Jule Co., Ltd. Eyes Beijing Stock Exchange for Fifth IPO Attempt Amid Ongoing Challenges
Source: DairyNews.today
After four unsuccessful attempts to secure a mainboard IPO, regional dairy producer Jule Co., Ltd. has now set its sights on the Beijing Stock Exchange.
The company, headquartered in Sichuan, recently submitted its IPO application to the Sichuan branch of the China Securities Regulatory Commission (CSRC) on September 24, with guidance fr om CITIC Securities. This marks the start of the counseling phase, as Jule seeks to overcome past challenges and expand its market presence.
Regional Constraints and Slowing Growth
Jule Co., established in 1984, specializes in dairy beverage production and ultra-high-temperature sterilized milk. While the company has maintained a loyal customer base within Sichuan Province, growth rates have slowed significantly since 2021. Annual revenue figures illustrate this trend, with growth dropping from 42.93% in 2021 to just 6.17% in 2023. Similarly, net profits attributable to shareholders rose by only 14.33% in 2023, down from 21.58% in 2021.
Jule’s market is concentrated heavily within Sichuan, wh ere over 90% of its revenue is generated, and more than 70% comes specifically from Chengdu. Despite attempts to expand its geographic reach—including the acquisition of Heilongjiang-based Huifeng Dairy in 2020—the company has struggled to achieve significant growth beyond its home region. Huifeng’s revenue has been in decline, further impacting Jule’s overall performance.
Challenges with National Competitiveness and IPO Track Record
Compared to industry giants like Yili, Mengniu, and Bright Dairy, Jule’s market share remains marginal, with figures hovering around 0.3% from 2020 to 2022. Jule’s efforts to diversify through acquisitions, such as that of Huifeng Dairy, have not substantially reduced its regional dependency. Analysts note that a more comprehensive national expansion strategy would be needed to compete on a larger scale, including establishing production facilities across multiple regions.
Jule’s path to public listing has been turbulent. Since 2017, the company has faced four unsuccessful IPO attempts on the Shenzhen Stock Exchange, attributed to issues ranging from undisclosed fund misappropriation and inaccurate financial disclosures to significant internal control deficiencies. These challenges have prompted regulatory warnings, feedback letters, and ultimately, terminations of the company’s IPO applications.
A Shift in Strategy: Can the Beijing Stock Exchange Listing Succeed?
Following its listing on the New Third Board in September 2024, Jule has shifted focus to the Beijing Stock Exchange, seeking a fresh opportunity to go public. The company’s decision to target the Beijing Stock Exchange comes amid ongoing scrutiny and attempts to resolve its operational challenges. By partnering with CITIC Securities, Jule aims to address lingering regulatory concerns and leverage new capital to support its growth.
While the move to the Beijing Stock Exchange may offer Jule a more favorable listing environment, the company’s long-standing issues—such as geographic revenue concentration and inconsistent financial growth—pose persistent hurdles. Jule will need to demonstrate a strong compliance record and a viable expansion plan to attract investor confidence.
In a highly competitive market dominated by larger players, Jule’s success on the Beijing Stock Exchange will likely hinge on its ability to diversify geographically, enhance its production capabilities, and address operational inefficiencies. Only time will tell whether this fifth IPO attempt will mark a turning point for the company, enabling it to secure the capital and market position necessary for long-term sustainability in China’s dairy industry.
Regional Constraints and Slowing Growth
Jule Co., established in 1984, specializes in dairy beverage production and ultra-high-temperature sterilized milk. While the company has maintained a loyal customer base within Sichuan Province, growth rates have slowed significantly since 2021. Annual revenue figures illustrate this trend, with growth dropping from 42.93% in 2021 to just 6.17% in 2023. Similarly, net profits attributable to shareholders rose by only 14.33% in 2023, down from 21.58% in 2021.
Jule’s market is concentrated heavily within Sichuan, wh ere over 90% of its revenue is generated, and more than 70% comes specifically from Chengdu. Despite attempts to expand its geographic reach—including the acquisition of Heilongjiang-based Huifeng Dairy in 2020—the company has struggled to achieve significant growth beyond its home region. Huifeng’s revenue has been in decline, further impacting Jule’s overall performance.
Challenges with National Competitiveness and IPO Track Record
Compared to industry giants like Yili, Mengniu, and Bright Dairy, Jule’s market share remains marginal, with figures hovering around 0.3% from 2020 to 2022. Jule’s efforts to diversify through acquisitions, such as that of Huifeng Dairy, have not substantially reduced its regional dependency. Analysts note that a more comprehensive national expansion strategy would be needed to compete on a larger scale, including establishing production facilities across multiple regions.
Jule’s path to public listing has been turbulent. Since 2017, the company has faced four unsuccessful IPO attempts on the Shenzhen Stock Exchange, attributed to issues ranging from undisclosed fund misappropriation and inaccurate financial disclosures to significant internal control deficiencies. These challenges have prompted regulatory warnings, feedback letters, and ultimately, terminations of the company’s IPO applications.
A Shift in Strategy: Can the Beijing Stock Exchange Listing Succeed?
Following its listing on the New Third Board in September 2024, Jule has shifted focus to the Beijing Stock Exchange, seeking a fresh opportunity to go public. The company’s decision to target the Beijing Stock Exchange comes amid ongoing scrutiny and attempts to resolve its operational challenges. By partnering with CITIC Securities, Jule aims to address lingering regulatory concerns and leverage new capital to support its growth.
While the move to the Beijing Stock Exchange may offer Jule a more favorable listing environment, the company’s long-standing issues—such as geographic revenue concentration and inconsistent financial growth—pose persistent hurdles. Jule will need to demonstrate a strong compliance record and a viable expansion plan to attract investor confidence.
In a highly competitive market dominated by larger players, Jule’s success on the Beijing Stock Exchange will likely hinge on its ability to diversify geographically, enhance its production capabilities, and address operational inefficiencies. Only time will tell whether this fifth IPO attempt will mark a turning point for the company, enabling it to secure the capital and market position necessary for long-term sustainability in China’s dairy industry.
