On the evening of July 21, the China Securities Regulatory Commission issued a document stating that it agreed that Zhang Xiaoquan Co., Ltd. (hereinafter referred to as "Zhang Xiaoquan") would be registered and listed on the GEM, and A shares would be the "first shares".
For this IPO, Zhang Xiaoquan plans to raise 455 million yuan. In addition to 40.95 million yuan and 60 million yuan respectively for corporate management information transformation projects and supplementary working capital, the remaining 354 million yuan will be invested in Zhang Xiaoquan Yangjiang Knife and Scissors Intelligent Manufacturing Center (hereinafter referred to as "Yangjiang Intelligent Manufacturing Center"), of which the investment in production expansion accounts for nearly 80% of the funds raised this time.
Before the Spring Festival in 2021, Zhang Xiaoquan successfully passed the GEM listing review. According to Zhang Xiaoquan’s official website, the Zhang Xiaoquan brand was founded in the first year of Chongzhen in the Ming Dynasty (1628 AD) and has a history of nearly 400 years.
It is said that Zhang Xiaoquan was born in Yixian County, Anhui Province in 1628. During the Chongzhen period of the Ming Dynasty, under the guidance of his father, he became good at scissors. At the end of the Ming Dynasty, Zhang Xiaoquan and his son went to Hangzhou and started a scissors business. In the second year of Kangxi's reign, they changed the original store name "Zhang Dalong" to "Zhang Xiaoquan".
After Zhang Xiaoquan's death, his son Zhang inherited his father's business and added the word "Jin Ji" to the name of "Zhang Xiaoquan" to highlight the authenticity; during the Qianlong period, "Zhang Xiaoquan's Modern Records" included Scissors were listed as tribute. In 1915, Zhang Xiaoquan won the second prize at the Panama International Exposition and the first prize in three national competitions in New China.
In 1997, Zhang Xiaoquan was awarded China's Well-known Trademark; in 2000, Zhang Xiaoquan successfully transformed, Hangzhou Zhang Xiaoquan Group Co., Ltd. was established, and obtained registration protection of origin; in 2006, "Zhang Xiaoquan" was commercialized It was recognized by the ministry as one of the first batch of Chinese time-honored brands.
However, at first, Zhang Xiaoquan Group was affiliated with SASAC. Although it has the advantages of an old brand, the company's operations are not good. In 2007, Fuchun Holding Group signed an agreement with Zhang Xiaoquan Group to acquire 73.5% of Zhang Xiaoquan Group's equity by first increasing capital and then transferring equity.
As a result, the control of Zhang Xiaoquan Group was changed from Hangzhou SASAC to Fuchun Holdings.
But the "Zhang Xiaoquan" dispute is not over.
Although Fuchun Holdings acquired control of Hangzhou Zhang Xiaoquan Group, the company is not the sole owner of the Zhang Xiaoquan brand. In 2007, "Hangzhou Zhang Xiaoquan" and "Shanghai Zhang Xiaoquan" went to court over trademark ownership disputes. The final solution is that Fuquan Investment (a wholly-owned subsidiary of Fuchun Holdings) will conduct a strategic acquisition of Shanghai Zhang Xiaoquan.
In 2012, Fuquan Investment completed its controlling stake in Shanghai Zhang Xiaoquan; in 2015, Shanghai Zhang Xiaoquan completed its industrial and commercial registration and acquired all its shares. So far, Zhang Xiaoquan’s controlling shareholder is Zhang Xiaoquan Group, and the actual controllers are Zhang Guobiao, Zhang Zhangsheng, and Zhang Xincheng (Zhang Guobiao and Zhang Zhangsheng are brothers, Zhang Guobiao and Zhang Xincheng are father and son). The three people hold 71.83% of the company's shares through Fuchun Holdings, Rongquan Investment, and Zhenquan Investment. Among them, Zhang Xincheng holds 51.96% of the shares indirectly through Rongquan Investment and 0.13% indirectly through the group. In addition, Zhang Xincheng holds 6.36% indirectly through Rongquan Investment and 0.39% indirectly through Zhenquan Investment.
It is worth noting that Zhang Xiaoquan’s top ten shareholders are related to many Zhejiang companies. In addition to Juneyao Group and Shihang Group, the actual controller of Toyomaru Jinyuan is Xinchang celebrity Chen, Ya Beibei Chen is a wholly-owned subsidiary of Fosun International, the natural person shareholder is the chairman of STO Express, and the controlling shareholder is Zhejiang Rekoo Investment Co., Ltd. Yu Buxiao
The prospectus shows that Zhang Xiaoquan has developed into a modern daily hardware manufacturing enterprise integrating design, R&D, production, sales and service. Its main products include household items such as scissors, knives, knife sets and scissors.
