[Text | Interface, Yuan Yingqi]

Nongfu Spring, which has repeatedly said that there is no need to list, finally decided to list on the Hong Kong Stock Exchange. The company that mainly produces "a little sweet" mineral water has a financing scale of no more than 1 billion US dollars, but it is a high probability event that it will enter the 100 billion market value club after listing.

We carefully read the prospectus submitted by Nongfu Spring to the Hong Kong Stock Exchange and found that the company had mixed feelings.

Nongfu Spring "not bad money"

Nongfu Spring was established in 1996, and its founder Zhong Liangyi holds 87.4% of the shares. The company’s main business contributes about 95% of the total operating income. The main products include drinking water, tea beverages, functional beverages and fruit juice beverages, accounting for 60%, 13%, 16% and 10% of the revenue respectively. Among them, drinking water and fruit juice beverages have grown rapidly.

Image source: Prospectus, Interface News Research Department

According to the prospectus, Nongfu Spring has maintained steady growth in the past three years. From 2017 to 2019, the income was 17.491 billion yuan, 20.475 billion yuan and 24.021 billion yuan respectively, with a compound annual growth rate of 17.2%. Nongfu Spring achieved net profit of 3.385 billion yuan, 3.612 billion yuan and 4.954 billion yuan in the past three years, with a compound annual growth rate of 21.0%.

Image source: Prospectus, Interface News Research Department

In 2019, the comprehensive gross profit margin of Nongfu Spring was as high as 55.4%. Mainly due to the gross profit margin of 60.2% of the largest drinking water product. The gross profit margins of other categories such as tea beverages, functional beverages and fruit juice beverages were 59.7%, 50.9% and 34.7% respectively.

In terms of net profit, the net profit rate of Nongfu Spring rose to 22.8% in 2019, of which sales expenses accounted for the largest proportion of the three fees. Specifically, sales expenses accounted for 24.2% of operating income, and the most important ones were transportation expenses and advertising expenses, which were 2.53 billion and 1.22 billion yuan respectively, accounting for 10.5% and 5.1% of operating income, respectively.

In terms of cash, Nongfu Spring adopts the first payment and then the goods transaction method, and the book receivables are very small. From 2017 to 2019, the company’s net operating cash inflow was greater than the net profit of the year, especially in 2019, the net operating cash inflow was as high as 8.73 billion yuan. From 2017 to 2019, the book structured deposits were 2.04 billion, 3.60 billion and 200 million yuan respectively. The average interest rate earned was between 4.0% and 4.9%.

The sharp decrease in cash in 2019 was due to the concentrated dividend of Nongfu Spring up to 9.50 billion yuan before listing. Among them, the major shareholders received 8.20 billion yuan. Previously, although Nongfu Spring also had annual dividends, the amount was 2-300 million yuan. And the total financing of Nongfu Spring is only 1 billion US dollars.It is certain that Nongfu Spring did not choose to go public because of a lack of funds.

What is the valuation after going public?

Master Kong Holdings, the equivalent producer of mineral water in Nongfu Spring, has been listed on the Hong Kong stock market. In 2019, Master Kong Holdings’ beverage business contributed HK $39.70 billion to operating income, which was greater than Nongfu Spring’s operating income. But net profit was only HK $3.72 billion, far less than Nongfu Spring’s 4.95 billion yuan.

At present, the market value of Tingyi Holdings is 77.20 billion Hong Kong dollars, corresponding to the price-to-earnings ratio of about 20.8 times in 2019. It is estimated that the total market value of Nongfu Spring after listing is at least about 130 billion Hong Kong dollars. In fact, Nongfu Spring is better than Tingyi Holdings in terms of profitability and growth, and the market may give a higher valuation.

According to the prospectus, the drinking water market is still in a stage of rapid development. According to Nielsen’s forecast, it is still expected to maintain a growth rate of about 10% in the next five years. Compared with the beer and condiment market, the drinking water market has more room. Based on the high concentration of the drinking water market, it is also possible to produce a leader with a larger market value than Budweiser Asia Pacific (1876.HK) and Haitian Flavor (603288.SH) in the long run. The average price-to-earnings ratio valuation of beer in the Hong Kong stock market is 30-40 times. The average valuation of soy sauce and vinegar in the class A share market is more than 40 times. Based on this, we have predicted the market value of Nongfu Spring.

