Behind the regional dairy industry getting together and going public, both seek development and self-protection.
On November 20, Wen’s shares issued an announcement stating that according to the company’s overall strategic layout, combined with the current development status of the company’s holding subsidiary Wen’s dairy business, in order to better develop the company’s dairy business, the company’s board of directors authorized the company and its subsidiary Wen’s The dairy management team started the preliminary preparations for the spin-off of Wen’s Dairy and its listing on the domestic stock exchange.
Wen’s shares were founded in 1983 and listed on the Shenzhen Stock Exchange in November 2015. The 2019 annual report shows that Wen’s main business is breeding industry, dairy industry, veterinary drug industry, others, meat processing, equipment manufacturing, and accounting for revenue respectively: 96.64%, 1.0%, 0.85% , 0.81%, 0.41%, 0.26%.
It can be seen from the proportion of business that Wen’s shares are actually an agricultural and animal husbandry group with live pig and chicken breeding as its main business and supporting related businesses. Since breeding is a highly cyclical industry, in recent years, Wen’s shares have been making efforts in the upstream and downstream industrial chain to seek transformation. The spin-off of the dairy business and the listing seems to mean that Wen’s shares will further accelerate the pace of diversified business development.
At present, the domestic dairy consumer market is already a red ocean, and regional dairy companies face greater pressure in the market. In addition to fighting with dairy giants, it also faces conflicts between local dairy companies.competition. In Guangdong, where Wen’s Dairy is located, there are brands such as Yantang Dairy, Fengxing Dairy, Xiangmanlou, Kas, and Weiji.
Moreover, the research and development of dairy products requires a lot of financial support. Therefore, for regional companies, going public is one of the fastest ways to raise funds.
As for whether Wen’s Dairy can break through among many dairy companies after its listing, it remains to be observed.