries, including the equity of Haimao Company, clothing company, and People’s Drugstore. This time, the sale of other equity holdings in traditional industry subsidiaries will further optimize the company’s asset structure and make the main line of the industry clearer.
It is understood that Zhejiang Furun was originally engaged in textile printing and dyeing, and seamless steel pipe processing. In order to break through the constraints of the original industry, Zhejiang Furun started a transformation and upgrading process of “grasping both traditional industries and emerging industries”. road. In 2016, Zhejiang Furun acquired 100% equity of Taiyi Zhishang, a technology company that relies on big data technology to provide customers with Internet marketing services and marketing data analysis services. Through this acquisition, Zhejiang Furun has formed an industrial structure of “traditional industries + big data + Internet”. Combing through the annual report data of Zhejiang Furun, the proportion of its information service industry revenue is increasing year by year, from 35.83% in 2017 to 53.70% in 2019.
Public information shows that Taiyi is one of the earliest domestic companies involved in the field of digital marketing. It has already accumulated technology and data resources, and has a first-mover advantage. In the current market, digital marketing has once again become a hot topic. Digital marketing fields such as short videos and live broadcasts have become the advertising formats favored by many advertisers. Marketing service companies are ushering in a new round of digital marketing dividend period. Analysis of the Guohai Securities research report shows that from industry data, the mobile Internet advertising market size is expected to reach 484.49 billion yuan in 2020, a year-on-year increase of 16.5%; while advertisers pay more attention to cost-effectiveness and return on investment, advertisers’ digital marketing in 2020 will The willingness to invest in social platforms and video platforms has increased, and the overall growth rate of China’s digital marketing in 2020 is expected to be 14%.
In particular, ByteDance’s layout and expansion in advertising and marketing, games, large screens, film and television content brokerage and other fields can be said to have brought explosive digital marketing growth dividends. Related concept stocks in the A-share market have also set off waves of daily limit increases this year.
Taiyizhishang has been carrying out related business on ByteDance’s Toutiao and Douyin platforms since August 2018. In the fourth quarter of 2018 and 2019, the business of these two platforms achieved rapid operating income. Growth, among which the related businesses involving these two platforms achieved operating income of more than 500 million yuan in 2019, of which the Douyin platform exceeded 360 million yuan and the Toutiao platform exceeded 150 million yuan, with year-on-year growth rates of 196.8% and 123.6% respectively. Industry analysts believe that ByteDance has broad prospects and Zhejiang Furun has full momentum for future performance growth.
In addition, Zhejiang Furun’s marketing data analysis services have a gross profit margin of 83.72%. According to its latest announcement, customers’ requirements for the dimension, accuracy and data conversion rate of data labels are increasing day by day. The company needs to purchase a large number of data sources and hot data resources, and the frequency of data usage increases due to the increase in customer demand, so business costs decreased and gross profit margin increased. As more and more advertisers increase their demand for big data marketing, marketing data analysis services will also become a performance growth point for Zhejiang Furun.
Zhejiang Furun said that with the further acceleration of the construction of new infrastructure such as 5G and data centers, digital technologies such as big data and blockchain will be more widely used and implemented. Seize the opportunity of “new infrastructure”, continue to expand big data business with Taiyizhishang as the main body, and actively promoteWe will have business transformation to promote the health of financial indicators; with Fulun Digital Chain as the main body, we will conduct business layout in the blockchain ecological field; with Fulun Digital as the main body, we will conduct business layout in the field of financial technology.
The announcement shows that if the initial public listing transfer fails to recruit qualified intended transferees or the transaction fails to be completed in the end, a second public listing will be conducted at a base price of no less than 70% of the assessed value. transfer. If the second public listing transfer fails to recruit qualified intended transferees or ultimately fails to complete the transaction, the third public listing transfer will be conducted at a base price of no less than 80% of the base price of the second public listing transfer. The transaction price shall be subject to the actual transfer price.
