Capital's "good boy": creating 1439 times Hong Kong stocks super-rare miracle 21-year-old "old age" "good boy" turned out to be the most sought-after darling of Hong Kong's capital market.
On November 24, 2010, the world-famous baby carriage king, Goodbaby International Holdings Co., Ltd. (hereinafter referred to as "good boy") landed on the Hong Kong stock market. Under the strong stimulation of the concept of domestic demand, after the enthusiasm of investors, the good children finally won the 2010 Hong Kong stocks overweight purchases with an amazing 1458 times oversubscription. After 13 years, the Beijing Stock Exchange was re-opened in 1997. Created a 1376 times oversubscription record.
Despite the brilliant record, the good boy CFO Liu Tongyou did not feel relieved after the listing. In a good-looking voice, how to maintain a consistent and good communication with investors is the next step of Liu Tongyou's work. "Good children can be oversubscribed by the company, and they are not surprised by the management of the company. We are very aware of the good children." Liu Tongyou, who has been a good boy for 16 years, told the CFO magazine.
Long enough entrepreneurial history
Compared with the cutting-edge companies that have been rushing to the capital market for three or five years, the long-term growth of good children is a favorite of institutional investors.
"Good children have a long history of entrepreneurship. Through these 21 years of combing, investors can see the growth genes of a company." Liu To
ngyou believes that this is the biggest reason for good children to be trusted by investors.
The good boy of 1988, like the wow haha at the time, started from a school-run factory that could only be described as "Jane". At that time, apart from the factory left behind, the school left a small amount of “financial burden”. Due to the loss of some of the previously produced grinding tools, the company was on the verge of bankruptcy. Song Zheng, then a middle school teacher, was also picked up by the leader of the Education Bureau.
After Song Zheng was still taking over, he discovered the huge potential of the baby carriage market by chance. Due to the initial lack of funds, Song Zheng also had to earn the first barrel of gold by selling the baby carriage patent, and then developed patent batch production. In the second year after Song Zheng also took over, the good children's stroller participated in a national ordering conference. Due to the multiple functions of the products and the practicability, the good children started in the field of baby carriages. By 1993, the production and sales of good children had achieved the first place in the country.
Shortly after the good-selling children in China, Song Zheng also went to Japan to inspect and saw a very rich variety of children's products in Japanese supermarkets. Song Zheng also immediately realized that the domestic children's products market has great potential for development. As the country with the largest population on the planet, if the children's products market can lead China, it will be able to lead the world. The experience of this Japanese study allowed Song Zheng to have the dream of becoming the world's largest baby carriage manufacturer.
Since then, good children have begun to expand to overseas. First of all, good children focus on the establishment of overseas sales channels. As a leading company in the North American children's products industry, the Dolly Group is also highly optimistic about Song Zheng. It is worth mentioning that the Dolly Group at the time was not optimistic about the prospects of the baby carriage market and was preparing to withdraw from the baby carriage market. Song Zheng also made a special trip to visit Nick Cosdede, president of North American Dolly Company. However, Kosdede did not give the opportunity to meet Song Wei, who was not known at the time. Persevering Song Zheng also used Cos Dede to persuade Cosdade in just five minutes in a pause between the speeches, which ultimately led to the joint venture between Good Group and Goodbaby to establish a good group to develop the US market.
“Good children and Lihao Group cooperate in a one-to-one manner, which is good for the Group to provide channels and good children to provide products.” Liu Tongyou is very optimistic about this exclusive deep cooperation. Good children rely on the advantages of the Group's channel, and their own R & D and innovation advantages, and finally enable the children to promote the baby stroller to Toys R Us, Target, Wal-Mart and other large stores. Now the children's stroller has won in the North American market for 11 consecutive years. The market share is the first.
Although entering the US market smoothly, the Europeans who like fashion are obviously not able to satisfy their tastes. In order to open the door to the European market, Goodbaby spent four years developing new products and eventually won the European market in 2003. According to statistics from Frost & Sullivan, in 2009, the baby stroller accounted for 16.4% of total European sales, making it the largest supplier of baby strollers in Europe.
