Original title: Farewell, a generation of “national brand” legends! Today is the last listing day! Source: China Fund News

The “Huiyuan Juice” that accompanied us when we grew up will officially cancel its listing status on January 18.

On the evening of January 13, Huiyuan Juice (01886.HK) announced that the Stock Exchange Listing Review Committee had held a review hearing on December 9, 2020 to review the delisting decision. On January 5, 2021, the Listing Review Committee notified the company that it had decided to maintain its delisting decision.

However, the Board of Directors expressed “disappointment and disagreement with the decision” of the Listing Review Committee. The Board of Directors of the Company believes that the Company has done its best and has used all available resources to try to meet the conditions for the resumption of trading.

According to the announcement, on January 6, 2021, the Stock Exchange sent a letter to the company informing the company that the final listing date of the company's shares will be January 15, 2021, and that the listing status of the shares will be cancelled at 9:00 a.m. on January 18, 2021.

Zhu Xinli's father and daughter quit the board of directors

Beijing Huiyuan launches pre-restructuring process

In February 2020, Huiyuan ushered in the biggest personnel change in history. Founder Zhu Xinli's father and daughter withdrew from the board of directors of the listed company. At the time, China Huiyuan Juice Group Co., Ltd. announced that in order to invest more time in other matters, Mr. Zhu Xinli had resigned as Chairman of the Board of Directors, Executive Director, Authorized Representative and Chairman of the Strategy and Development Committee of the Company, effective February 12, 2020; at the same time, Zhu Shengqin, the daughter of Zhu Xinli, had resigned as Executive Director, effective February 12, 2020.

Following Zhu Xinli's resignation, Executive Director Ms. Ju Xinyan was appointed as Chairman of the Board.

The withdrawal of Zhu Xinli's father and daughter from the board of directors has been interpreted by the outside world as Huiyuan's move to pave the way for the introduction of new capital, but so far, no capital has given them an olive branch.

On January 11, Beijing Huiyuan received a pre-restructuring decision issued by the court. According to the announcement, Shandong Deyuan International Logistics Co., Ltd. filed a pre-restructuring application with the Beijing No. 1 Intermediate People's Court of the People's Republic of China against Beijing Huiyuan Food and Beverage Co., Ltd., one of the company's wholly-owned subsidiaries. The failure of an enterprise to reach a pre-restructuring plan will not cause the enterprise to enter bankruptcy and liquidation procedures.

The court decided to initiate pre-restructuring procedures for Beijing Huiyuan and appointed a temporary administrator. During the pre-restructuring process, the interim manager shall perform a number of duties, including clarifying the overall direction of the restructuring work, organizing negotiations between Beijing Huiyuan and stakeholders such as funders, creditors, and (intending) restructuring investors to draw up a pre-restructuring plan, and guiding and assisting Beijing Huiyuan in introducing restructuring investors as needed.

Zhu Xinli and his “juice empire”

The Coca Cola takeover case was hit hard after it failed

According to public information, Zhu Xinli, born in 1952, is a native of Yiyuan, Shandong, and is the founder of Huiyuan Group.

In 1992, 40-year-old Zhu Xinli resolutely threw away his “iron rice bowl”, quit his job and went to sea, and founded Shandong Zibo Huiyuan Food & Beverage Co., Ltd. In 1993, after the first batch of apple juice concentrate was produced, Zhu Xinli went to Germany alone with samples to attend a food fair. A contract for the export of 5 million US dollars of concentrated juice was signed at the German Food Fair, from which the first pot of gold was obtained. Since then, Huiyuan juice concentrate has been exported to more than 30 countries and regions.

In 1994, Beijing Huiyuan Food & Beverage Co., Ltd. was founded; in 1997, Zhu Xinli spent a huge amount of 70 million dollars to win the 5-second advertising time of the news broadcast time on CCTV, which made Huiyuan Juice rapidly increase its popularity and become a “national drink”; in 1998, it began to lay out and build factories for the whole country; by 2000, Huiyuan juice had firmly occupied 23% of the market share and was in a leading position in the market.

However, Zhu Xinli also has more ambitious goals. In order to raise capital, in February 2007, Huiyuan Juice was listed on the main board of the Hong Kong Stock Exchange, raising HK$2.4 billion.

At a time when Huiyuan Juice was in its “highlight moment,” Coca Cola's failed acquisition hit it hard.

On September 3, 2008, Coca Cola and its wholly-owned subsidiary AltanticIndustries jointly announced that it would acquire all of Huiyuan Juice's issued share capital and all of Huiyuan's unexercised convertible bonds at a total price of HK$17.92 billion; cancel all Huiyuan's unexercised share options and put forward voluntary cash acquisition proposals. This became Coca Cola's biggest acquisition deal in China at the time and in its development history other than the US.

After trading resumed on September 3, the stock price soared 164.25% on the same day due to news, and the market was ignited for a while.

However, after Coca Cola announced the acquisition of Huiyuan Juice, it quickly caused an uproar in the country. According to an online survey involving nearly 70,000 netizens, up to 82% of netizens opposed Coca Cola's acquisition of Huiyuan Juice.

