On September 25th, hundreds of billions-scale grain and oil giant “Jinlongyu” opened online and offline subscribes and the GEM will usher in the largest IPO in history. Today, Jinlongyu officially landed on the GEM, opening 90.51% higher at 48.96 yuan.
Yihai Kerry is one of the largest agricultural products and food processing enterprises in China. Jinlongyu salad oil, which is almost a household name, accounts for nearly 40% of the edible oil market in China. The company is expected to raise 13.8 billion yuan this time, making it the largest enterprise in the history of the GEM.
Yihai Kerry Group is invested by Wilmar International and co-founded by famous overseas Chinese Kuok Hock Nien and his nephew Guo Kongfeng. It has well-known grain and oil brands such as Jinlongyu, Olivoila, Hujihua, and so on. Wilmar International was founded in 1991 and is headquartered in Singapore. Due to the success of Wilmar International, Kuok Hock Nien is well known in Singapore as an overseas Chinese tycoon. The listing of Jinlongyu on China’s growth Enterprise Market is considered to be evidence that overseas Chinese Kuok Hock Nien continues to be bullish on China’s economy.
In 2019, the operating income of Jinlongyu reached 170.743 billion yuan, ranking first on the GEM after listing. The company’s net profit in 2019 was 5.563 billion yuan, ranking second on the GEM.
Yihai Kerry’s business scope involves not only edible oil but also rice, flour, hanging noodles, and so on. Secondly, relying on the food processing industry chain, the company is involved in feed raw materials and oil technology industries, including soybean meal, peanut meal, wheat bran, and other raw materials, oil basic chemicals and their derivatives, daily chemical products, and so on. Among them, the major categories of kitchen food (mainly edible oil, rice, flour, hanging noodles, condiments, soy milk powder, animal fat, special oil, etc.) are the main drivers of performance, accounting for 63.90% of income and contributing more than 70% of gross profits. its gross profit margin is between 10% and 13%.
It is worth noting that the grain and oil products have a high degree of homogenization, especially edible oil is more difficult to tap product innovation, so although the income scale of Jinlongyu is very high, the profit margin is very low. The future of Jinlongyu may rely on its strong channel network in China to develop more business beyond cooking oil in order to improve profit margins.