Image source: Interface News Research Department

The troubles of Nongfu Spring

Although the situation is good, Nongfu Spring is not a smooth road.

First of all, the drinking water business depends on the source of water, and the bottleneck facing the long-term growth of Nongfu Spring is the limited source of water. According to relevant laws and regulations, units and individuals who directly extract water from natural resources (such as rivers, lakes and groundwater) need to obtain a water extraction license and pay a water resource fee. Enterprises need to extract water according to the approved annual water extraction plan. Moreover, mineral water has the dual attributes of water resources and mineral resources. The production of mineral water should also apply for a mining license according to law. In other words, the scarcity of water sources on the one hand helps enterprises to establish high industry barriers, and on the other hand restricts enterprises to expand production capacity. It is conceivable that with the development of the industry, there are fewer and fewer untapped water sources.

The situation of Nongfu Spring’s newly obtained water sources in recent years is not optimistic. At present, Nongfu Spring has a total of 10 water sources. The main production bases are still Qiandao Lake in Zhejiang, Changbai Mountain in Jilin, Danjiangkou in Hubei and Wanlv Lake in Guangdong, which were obtained before 2005. With the increase in environmental awareness, the water withdrawal from water sources obtained by Nongfu Spring in recent years has become smaller and smaller. In 2019, the newly obtained water withdrawal from water sources was only 504 thousand cubic meters per year. Although the approved water withdrawal from water sources currently owned by Nongfu Spring is much larger than the actual production capacity of the company, the company does not have the problem of insufficient water withdrawal in the short term. However, products concentrated in water sources in Zhejiang, Guangdong, Jilin and Hubei are also limited by the transportation radius.

Nongfu Spring has less water sources that can produce mineral water, which is not conducive to product upgrades in the future. In addition, the average ton price of Nongfu Spring drinking water has declined for two consecutive years, the company explained, because of the increase in sales of large-packaged drinking water with lower unit prices. In the short term, Nongfu Spring may face the risk of lower gross margins.

Due to the scarcity of domestic water sources, Nongfu Spring has begun to go overseas. Nongfu Spring has acquired Otakiri Springs, a New Zealand bottled water company. The prospectus revealed that Nongfu Spring will look for suitable acquisition targets in the future. However, the overseas market is more mature than the Chinese market, and the growth space is limited. The risk of "going out" is really not small.

Image source: Prospectus, Interface News Research Department

Secondly, Nongfu Spring also faces the problem of "succession". The company has five executive directors. Among them, the founder Zhong Shuzi currently serves as the chairperson and general manager of the company, with a shareholding of 87%. Appropriately reducing the founder’s shareholding ratio through listing can achieve the effect of optimizing the shareholding structure and reducing decision-making risks. At present, Zhong Shuzi is 66 years old and has been deeply involved in the operation of Nongfu Spring. Another executive director, Guo Zhen, deputy general manager in charge of the overall operation and production of Nongfu Spring, is also 62 years old. Zhong Shuzi, the son of Zhong Shuzi, is currently a non-executive director of the company and does not participate in daily operations. Zhong Shuzi joined the group in 2014 and is currently the general manager of Yangshengtang (Nongfu Spring Holding Company) Brand Center.

It is worth mentioning that at the same time as the listing of Nongfu Spring, another company controlled by founder Zhong Shanyuan, 603392.SH, landed on the class A share main board on April 29. The current market value is 6 billion yuan, and the daily limit has not been opened. In the Hurun wealth list in 2020, Zhong Shanyuan was listed with 14.10 billion yuan. With the listing of the above two companies, his worth is expected to rank among the top five on the rich list.

　　[PConline Disassembly]Last month, Meilan released a brand new S6 phone as the first celebration of this year. Although the Meilan S6 is not a high-end model, it has brought us breakthrough innovation in some aspects.