Taking 2020 as an example, the revenue from scissors difference is 165 million yuan, accounting for 29.09% of the total revenue; the combined revenue from knives and sets of knives and scissors is 142 million yuan and 150 million yuan respectively, accounting for 25.08% and 25.08% of the total revenue respectively. 26.43%, and the total revenue of the three businesses accounted for 80.6%.
Data show that from 2018 to 2020, the company’s operating income was 410.0942 million yuan, 484.0149 million yuan and 572.2566 million yuan respectively, with an average annual compound growth rate of 18.13%; net profits were 43.8085 million yuan, 72.3007 million yuan and 77.2166 million yuan, with an average annual compound growth rate of 32.76%.
In addition, according to the company's forecast, operating income in the first half of this year will be 310-340 million yuan, a year-on-year increase of 23.6% and 35.6%, and net profit will be 44-48 million yuan, a year-on-year increase of 34.1% and 46.3%.
Although the revenue is not bad, Zhang Xiaoquan’s store expansion plan has always been “cloudy”.
According to public information released by Hangzhou.com on July 30, 2010, Zhang Xiaoquan Group plans to open 100 stores in China within three years. Ten years later, Zhang Xiaoquan’s number of stores fell far behind his original goal.
The official website shows that Zhang Xiaoquan’s retail outlets are located in Shanghai, Beijing, Tianjin, Jiangsu, Zhejiang, Guizhou, and Chongqing, and the corresponding number of stores are 7, 1, 1, 5, 8, and 1 respectively. , 1, ***24 stores, 7 provinces.
The prospectus shows that in first- and second-tier cities, Zhang Xiaoquan mainly deploys offline retail stores that meet the needs of mid-to-high-end consumers for product quality and differentiation. Zhang Xiaoquan has launched a number of high-end products that compete with internationally renowned brands. In 2020, products with a unit price of more than 300 yuan accounted for 6.71% of current sales.
In addition, more than 70% of the total output of Zhang Xiaoquan's main products are low-end products produced by OEM.
According to the prospectus, OEM refers to OEM production. Zhang Xiaoquan's product structure has gradually shifted to self-produced products, mainly high-end products, and some low-end products are purchased through OEM.
The prospectus shows that from 2018 to 2020, the self-produced output of Zhang Xiaoquan’s main products was 9.3314 million units/piece, 9.8483 million units/piece, and 9.7776 million units/piece, and the OEM output was 30.3922 million units/piece respectively. 10,000 units/item, 29.8078 million units/item.
From 2018 to 2020, the OEM output of Zhang Xiaoquan’s main products accounted for 76.51%, 75.17% and 77.15% of the total output respectively.
It can be seen that in recent years, Zhang Xiaoquan's OEM output has continued to account for more than 70% of total output, and Zhang Xiaoquan's low-end products may still be its mainstream products.
The other side of OEM is the weakness of patented R&D.
According to Zhang Xiaoquan’s prospectus, Zhang Xiaoquan’s comparable listed companies are Asda Co., Ltd. (hereinafter referred to as “Asda”) and Zhejiang Hals Vacuum Container Co., Ltd. (hereinafter referred to as “Haars”) "Supor") and Zhejiang Supor Co., Ltd. (hereinafter referred to as "Supor").
Compared with comparable peers, Zhang Xiaoquan’s total number of patents is at the bottom, less than half of the previous year.
Data from the State Intellectual Property Office shows that as of June 18, 2021, Zhang Xiaoquan has 141 patents, including invention patents, utility model patents and design patents.
In the same period, the total number of patents for AStar was 301, Hals was 461, and Supor was 431.
In addition, Zhang Xiaoquan’s R&D expense ratio in the past three years has never exceeded the average level of comparable peers.
According to data from Oriental Fortune Choice, Zhang Xiaoquan’s R&D expense rates were 2.14%, 3.47% and 3.51% respectively in 2018 and 2020.
In the same period, AStar's R&D expense rates were 4.56%, 4.89% and 5.87% respectively, hals's were 3.48%, 3.76% and 5.44% respectively, and Supor's were 2.26%, 2.28% and 2.38% respectively.
From 2018 to 2020, the average R&D expense rates of Zhang Xiaoquan’s comparable peers were 3.43%, 3.64% and 4.56% respectively.
As the media said, today’s Zhang Xiaoquan is just a knife and scissors trading company wearing Zhang Xiaoquan’s coat.