Beijing was full of spring in mid-March, and the "China Food and Beverage Innovation Conference", known as "Davos" in the catering industry, was launched as scheduled. At this conference, Zhang Zhenwei shared his entrepreneurial experiences over the years as the CEO and founder of the brand "luxury".

It is thanks to the success of the sub-brand 00520.HK that it has been recognized by the market again.

When Zhang Zhenwei stepped off the stage of the speech, the guests applauded, but amid the warm applause, the smile on Zhang Zhenwei's face seemed to have a different meaning. Investors did not know that a storm had begun to brew.

A month later, it was officially announced that Zhang Zhenwei had officially left the company on April 15 and would no longer hold the position of founder CEO and other positions in the group. After Zhang Zhenwei leaves office, he Guangqi, chairman of Jiaomu, will directly listen to the report on the business operation data and situation of Jiawei.

Despite his clear statement, Zhang Zhenwei left not because of lack of motivation, but because he wanted to do something of his own. However, after the disclosure of the news, the share price of Jiafu still plummeted, falling as much as 20% at one point.

What kind of impact will Zhang Zhenwei's departure have on quacking? Is the sudden collapse in share prices a short-term correction or a revaluation based on the role of management?

01 the "soul" of sipping

In the past year, the outbreak of the epidemic has dealt a heavy blow to the real economy, and the performance of hot pot, as an offline-based industry, has been seriously affected. Whether it is industry leader Haidilao International Holding or quack feeding, their performance is significantly lower than in 2019.

According to the earnings report released on March 4, the group's revenue fell by about 9.5% compared with 2019, but the total profit for the year was only 11.485 million yuan, down 96% from 290 million yuan in the same period in 2019.

However, the negative side does not suppress the value of sipping for a long time. Even in such an obviously negative situation in the industry, the share price of Jiafu is still rising, even reaching a record high of HK $27.15 in February this year.This stems from the market's recognition of the multi-brand strategy.

Before this, we have given a clear point of view to Haidilao International Holding, in today's iterative consumer taste, it is difficult to rely on a single popular style to continue to succeed.

Different from Haidilao International Holding's continuous strengthening of popular styles, quack is an outstanding representative of successfully cultivating new brands, giving birth to brands such as tea, in xiabuxiabu, tea, rice tea, sipping, sipping and hot.In particular, the focus on high-end products has almost taken the place of the main brand and become the core of investors' attention.

Jiawei is a new brand established in 2016, which focuses on the differentiated operation of the middle and high-end market, which is operated by Zhang Zhenwei.In a short period of four years, the revenue of PUBG ranges from 0 to 1.689 billion yuan.It has become one of the important sources of revenue.

Especially in 2020, when the epidemic raided, the total revenue of Menglu Group fell by 9.5% to 5.455 billion yuan compared with the same period last year.On the other hand, the revenue contributed by Jiafu has increased by more than 40% compared with the same period last year, and has successfully guarded the "valuation bottom line" of Jiafu on its own.

The share of revenue in the group has been rising over the past four years. In 2017, brands accounted for only 3.19% of the emerging brands, but by 2020, the proportion of brands in the group had risen to 30.96%.

According to store data, the growth of the number of stores has slowed sharply since the end of 2020, and even showed negative growth in the first half of 2019.

At that time, retail successfully took over the responsibility of the company's performance growth and re-opened the road to store expansion in the second half of the year after a brief period of slow growth.

As of the latest earnings data, the ratio of quack to store has fallen to 7.58 from 35.14 in 2017. In other words, at present, one out of every nine stores in the group is a retail store. And as the brand continues to grow, this figure is expected to decline further.

Thus it can be seen that the core logic that has supported the rise in share prices in the past year is the success of quack. Without the strong growth of the economy, it is hard to imagine the attitude of investors towards sipping and feeding.

02 a doomed breakup

Since quack is the core of quack, and Zhang Zhenwei single-handedly created it, why did he agree to let Zhang Zhenwei go? Behind this may be a doomed breakup.

When she opened her first flagship store in Sanlitun, Beijing, she had already attracted wide media attention. In an interview with the media, Zhang Zhenwei made grand plans for the future of Zhenwei.