　　In the context of the popularity of full-screen mobile phones, the Meizu S6 has followed suit with this design concept. In addition, it boldly abandoned the previous waist-round solid button tradition and switched to the new interaction pattern of side fingerprint recognition + Super mBack. Now, we are going to have a simple teardown of this phone to see how the internal structure of the Meizu S6 with the new interaction pattern is.

　　As the first 18:9 full-screen mobile phone of Meizu Blue, the S6 is equipped with Samsung’s first full Netcom Exynos 7872 six-core processor, with a memory combination of up to 3GB RAM + 64GB ROM, a 5.7-inch full-screen design, a built-in 3000mAh capacity battery, support for 18W fast charging, and pre-installed Flyme 6.3 system based on Android 7.0 deep customization.

Detailed disassembly part

　　This time, we use the Moonlight Silver color scheme of the Meizu S6 as a disassembly equipment. According to the previous practice, the Meizu S6 is turned off first, and then after taking out the SIM card holder, we take out the small screwdriver prepared before to remove the two screws at the bottom.

　　After removing the bottom screws, I started to disassemble the fuselage. Since there was no crowbar ready for a while, the author had to use two suction cups to separate the two sides of the fuselage, and then use a plastic pick to remove the screen and the back case along the gap of the fuselage.

　　Disassemble the back case of the fuselage, you can see the main structure of the back of the mobile phone, the back of the fuselage is mainly divided into the main board, battery and sub-board and other common three-stage structure.

　　The main board of the fuselage has many ZIF connectors connected to the screen. The connectors are combined with ZIF and snap buttons, and a lot of black foam is specially fixed in the back area.

　　There are some small screws around the edge of the main board to fix, just remove these screws and disconnect the ZIF connector to separate the main board and the fuselage.

　　Looking at the rear shell part of the fuselage, we found that there is a large area of metal conductive stickers in the main board coverage area, which can also have a certain thermal conductivity while preventing static electricity.

　　As the first mobile phone to use side fingerprint recognition, the S6 is also very attentive to the 10-channel touchpoint connection with the shrapnel on the main board, so as not to cause damage due to cable displacement, reducing the difficulty of maintenance, and the 10-channel design also guarantees the efficiency of fingerprint data transmission.

　　The fingerprint recognition module has a one-piece design, which not only reduces the difficulty of disassembly, but also reduces the risk of tearing the cable when separating the fuselage. We remove the fingerprint module holder with tweezers, and then remove the fingerprint holder from the fuselage at the bottom of the module.

　　The battery module of the fuselage is fixed by superglue, and the battery capacity reaches 3000mAh, 11.28Wh. It also supports the 18W fast charging solution of 9V2A.

　　The bottom sub-board is covered by a speaker module and has 7 small screws to fix it. After removing the screws with a screwdriver, you can see that the sub-board is connected with a data interface, a headphone interface, and a vibration module, which is connected to the sub-board by welding.

　　Further disassembly revealed that the pressure sensing obtained by the Charm Blue S6 touching the small dots was derived from this linear vibration motor.

　　Linear motors generally appeared in high-end models in previous years. Linear motors can bring a softer vibration sensation, and can be found between the tail plug and the battery. When users touch small dots to achieve mBack, they can provide a relatively short feedback loop, greatly improving the speed and stability of small dot vibration.

　　Meilan S6 is made of all-metal nano-injection molding process to create the back shell of the fuselage. The back cover also uses a specific type of zirconium sand as the back cover of the whole machine for multiple sandblasts, which is more attentive to the fuselage process.

　　Disassembly summary

　　After simply disassembling the internal structure of the Meizu S6, it can be found that the disassembly difficulty of this phone is not too large, and the structural layout inside is also more traditional. This internal design also conforms to the body positioning characteristics of the Meizu S6.

　　Since the Meizu S6 uses side fingerprint recognition for the first time, it is different from the usual structure of previous Meizu mobile phones, and special attention needs to be paid when disassembling. In addition, the connection between the internal fuselage structure and parts of the Meizu S6 is not complicated, and the workmanship is also very solid. The details are also fixed with foam.