However, Goodbaby's "world's largest" concept is very different from most of China's export-manufacturing companies, not simple OEM manufacturers. Goodbaby has a world-class R&D center that can provide high value-added products to seize the market. At present, Goodbaby has R&D centers in Kunshan, China, Boston, USA, Utrecht, the Netherlands, and Tokyo, Japan.
At the same time, good children are also seeking a diversified development strategy and sales strategy. So far, the main products of Goodbaby include more than 2,000 maternal and child supplies such as baby strollers, children's bicycles, children's wear, Diaper
s, and car child safety seats. From domestic children's products distributors, starting to expand like retailers. And this time in Hong Kong, Goodbaby has split its babysitting car and child safety seat with the stro
ngest profitability, and it has won the capital market.
Although good children have a long enough development process, this is obviously not enough for the discerning investors. In fact, investors are more concerned about the future growth potential of the children's durable goods industry. Liu Tongyou believes that the future development trend of the industry is also valued by investors. the elements of. "From the perspective of domestic demand, China's children's durable goods market will have huge market demand as the population grows. From the industry perspective, 90% of the world's children's durable goods production capacity will be concentrated in China in the future, while its brand and research and development also Will be transferred to China." Liu Tongyou concluded that in the future China will inevitably have world-class children's durable goods companies.
Of course, the above arguments have long been a consensus among high-level children. For this reason, the good children pay great attention to the company's standardized management before listing, on the one hand, vigorously “de-family”, on the other hand, through multi-faceted management system such as talent introduction, financial standardization management and information construction.
“As early as 2001, after the products went to the international market, Goodbaby absorbed a number of high-end talents from around the world, mainly from the introduction of senior management personnel from multinational companies, paving the way for a global strategy. At that time, talent investment was still very large. But the investment in talent cannot be simply regarded as cost, but more is an investment." Liu Tongyou believes that high investment in the talent side is very worthwhile.
From the current management perspective, most of the executives, including Liu Tongyou, have been working for good children for more than 10 years, and many of them joined the large-scale talent introduction in 2002. At present, there are four people at the top of the good children who have worked in multinational companies and have more than 10 years of work experience. For such a "dream team", Liu Tongyou feels that the best thing is that "this team not only has entrepreneurial passion, but also has professional company operation experience."
Especially in the process of standardization of financial management, although the good boy was still a non-listed company at the time, Liu Tongyou still required to issue three standard forms (balance sheet, cash flow statement, profit and loss statement) to each business department and requested Each business unit is fully reported in accordance with the financial requirements of listed companies and adopts a strict and standard financial management system. After several years of operation, the financial management and control system for good children has gradually been consolidated.
Moreover, as a weapon of standard management, the construction of good children's information construction started earlier. As early as 1996, the good children who started to build up began to promote informationization. “The system we started up with was originally developed by the MRP system. However, with the continuous expansion of the business and the introduction of new sales models, MRP with a single function has been difficult to meet the requirements. Later we launched MRPII in 1999. The system basically covers the management needs of major marketing business departments and branch offices in terms of sales and cost accounting. By 2002, the good children who have formed a global marketing network have officially launched the DRP system, which can be realized anywhere in the world. The sales, inventory, receivables, performance, customer service and other information of any node of the group marketing network.” Liu Tongyou, who participated in and led the entire informatization process, believes that the step-by-step informationization promotion method is more suitable for local enterprises.
Shortly after the good boy went public, an analyst in the Hong Kong capital market publicly questioned the financials of good children in the media. Surprisingly, CEO Song Zheng also saw the negative accusations of the media overjoyed, and immediately took the newspaper to convene management meetings. "Song always felt at the time, and finally someone questioned our management. The external supervision of the public company came." Liu Tongyou talked about this incident. At the meeting, Song Zheng also asked the relevant responsible persons to immediately rectify and standardize the matters that were questioned. "Song always warns everyone that after a good child goes public, it must evaluate and judge it according to a strict valuation system of the listed company. If you want to have the ability, you should dare to get the spotlight to bake."