On March 18, 2009, the Ministry of Commerce released news that it rejected Coca Cola's acquisition of Huiyuan. It is determined that this concentration will have an adverse effect on competition, and this concentration of operators is prohibited. According to information, this was not only the first foreign acquisition case rejected by the Ministry of Commerce after the implementation of the “Anti-Monopoly Law” in August 2008, but it also meant that the transaction case of the largest foreign-funded enterprise at the time wholly acquired a Chinese company came to an end in a negative form.

Affected by the news, Huiyuan juice plummeted 19.42% on March 18, 2009, plummeted by more than 42% on March 19, and continued to plummet by 9.79% on March 20. The cumulative decline in stock prices on the 3rd was nearly 58%, and the market value was low.

Huiyuan failed to marry a “good woman” as expected, and as a result, she lost an opportunity to make a big leap in development. In an interview many years later, Zhu Xinli said, “I think this is an opportunity. If we take 2.5 billion US dollars from Americans, if we invest in modern agriculture in China, we can help many rural areas and farmers implement large-scale management, technological management, and branded management. At the same time, we can also use the Coca Cola platform to transport fresh Chinese fruit and juice concentrates to more than 100 countries around the world.”

Zhu Xinli's assets of 4.1 billion yuan were frozen

Restrictions have been imposed many times and become “old friends”

After the acquisition failed, Huiyuan began to decline. In April 2018, without approval from the board of directors of Huiyuan Juice, Huiyuan Juice loaned 4.275 billion yuan to its subsidiary company, Beijing Huiyuan Beverage Group. It did not sign any agreement and did not disclose it to the outside world. Since Beijing Huiyuan Juice is not a listed company, Huiyuan Juice has violated the listing rules of the Hong Kong Stock Exchange, leading to the suspension of stock market trading.

At a time when a series of crises followed, in May 2019, Zhu Xinli was listed as an untrustworthy executee by the court. On December 11, 2019, China Deyuan Capital (Hong Kong) Co., Ltd., where Zhu Xinli is the authorized agent, was blocked by the court, and 4.1 billion yuan of assets were frozen. As a result, Huiyuan Juice Group was imprisoned.

Earlier, a civil ruling disclosed by the China Judgment Documents Network showed that,China Merchants BankOn September 20, 2019, I applied to the court for pre-litigation property preservation, requesting the seizure, seizure, and freezing of shares (including shares, dividends, etc.), bank deposits, and other assets worth RMB 4.103 billion, held by China Deyuan Capital (Hong Kong) Limited. The applicant, China Merchants Bank Co., Ltd., has provided a guarantee.

The court finally ruled that the assets of the respondent China Deyuan Capital (Hong Kong) Co., Ltd. were sealed, impounded, and frozen, with a limit of 4.103 billion yuan. The period for freezing bank deposits is one year, the period for seizing movable property is two years, and the period for seizing immovable property and other property rights is three years.

According to information, the authorized representative behind Deyuan Capital is Zhu Xinli, the founder of Huiyuan Juice.

In addition to this, Zhu Xinli has also been subject to spending restrictions several times. On December 2, in a financial leasing contract dispute with Minsheng Financial Leasing Co., Ltd., Zhu Xinli received a consumption restriction order from Tianjin No. 3 Intermediate People's Court due to failure to fulfill payment obligations determined by legal instruments in force within the specified period. On May 29, 2019, Zhu Xinli was once again included by the court on the list of untrustworthy executees due to his violation of the property reporting system and became a veteran.

Huiyuan Juice lost money for 6 consecutive years

10 billion dollars of debt drags down performance

From 2011 to 2016, Huiyuan has been losing money for six consecutive years. At the same time, stock prices continued to chatter and plummeted.

In the first year after listing, Huiyuan Juice's total revenue in 2007 was 2,707 million yuan, and net profit was 640 million yuan. However, although total revenue rose to 2,849 billion yuan a year later, net profit plummeted 86%, leaving only 88.9 million yuan. Over the next few years, the net profit performance was also very unstable.

While operating income has fluctuated and increased, Huiyuan Juice's non-net profit has been negative for 6 consecutive years. According to the annual report data, from 2011 to 2016, Huiyuan Juice's annual non-net profit was -230 million yuan, -318 million yuan, -479 million yuan, -575 million yuan, -553 million yuan, and -208 million yuan, respectively.

Entering 2017, Huiyuan Juice's performance improved slightly. In 2017, the company achieved operating income of 5.397 billion yuan and net profit of 135 million yuan. After deducting non-return net profit, the company turned a loss into a profit, and recorded 213 million yuan.

However, it should be noted that Huiyuan Juice's debt is increasing year by year. According to Wind data, by the end of 2017, Huiyuan Juice's total debt had reached 11.403 billion yuan.

In 2018, Huiyuan 100% fruit juice and medium concentration fruit and vegetable juice accounted for 43.7% and 31.5% of market sales, respectively. Compared with 2017, the increase reached 0.9% and 6.9% respectively, continuing to rank first in medium and high fruit sales. However, this performance was also unable to withstand the pressure of the market. Finally, in April 2018, Huiyuan Juice announced the suspension of stock market trading.

In the current fiercely competitive market environment in the juice industry, “You have a Huiyuan, it's called the Lunar New Year”. This advertising slogan, which is full of festive atmosphere, may slowly fade out of everyone's eyes.