At that time, Zhang Zhenwei put forward three ideas: first, to spread to the whole country within two or three years, and to maintain the pace of opening 30 or 40 stores a year in the future; second, in the company's equity structure, there is a completely independent operation between Jiaofu and Jiafu.Third, it eventually spun off into an independent company that could go public.

In retrospect, the first two ideas put forward by Zhang Zhenwei have actually been realized. Both the operating space and the speed of opening stores are actually carried out step by step in accordance with Zhang Zhenwei's plan.However, in the third idea, there is an essential conflict of interest between Zhang Zhenwei and the management.

Especially at a time when the brand strength of the products is declining and the competitiveness continues to improve, pooling has become the key to the valuation of the capital market.

Under such circumstances, if it is split from the listed company, it is bound to have a serious impact on the valuation of quack feeding.This is unacceptable to he Guangqi, a major shareholder.

From Zhang Zhenwei's point of view, the success of Yun Yi comes entirely from his own efforts. As we all know, quack-feeding brand is a high-speed mode of simple replication, which grabs the market by virtue of unified taste, high performance-to-price ratio and super supply system.

However, the food market is located at the middle and high end of the per capita market of about 150, which makes it necessary to improve food, environment and services in all aspects.

Judging from the development of Jingyi in the past few years, it is obvious that Zhang Zhenwei has successfully cultivated the brand. Although the overturning rate is not as good as that of sipping, the higher unit price of customers still makes it a model with strong ability to attract money.

Even though Zhenwei currently accounts for more than 30% of the revenue in quack-feeding, Zhang Zhenwei still does not have a say in the whole breast-feeding group.From the annual report published by Jiafu, we can hardly find the figure of Zhang Zhenwei and can only appear in the financial report as someone else.

Zhang Zhenwei is ambitious, but obviously he didn't realize his ambition. We don't know how many negotiations have been held between them, but the final result tells us that differences in core interests lead to a preordained breakup.

03 the logic of stock price that needs to be revalued?

As early as March, the news of Zhang Zhenwei's resignation had spread in the market, but at that time, most investors thought it was a smoke bomb thrown by the banker.

However, on the eve of the "China Food and Beverage Innovation Conference", prescient institutional investors have left ahead of schedule.The data show that Hillhouse Capital and Morgan Stanley, the important shareholders of Gaga, have cleared their positions and reduced their holdings one after another, avoiding the collapse of the stock price ahead of time.

The frenzied flight of capital basically means that the market's view on sipping has been reversed, from the past to the negative after the loss of "core assets".

Zhang Zhenwei made a detailed plan at the beginning of Zhenwei's start. Many investors may have a cognitive bias towards the catering industry, believing that the replication of catering is only a brutal expansion of capital. But in fact, in addition to the supply chain, the core resource of the catering industry is human resources.

In particular, the mode that pays attention to the service experience, such as Fengyi, must have a reserve of high-quality service talents. The reason why Zhang Zhenwei sets the speed of opening 30-40 stores a year is based on the planning of the talent reserve in the early stage.

Just like Haidilao International Holding, who was madly bullish by the market in the past, it is precisely because of its high-quality talent incentive and split mode, which is actually the soft power of catering brands.

At this point, there is a significant difference between sipping and sipping. In fact, it is very difficult for the management to apply the success of sipping to sipping. In other words, Zhang Zhenwei has been deeply imprinted with the brand of Zhang Zhenwei, and without Zhang Zhenwei, he may have lost his soul.

It is the reversal of this logic of investment that has just experienced a "value destruction". Although stores and hardware still exist, the core soft power of Jiafu is gone.

If Zhang Zhenwei can work for a long time, investors will not only expect Zhang Zhenwei to incubate more brands.

Rumor has it that after leaving quack-feeding,Zhang Zhenwei will start his own business, and has received heavy capital support from the capital side, and has received 150 million investment from venture capital.

What is more noteworthy is that Zhang Zhenwei's next entrepreneurial project is likely to be the hot pot industry he is familiar with, and he will virtually cultivate a feeding competitor.

When Zhang Zhenwei resigned from Beijing, his former partner became a competitor, while the former partner lost his "soul", while he added one more "competitor," while investors became a bit more saddened.