Use good capital
For companies listed on IPOs, “financing” is often the first demand. However, in Liu Tongyou's view, the good children who are highly sought after by the capital hope to use the listing to transform themselves into a public company. On the one hand, they can hear the voice of external investors and accept more extensive supervision and assistance. On the other hand, they can Make the company's internal management more standardized.
"In fact, judging from the 21-year development history of a good boy, it is not lacking in money. However, if you want to further expand your child's position in the international market, you must need more funds to operate." Liu Tongyou believes Opening the door to a global capital market like Hong Kong is critical to the next step for good kids.
In fact, good children have also been working very early to transform into a company with a more open shareholding structure. As early as 2006, the international private equity fund PAG spent US$122.5 million to acquire 67.4% of the shares from Goodbaby, replacing the founder Song Zheng and becoming a major shareholder. The reason why a good child is being phased by PAG is that it benefits from its long-term occupation of the industry leader in the market, and on the other hand, it has a long-term debt and good liquidity.
Of course, keeping the “cash flow sufficient” becomes a near-impossible task when there are huge fluctuations in external conditions. Under the tight monetary policy that began at the end of 2007, the major domestic commercial banks began to intensify the recovery of liquidity funds under the strong pressure of the central bank and reduced the scale of credit. This has led to an unprecedented compression of bank financing for good children who normally matched funds and business needs. What is more serious is the global financial crisis that broke out in the second half of 2008, which has led to a sharp drop in export orders for good children with high export dependence. A large number of accounts receivable are difficult to recover at normal pace, and the capital chain is unprecedentedly tight.
"This experience has made us reconsider the problem of sufficient cash flow, and has also prompted us to make a determination to improve the company's financing structure and expand its funding channels." Liu Tongyou said.
After more than a year of careful preparation, the Goodbaby listing plan was officially launched on March 25, 2010, and it took eight months on the Stock Exchange IPO on November 24. In the end, the good boy IPO price was set at 4.9 Hong Kong dollars per share, a total of 300 million shares were issued, and the net proceeds raised amounted to 895 million Hong Kong dollars.
Before joining a good boy, Liu Tongyou was very familiar with the operation of the capital market. After graduating from Tianjin University of Finance and Economics, Liu Tongyou served as the secretary of the famous economist Jiang Yizhen. Later, he participated in the early creation process of the Chinese securities market at the China Securities Market Design and Research Center under the “Joint Office”, which became extremely rare in China at that time. Understand the talents of the capital market and have participated in the preparations for the listing of Shanghai Petrochemical's Shanghai, Hong Kong and New York. It was this precious experience that made Song Zheng dig a good boy to Liu Tongyou, who had originally given him a listing consultation plan. "Song is not a pure businessman. He is a person with a strong dream. When the size of a good child is not big, he wants to create a global enterprise."
Liu Tongyou, who claims to be a “side door of capital operation” and transformed into a CFO, is more adept at mining and analyzing financial data from the perspective of investment, and pays attention to the extraction and mining of accounting information. "only by grasping the extraction and mining of business information, financial personnel can grasp the essence of business operations, and financial management personnel will be more aware of the rational allocation of funds, and the early warning and prevention of risks will be in place." It seems that focusing on the in-depth mining of financial data can also effectively control the risk of corporate finance. The vast majority of CFOs who are invested in investment have a strong sense of risk, and Liu Tongyou is no exception. "But I emphasize the interpretation of data to anticipate risks, which is more helpful for company decision-making."
“The financial system must support the business.” Liu Tongyou said that the core of financial management is more important than the risk management. Of course, the two dimensions of “risk” and “support” will also be focused on each stage of the company. “The risk of the financial system and the support for the business need to be balanced, but there are different stages in the different stages. At the beginning of the company’s scale development, the financial support for the business will be more important, and with the company’s scale Expanding, the company's risk management and control is more important."