About Furun
Founded in 1994, it was initiated by Zhejiang Knitting Factory, the predecessor of Furun Holdings, a state-owned unit, in conjunction with a number of companies. Zhejiang Furun is listed on the Shanghai Stock Exchange and is the first listed company in Zhuji City, Zhejiang Province. After more than 20 years of development, the company has now formed a two-wheel-driven business model driven by traditional businesses such as printing, dyeing and textiles, steel pipe processing and sales, and emerging businesses of marketing technology. The traditional business has a solid foundation. The printing and dyeing company is among the top 10 in the national printing and dyeing industry. Minghe Company is one of the largest seamless steel pipe manufacturers in East China. In the emerging business, Taiyi Zhishang is one of the earliest companies in the country to deploy marketing technology. , forming a accumulation of technology and data resources, giving it a first-mover advantage.
Since its establishment more than 20 years ago, Zhejiang Furun has gone through three stages of development and gradually expanded its business boundaries in response to industry cycle adjustments, and its revenue has also increased significantly.
1994-2007: It started as a textile printing and dyeing company and is a large state-owned textile enterprise. Zhejiang Furun was approved by the Zhejiang Provincial Joint Stock System Pilot Work Coordination Group and is jointly owned by Furun Group Company (formerly Zhejiang Knitting Factory), Zhejiang Zhuji Wool Textile Factory, Zhuji Electric Power Industrial Corporation, Zhejiang Hangjiahu Technology Development Company, and Zhuji Yinda It is a joint-stock enterprise jointly established by the Economic and Trade Company and Zhuji Television Development Company, and was registered in 1994. Mainly engaged in needlework textiles, worsted woolen fabrics, silk textiles and silk garments, it was a large state-owned textile enterprise at that time. Listed on the Shanghai Stock Exchange in 1997, revenue increased from 80 million to 662 million in 2008.
2008-2016: Expand the second main business of steel pipe sales. In 2008, through the capital increase and share expansion of Minghe Steel Pipe, steel pipe sales and processing developed into the company’s second main business. As of 2016, the company’s operating income increased to 879 million.
2017 to present: Upgrading and transforming into a marketing technology company. While promoting the upgrading of its traditional main business, the company acquired 100% equity of Taiyizhishang, a digital marketing technology company, to realize the transformation to marketing technology. After being merged into Taiyi Index, the company’s revenue grew rapidly, from 879 million in 2016 to 2.767 billion in 2018. At present, the company adopts the strategy of industry integration with advance and retreat, and has further clarified its main business by transferring shares of Furun Haimao, Furun Clothing, People’s Drugstore, etc.
The controlling shareholder is Furun Group, and the actual controller is Zhao Linzhong. As of 2019Q1, the company’s top four shareholders are Furun Holdings, Huifeng Venture Capital, and Jiang Yougui, with shareholding ratios of 19.40%, 6.17%, and 6.03% respectively. Among them, Huifeng Venture Capital holds 81% of the shares of Furun Holdings. Zhao Linzhong controls Huifeng Venture Capital by holding 38.77% of the shares, indirectly controls Furun Holdings, and is the actual controller of the listed company. In 2016, the company acquired Taiyizhishang by issuing shares to purchase assets. After binding the interests of the listed company and Taiyishishang’s original shareholders, Jiang Yougui, the former founder of Taiyishishang, held 6.03% of the shares and became the company’s third largest shareholder.
Furun Holdings was restructured from a state-owned factory to form a multi-industry radiation circle. Furun Holding Group was founded in 1982, formerly the state-owned Zhuji Knitting Factory. In 2011, it was restructured from a wholly state-owned enterprise to a state-owned capital-participated enterprise. Currently, in addition to Huifeng Venture Capital, the Zhuji Municipal People’s Government still holds 19% of the shares of Furun Holdings . Before the restructuring, Furun Holdings merged 22 state-owned enterprises such as the state-owned Zhuji Winery, Zhuji Commercial (Group) Company (Zhuji Commercial Bureau) and its affiliated trading companies, the state-owned Zhuji Fertilizer Factory, and the second light and large collective enterprise Zhuji Textile General Factory. Since then, the group has radiated its industries into finance, building materials, film and television, the Internet, high-value comprehensive utilization of waste textiles, and the Internet, real estate, elderly care services, ecological agriculture and other fields. </p