　　Overall, with the new trend of side fingerprint interaction and full-screen design, coupled with careful design and workmanship, the Meizu S6 can still be regarded as a young product with innovative personality.

Once a year, the autumn wind is strong, and it is the Double Ninth Festival full of chrysanthemums. In the digital age of the Double Ninth Festival, how should we carry forward the traditional virtues of the Chinese nation of filial piety and respect for the elderly? Recently, under the guidance of the relevant policies of the Ministry of Industry and Information Technology, the information and communication industry has taken active actions to carry out a variety of digital technology senior-friendly activities across the country to help the elderly enjoy a more comfortable, convenient and beautiful digital life.

Internet application transformation helps the elderly cross the "digital divide"

"Let’s go to the market!" On the morning of the 20th, the Party and Mass Service Center of Shanghai Ganquan Road Street Community held a special market. Unlike the traditional market, this was a "suitable market for the elderly" to display innovative digital products. Under the organization of the Shanghai Municipal Communications Administration, 14 companies, including basic telecommunications companies and Internet companies, "set up stalls" to display functions such as "barrier-free reading" and "barrier-free payment methods" for the elderly. The event attracted many of the elderly to the scene, and everyone was eager to try it. They couldn’t wait to experience the suitable functions of various apps. The scene was full of joy and laughter.

"I don’t usually use my mobile phone to buy things. I came to participate in the event today and found that it is so convenient to buy medicine and vegetables on my mobile phone. The characters are large and the content is clear." Grandma Zhang, who lives nearby, said with a smile.

The function design of mobile apps is becoming more and more "suitable for the elderly", which is inseparable from the country’s efforts in digital technology senior-friendly. In recent years, the Ministry of Industry and Information Technology has organized a special project on the transformation of Internet applications senior-friendly across the country, guiding Internet websites and apps commonly used in the lives of the elderly to carry out senior-friendly functions and service upgrades, covering news and information, social communication, life shopping, financial services, travel, medical care and other high-frequency life scenarios for the elderly.

It is reported that a total of 1924 websites and apps have completed senior-friendly transformation, "large font, large icon, high contrast, simple functional interface" of the elder mode makes many of the elderly eye-catching, many specially designed features for the elderly, but also fully consider the needs and characteristics of the elderly. For example, the elderly who cannot read or read can happily chat with their children online by "listening to text messages", the elderly who cannot type can easily shop online through "voice search for goods", the elderly who have difficulty in legs and feet and going out can seek medical treatment online through "telephone consultation", prescribe medicine, and the elderly who cannot understand the operation prompts of the App can complete human-machine verification through "waiting for the countdown", etc. The elderly are more and more handy in the face of various websites and mobile apps. The "digital divide" problem encountered in the face of intelligent technology difficulties is gradually being eliminated by the senior-friendly achievements of digital technology, and the elderly friends can also enjoy digital life.

The new generation of information technology empowers barrier-free information exchange

"Is it true that the video call can display subtitles in this film? I can’t hear the voice of my children on the phone when I’m old, so how can I use this product?" Grandpa Wang consulted China Mobile’s staff. While watching the Double Ninth Festival promotional video in the Beijing Mobile business hall, he saw China Mobile’s senior-friendly smart products and services specially designed for the elderly and their children, so he went to the special hall of senior customer experience with great interest to "immerse" and experience the convenience and intelligence brought by the new generation of information technology.

China Mobile has implemented the relevant policy requirements of the Ministry of Industry and Information Technology, innovatively launched the "5G New Call" function, integrated and introduced artificial intelligence real-time processing technology, and realized functions such as voice-to-text, real-time translation between Chinese and English, as well as mobile phone screen sharing and children’s remote collaboration during the call. In particular, the voice-to-text function has been upgraded to a "large-character version", which is equivalent to a call with large subtitles. When the elderly use this function to call, they can not only hear clearly, but also "see" and "see clearly" the content of the call, which is very convenient.

