The fruit shop downstairs is going to IPO.

Investment community - Tiantian IPO learned that on May 2, Shenzhen Baiguoyuan industry (Group) Co., Ltd. (hereinafter referred to as Baiguoyuan) submitted a listing application to the Hong Kong stock exchange, officially sprint for IPO, and is expected to win the “first share of fruit retail”.

The rise of Baiguoyuan is an inspirational history of grass-roots counter attack. The protagonist is Yu Huiyong, a post-60s native of Dexing, Jiangxi Province. In the 1990s, Yu Huiyong, who graduated from Jiangxi Agricultural University, went south to Shenzhen to start a business with 200000 yuan. After some tossing, he with rich agricultural experience quickly locked in the fruit retail industry and called his wife Xu Yanlin, who was an English teacher in his hometown. They opened their first orchard store.

Over the past 20 years, today’s Baiguoyuan has opened all over the streets and alleys of China, opening more than 5300 stores, but 99% of them are franchise stores, with a revenue of more than 10 billion yuan a year. After Baiguoyuan, a group of VC / PE, including Tiantu investment, Shenzhen Venture Capital, CICC capital, cornerstone capital and source capital, finally waited for the bell of IPO.

Selling fruit is a chore. Nowadays, China’s fruit Jianghu is divided into three parts: nanbaiguo, beixianfeng and xihongjiu, which correspond to Baiguo orchard from Shenzhen, Xianfeng fruit from Hangzhou and Hongjiu fruit from Chongqing. They grow up in the same era and stand in front of the IPO gate, but their opponents are not each other.

Jiangxi Laobiao, 53, is the largest fruit shop in China

Going to IPO

Yu Huiyong is the soul of Baiguoyuan.

In 1968, Yu Huiyong was born in Dexing, Jiangxi Province. After graduating from Jiangxi Agricultural University in 1991, he entered Jiangxi Academy of Agricultural Sciences to engage in bacteria research. At that time, the wave of reform and opening up was surging, and Yu Huiyong decided to leave his “iron rice bowl” and go south to Shenzhen for gold. After experiencing the failure of investing in stocks and the failure of transportation entrepreneurship, Yu Huiyong was not determined to go out of the system.

In 1995, Yu Huiyong came to Shenzhen again with only a few hundred yuan left. He returned to his old business and applied to become the distribution manager of Shenzhen Aidi green food company. At that time, imported red Fuji with high price was sold in Shenzhen fruit market. Yu Huiyong personally went to Shandong to purchase goods and sold domestic Red Fuji with high quality and low price to Shenzhen.

In order to attract customers, Yu Huiyong promised to deliver goods to the door and set up 27 direct selling points in the city. This sales model was a great success. Aidi company achieved sales of nearly 100 million yuan in 2001, and Yu Huiyong himself became a famous “sales king” in the fruit industry in Shenzhen.

That is, this professional experience made him see the hidden business opportunities in the fruit chain industry. At that time, there was no fruit chain brand at home and abroad. Yu Huiyong once again came up with the idea of Entrepreneurship: he has been thinking about whether he can not only engage in retail, but also combine wholesale and retail, so as to expand the scale by means of chain operation. What about making fruit an international brand like McDonald’s and KFC?

With such an ideal in mind, Yu Huiyong took out all his possessions and established Shenzhen Baiguoyuan Industrial Development Co., Ltd. at the end of 2001. Xu Yanlin, his wife who was a junior high school English teacher in his hometown, called to Shenzhen. The couple opened the first store of Baiguoyuan hand in hand.

When the first store opened, the business was very hot, with sales of 410000 yuan in the first month. In order to expand the business scale, Yu Huiyong struck while the iron was hot and started the franchise system. In the following years, he opened hundreds of stores at one go. At the same time, Baiguoyuan has fallen into the first “pit” since its establishment - the loose franchise chain model has led to uneven fruit quality and greatly damaged the brand image.

Yu Huiyong began to reflect: the basic demand of the chain model is standardized products and services, while fruit is a product that is very difficult to standardize; The fruit industry lacks talents with service awareness and management skills. If Baiguoyuan wants to go on, we must solve these two problems.

He decided to change the status quo. Yu Huiyong immediately stopped the franchise mode and bought back the shares of all franchisees in three years. He decided to let his employees do it and train talents from scratch. He even dug an expansion team of dozens of people from Japanese convenience store giant 7-Eleven and designed a new joining scheme for it.

Over the past 20 years, Baiguoyuan has spread over more than 130 cities in China, with more than 5300 stores and a total membership of more than 67 million. It is the largest fruit retail enterprise in China. In terms of fruit retail sales, Baiguoyuan ranks first among all fruit franchised retail enterprises in China.

After wandering around, Baiguoyuan finally stood in front of the IPO gate of the Hong Kong stock exchange. Yu Huiyong and his wife are expected to harvest their first IPO in their life.

The couple is at the helm and earns 10 billion a year

But 99% are franchise stores

How can a seemingly insignificant fruit store support an IPO?

There must be a hundred orchards at the door of your community. The prospectus mentioned that Baiguoyuan has built the largest fruit franchise retail network close to the community, online and offline integration and store warehouse integration in China.

The outside world may not know: by 2021, Baiguoyuan’s offline store network has more than 5351 stores, of which 5336 are franchised stores and 15 are self operated stores, which are mainly concentrated in residential areas, commercial streets and other high traffic areas. In other words, 99% are franchise stores, which is amazing.

According to the two AB franchising schemes given by Baiguoyuan’s wechat official account, the total investment in opening a franchise store is 277000 – 297000 yuan and 85000 yuan respectively, of which 62000 yuan of signboard equipment, 30000 yuan of information equipment and 100000-120000 yuan of estimated decoration are omitted in scheme B.

The revenue of Baiguoyuan mainly comes from the sales of fruits and other products, royalties and franchise income, membership fee income and other income. According to the prospectus, from 2019 to 2021, the revenue of Baiguoyuan was 8.976 billion yuan, 8.853 billion yuan and 10.289 billion yuan respectively, and the gross profit margin in the same period was particularly striking: 9.8%, 9.1% and 11.2% respectively, which was not high on the whole; The net profit was 248 million yuan, 46 million yuan and 226 million yuan respectively.

In 2021, the total orders of Baiguoyuan exceeded 290 million, of which the orders from online channels accounted for about 23%