Leju Holdings Ltd Finance and Economics Wang MinOn September 28th, Mengjinyuan Gold Jewelry Group Co., Ltd. (hereinafter referred to as "Mengjinyuan") submitted a prospectus to the Hong Kong Stock Exchange for listing on the Hong Kong main board, with CITIC as the exclusive sponsor.

According to the prospectus, Mengjin Garden, formerly known as Changle Huaye Jewelry, was founded by Wang Zhongshan and Zhang Xiuqin in 2000. According to Frost Sullivan, as of the last practical date, Mengjin Park was one of the few original brand manufacturers of gold jewelry (OBM) and one of the few companies to operate in the full value chain.

According to Frost Sullivan, from 2018 to 2022, Mengjinyuan is the only gold jewelry brand that continuously ranks among the top 10 gold jewelry processing enterprises of the China Gold Association and the top 10 gold jewelry sales revenue in China. And both ranked in the top five. In 2022: in terms of gold processing volume and gold jewelry revenue, Mengjinyuan ranked fourth and fifth among Chinese gold jewelry brands respectively; in terms of gold jewelry revenue (excluding gold bars) and the number of offline stores in third-tier and below cities, Mengjinyuan ranked third and fourth among Chinese gold jewelry brands.

Mengjinyuan mainly sells products to customers through the offline sales network composed of franchisees and self-owned stores, and also provides products to customers through online sales on the e-commerce platform. As of June 30, 2023, the sales network of Mengjin Park Gold Jewelry covers 2756 franchise stores, 35 proprietary stores, seven direct service centers and 17 provincial agents, as well as the consumer network of online stores on mainstream e-commerce platforms.

In terms of performance, in 2020, 2021, 2022 and the first half of 2023, Mengjin Park's operating income was 10.834 billion yuan, 16.871 billion yuan, 15.724 billion yuan and 9.316 billion yuan respectively, and its gross profit was 641 million yuan, 536 million yuan, 759 million yuan and 528 million yuan respectively. The corresponding net profit was 174 million yuan, 224 million yuan, 181 million yuan and 106 million yuan respectively.

For the years ended December 31, 2020, 2021 and 2022, and the first half of 2023, the main components of Mengjin Garden sales were gold jewelry and other gold products, accounting for about 94.1%, 97.5%, 97.9% and 98.1% of the company's total revenue.

According to the prospectus, in the shareholder structure of Mengjinyuan before listing, Wang Zhongshan, Zhang Xiuqin and his wife, as well as their son Zhang Guoxin and daughter Wang Na, held about 89.39% of the shares as a group of controlling shareholders directly or indirectly. Among them, Wang Zhongshan directly holds 28.27%, Zhang Xiuqin holds 26.19%, Jin Meng Partnership (Wang Zhongshan 18.72%, Zhang Guoxin 18.18%, Wang Na 18.18%, some executives and employees hold the remaining shares) holds 9.60%. Jinyuan Partnership (Zhang Xiuqin 81.33%, some executives and employees hold the remaining shares) 3.93% Jinlong partnership (Zhang Xiuqin 59.89%, Dong Jiangao or company employees hold the remaining shares) holds 3.93%, while Tianjin Yuanjin Meng (Zhang Guoxin 50%, Wang Na 50%) holds 17.46%.

In addition, Tianjin Haitai Group owns 4.37% of the shares through Tianjin Haikaixin; CITIC (06030.HKtemology 600030.SH) holds 1.82% through CITIC investment; Zhao Duxue, chairman of Shandong Mining Machinery (002526.SZ), holds 1.75%; Huang Yi (Haiqing), a famous Chinese actress, holds 1.53%; Zhang Yizhen, former director and chief financial officer of Shandong Mining Machinery, holds 1% Mr. Zhang Jianjun, former director of Shandong Mining Machinery, holds 0.15% shares.