The Barrier-free Environment Construction Law, which was officially implemented on September 1, proposes that the state should promote the application of new scientific and technological achievements in the construction of a barrier-free environment, and encourage the research and development, production, application and promotion of barrier-free technologies, products and services. It is understood that the Ministry of Industry and Information Technology will coordinate and combine the actual development of digital technology senior-friendly, guide the new generation of information technologies such as 5G, artificial intelligence, and big data to deeply empower senior-friendly transformation and upgrading, vigorously support the transformation of relevant scientific and technological achievements, support the integration and application of emerging technologies in voice control, limb control, automatic speech recognition, etc., and help the elderly and other special groups share information development results by building a barrier-free environment with smooth information and comfortable experience.

The senior-friendly service capabilities of basic telecom enterprises have been significantly improved

On the eve of the Double Ninth Festival, the business halls of basic telecommunications companies in various places are lively. Huangshan Xin’an North Road Telecom Business Hall enters the University for the Elderly to teach the elderly how to use Apps, Jiangsu Suzhou Renmin Road Telecom Business Hall enters the community to send scarves to the elderly, Beijing Mobile Caishikou Business Hall plays a promotional video to explain the "one-click access to manual customer service" hotline for the elderly, Guangdong Unicom sets up a preferential area for the Double Ninth Festival in each business hall to launch the exclusive preferential package for the elderly, Daishan Unicom enters Gaoting Home Care Agency to give the elderly free haircuts…

In the digital age, many of the elderly are accustomed to offline services gradually switched to online, and traditional telephone manual customer service is gradually replaced by artificial intelligence customer service. The elderly generally report that they cannot handle business online and cannot understand artificial intelligence customer service prompts. The Ministry of Industry and Information Technology pays great attention to the "slow crowd" in the "fast era", insists on the parallel innovation of traditional service methods and intelligent services, and guarantees that some of the elderly who do not use the Internet at all can use basic telecommunications services conveniently. According to the reporter’s observation, under the guidance of relevant policies, the three basic telecommunications enterprises have set up special seats for the elderly in the offline business hall, launched the elderly exclusive preferential tariffs, large-character bills, and the elderly over 65 years old "one-click call into manual customer service" and other services, regularly organize service personnel training, and effectively provide the elderly with enthusiastic, sincere and patient high-quality telecommunications services.

In the digital age, the heart-warming story of senior-friendly in the information and communication industry has just begun. Let’s hope that, under the promotion of departments such as the Ministry of Industry and Information Technology, more and more senior-friendly functions and services can meet the elderly, give them "digital wings" for their later life, and share "digital dividends".

　　In the first half of 2024, the competition in China’s auto market became more intense. In the competition of new power models, Wenjiexin M7 became the star product in the current market with its excellent product strength: According to the latest data, from January 1 to June 16, 2024, Wenjiexin M7 sat at the top of the sales list of new power models in the Chinese market with 100,900 vehicles, demonstrating its product strength in power, intelligence, safety and other aspects.

　　"Shuangzhi" is safe, far ahead, and can be driven nationwide

　　Since its launch, Wenjie New M7 has provided users with a more convenient and safe driving experience with its excellent performance and leading technology configuration, winning wide praise from consumers. This is due to its "dual insurance" of physical safety and intelligent safety. First of all, in terms of passive safety, Wenjie New M7 body submarine-grade thermoformed steel accounts for 24.4%, high-strength steel and aluminum alloy account for 80.6%, effectively improving body stiffness and collision safety. In addition, the new car is equipped with eight airbags and front double preloaded seat belts as standard, which provide users with all-round driving safety protection based on more real-life scenario verification. In terms of active safety, HUAWEI ADS 2.0’s active safety capabilities continue to evolve. Its omnidirectional anti-collision system realizes forward, lateral, and backward omnidirectional anti-collision capabilities. The AEB automatic emergency braking maximum braking speed is increased to 90km/h, which can reduce traffic accidents caused by inattention and complex road conditions by 90%. The active safety capability continues to lead the industry.

