Recently, the news of "Ma Yun raising cows" has caused considerable waves in the dairy industry and even the business community. According to corporate announcements, the Yunfeng Fund and the CITIC Industrial Investment Fund (hereinafter referred to as "investors") jointly initiated by Ma Yun will participate in the investment in Yili subsidiary animal husbandry companies, and investors will receive the animal husbandry for a total of not less than 2 billion yuan 60% of the company's equity, Yili holds 40% of the stock company after the capital increase.
It is understood that this is the largest investment by the "layman" in the dairy industry in recent years. Industry experts said that the signal revealed by this investment may be the beginning of a change in China's dairy industry.
Why is the dairy industry? Capital preservation + profit expected
Analysts in the industry analyzed that investors are optimistic about the dairy industry for two reasons: one is to allow money to maintain value, and the other is to allow money to increase value.
Song Liang, a senior dairy analyst at the China Business Circulation Productivity Promotion Center, believes that from the general environment, the downward pressure on the domestic economy is increasing and the investment environment is not ideal, and the strong ability of agriculture and animal husbandry to resist economic cycle risks is the most ideal capital. haven".
In addition, investment should avoid policy risks and market risks, but the current policy risk of the dairy industry is almost zero. In recent years, the country has continuously introduced policies to encourage and support the development of the dairy industry, with clear policy directions. Since the beginning of last year, it has successively issued a series of "most historical" policy support to the dairy industry. It is expected that the future policy support will only increase.
From the perspective of the industry, the shortage of milk sources in the past two years has increased the contradiction between supply and demand, making the dairy industry look "profitable." Dairy expert Wang Dingmian said that with the withdrawal of a large number of retail investors, domestic milk production has dropped by about 2 million tons in the past two years. On the other hand, demand may explode, and domestic dairy demand may double to 70 million tons in the next five years. "Currently there is a gap of 10% to 13% in domestic milk production capacity and demand. In this supply and demand situation, there are no more than two billions."
Unlike COFCO's full takeover of Mengniu, investors this time only focused on Yili's animal husbandry companies rather than Yili's entire industry chain. In the eyes of industry insiders, this move is also to avoid the increasingly fierce competition in the middle and lower reaches of the dairy industry. According to statistics, the number of domestic processing enterprises exceeded 1,000 at most, and has now entered the integration stage.
On the contrary, in 2013, driven by the “milk shortage”, the average price of raw milk in our country rose by about 25% to reach a record high of 4.2 yuan / kg, which also allowed many investors to see more profit space for investing in milk sources. Song Liang believes that from the current trend, raw milk prices will remain high for a long time, this good news also attracted investors to start targeting ranch.
Wang Dingmian estimates that the 2 billion yuan invested by the Yunfeng Fund and the CITIC Industry Investment Fund can build 40,000 to 50,000 dairy cattle farms, with an annual milk output of 180,000 tons to 200,000 tons, according to the existing raw milk price With an annual output value of nearly 1 billion yuan, it is expected that the cost can be recovered in 7 to 8 years, which does not include the number of dairy cows increased during the period.
Song Liang pointed out that the previous investment in the dairy industry was mainly concentrated in the middle and lower reaches of the industrial chain, but as the profit space gradually extended upstream, investment began to shift upstream. It is understood that the cooperation between the downstream and upstream of the domestic dairy industry is gradually strengthened. Recently, in addition to Yili Ranch, Huaxia Animal Husbandry in Sanhe, Hebei Province has also received a capital injection of US $ 106 million. In addition, in June, Huishan Dairy Co., Ltd. successively cooperated with Friesland and Mesor Gael, and Shengmu High-tech's listing in Hong Kong, etc., can be seen as a revival of dairy industry investment.
Strong team meets dairy industry development expectations
In the eyes of experts such as Wang Dingmian, they lack technology and money and are a perfect marriage.
For investors, choosing to cooperate with Yili rather than self-built ranch is also an option to avoid weaknesses. Cooperation with Yili, a large dairy company with mature technology and market, is the most stable move.
For Yili, the cooperation eased the pressure on corporate funds. The funds required for the construction of the ranch are huge, and even dairy giants such as Yilimeniu can't afford it. So much so that the "national self-built ranch rate of 70%", the "national level" goal that should be completed in 2011, seems to be an unreachable task so far. So when there is a big man with a lot of money and wants to raise cows, dairy companies who are struggling to find a stable source of milk will definitely welcome it.
It is worth noting that the livestock company used to be a wholly-owned subsidiary of Yili. After the introduction of investors this time, Yili surrendered 60% of its equity. Experts believe that this move also brought Yili back to the most familiar role as a "processor".
Song Liang said that Yili needs more milk sources, but its "standard" is a processing enterprise, so Ma Yun's investment in ranch is in line with Yili's strategic expectations and the industry development situation of the specialization of dairy farming and processing division.
China's dairy industry needs to strengthen the construction of milk source base
According to statistics, China imported 128,000 tons of milk powder in 2008, and imported 850,000 tons last year. It is expected to break one million tons this year, which is equivalent to one-fifth of China's raw milk output. The situation is grim.
In the coming period of time, events such as the gradual reduction of food tariffs, the establishment of a free trade zone, and the imminent expiration of the EU quota system are expected to further increase the pressure on the domestic dairy industry. Wang Dingmian said: "Last year, dozens of liquid milk brands entered the Chinese market. If China does not have more restrictions, it is not surprising that there will be thousands of foreign brands in the domestic market in the future."
In fact, some foreign companies have quietly entered the Chinese milk market. Fonterra has formed a dairy farming center in 5 farms in China. The number of lactating cows has reached 15,000 and the annual output of raw milk is 150 million liters. The goal is to form six farms in China by 2020 to provide 1 billion liters of raw milk to the market.
Facing increasingly severe international challenges, strengthening its own milk source base has become an inevitable choice for local milk companies. And social capital dominates large dairy companies, which has well solved the problem of the dairy industry's previous disconnection of funds and technology.
Song Liang believes that the investor's move is of great benefit to China's dairy industry. On the one hand, it can improve the supporting facilities of the dairy industry and accelerate the modernization of the dairy industry. At the same time, it will also attract more social capital to participate, and allow the dairy industry to raise funds from the capital market, which is conducive to the development and growth of domestic milk sources.
Wei Ronglu, secretary general of the Western Dairy Development Cooperation Association, said that society should take a calm look at this investment behavior. After all, 2 billion yuan is still only a small number for the huge dairy market. "The revitalization of the dairy industry is not a matter for one or two companies, and it requires more participation from all sectors of society and the government." (Source: Boya and News)