　　It is worth mentioning that the flagship model of the Wenjie new M7, the Wenjie new M7 Ultra, has been officially launched recently. On the basis of the HUAWEI ADS 2.0 omnidirectional anti-collision system, it has upgraded the 192-line lidar to achieve all-round anti-collision capabilities in the forward, lateral and backward directions. Especially at high speeds, the system can respond quickly to effectively avoid potential collision risks and further enhance driving safety.

　　Ask the new M7 Ultra

　　Multi-scene cockpit to create an exceptional and comfortable driving experience

　　At present, with the blessing of various technologies, cars are no longer just tools for travel. How to meet consumers’ untapped needs with scenario-based thinking, and how to make consumers perceive personalized services during travel are being paid more attention by car companies.

　　Wenjie New M7 focuses on the family travel scene. The five seats are equipped with new "marshmallow" seats as standard, and the ventilation, heating and massage functions of 4 seats are standard. Through Xiaoyi Smart Assistant, the double-row rest function of the main and co-pilot can be turned on by voice. Enjoy six seats with new zero-gravity seats, bringing comfortable enjoyment and relaxation experience. In addition, Wenjie New M7 is also equipped with front and rear double air-conditioning boxes, 17 air-conditioning trends, large touch screen of the rear air conditioner, and fully automatic comfortable electric pedals. In addition, the "zero formaldehyde" cockpit also allows the whole family to enjoy a healthy and comfortable travel experience at any time.

　　On the new M7 Ultra, the comfort level has been upgraded. Its seat design takes into account the comfort of each passenger, especially the front seat can be reclined 69 °, and the depth after docking with the rear seat cushion can reach a maximum of 3m. It can realize the beach chair mode of double easy lying and pinging. The single bed or double bed mode creates a comfortable environment similar to the "large bedroom". In addition, Huawei’s first star ring scatter sound system, with ambient light linkage, adds unlimited fun to users’ travel.

　　Q Jie New M7 Ultra Cockpit

　　For families seeking a comfortable driving experience, the Wenjie new M7 also performs well. It is equipped with HUAWEI DATSTM 2.0 and front and rear suspended dual FSD variable damping shock absorbers, and the suspension damping system is intelligently variable, providing a stable and comfortable riding experience whether it is pinging stable cornering or bumpy road sections. On the AITO Wenjie new M7 Ultra model, the CDC continuous variable damping shock absorber is also added to realize the intelligent coordination ability of ADS preview and CDC shock absorber automatic adjustment. During driving, the speed bumps on the road can be intelligently identified, and the damping of the shock absorber is pre-adjusted to further reduce the impact feeling and ensure the comfort and safety of the whole family.

　　In addition, the Wenjiexin M7 is equipped with HUAWEI DriveONE extended range electric drive ping platform, and the four-wheel drive version accelerates 4.8s. Under the condition of full oil and full power CLTC, the Wenjiexin M7 has a comprehensive battery life of 1300km and a pure electric battery life of 240km, which not only meets the needs of daily urban commuting, but also can cope with the challenges of weekend camping or long-distance self-driving tours in the suburbs, greatly relieving users’ mileage anxiety.

　　As a national SUV, the Wenjie new M7 brings users an unprecedented excellent travel experience. The launch of the Wenjie new M7 Ultra, on the one hand, provides consumers with more car purchase options, and on the other hand, injects new impetus into the sales growth of the Wenjie M7 – with super product strength, the Wenjie new M7 Ultra is scheduled to break through 12,000 units on the first day of listing, and the delivery of 10,000 units in 18 days on the market, creating a new power model delivery record in China. At the same time, the Wenjie new M7 becomes the first new power model with a delivery volume exceeding 100,000 in 2024.

　　With consumers’ growing demand for new energy vehicles and growing expectations and concerns about the new M7 Ultra, the sales of the M7 are expected to continue to maintain a strong growth momentum, further solidifying its leading position in the sales rankings of new power models in the Chinese market, and providing more consumers with a better, more convenient and safer travel experience.