“We hope to further promote the coordinated development of ORG and China Resources’ industries through bilateral strategic cooperation. At the same time, with the advantages of China Resources Capital in the capital market, we can become the starting point for ORG’s future capital operation and business development.”
Talking about the reason for investing in ORG, Qin Feng, General Manager of China Resources Capital, said in an exclusive interview with 21st Century Business Herald.
According to the third quarterly report disclosed by ORG on November 1, Zhuhai Runge Evergreen Equity Investment Fund Partnership (limited partnership) (hereinafter referred to as “Zhuhai Runge”) has newly become the second largest shareholder of ORG.
According to our reporter, ORG is the largest enterprise in the field of metal packaging in China. Although it is an indispensable link in the large consumption industrial chain, few TOB enterprises are shortlisted according to the previous industrial layout of China Resources.
The shareholders of Zhuhai Runge are China Resources Capital and GREE Financial Investment.
On October 21, ORG announced the by election of Qin Feng, Director and General Manager of China Resources Capital Management Co., Ltd., as a director of the listed company.
At that time, it was speculated in the market that China Resources Capital might have taken a strategic stake in the third quarter, but most of them still had doubts about the reasons for China Resources Capital’s stake.
Recently, the 21st Century Business Herald reporter interviewed Qin Feng, General Manager of China Resources Capital, and Zhou Yunjie, Chairman of ORG, to explore the story behind the strategic cooperation between the two sides.
China Resources Capital consumes the first TOB layout
For the capital market, China Resources is a strong state-owned asset background and ORG’s unique industrial endowment, which makes the market have a lot of conjectures about this.
One is the leading enterprise in the field of large domestic consumption, and the other is the leading enterprise in the field of packaging and can making. The business of the two sides is closely related.
Also in this context, although the market has expectations for China Resources Capital, on November 1, the first day of ORG’s third quarterly report, the share price still rose immediately.
Figure: Qin Feng, General Manager of China Resources Capital
“In the consumer goods sector, there are many consumption points downstream of ORG. We all have more in-depth ideas, such as incubating more new products through the channels of China Resources and making some new products in line with the current consumption upgrading in brand cultivation.” Qin Feng said.
Figure: Zhou Yunjie, Chairman of ORG
“The cooperation with China resources capital is an extension of the idea that we continue to develop and deepen ORG as a traditional Chinese basic packaging enterprise and explore how to do the market in the future, starting from the concepts of big consumption, national tide and great health.” Zhou Yunjie, Chairman of ORG, told the 21st Century Business Herald.
ORG’s main products are metal packaging products and services, providing customers with innovative services such as three-piece can, two-piece can metal packaging and internet intelligent packaging to meet product needs, and providing customers with integrated filling OEM services.
According to Zhou Yunjie, “ORG has the most complete products and product lines in the whole basic packaging market, especially in the large packaging market. At present, we have basically covered all products except paper and glass bottles through ORG and COFCO packaging and Huangshan Yongxin, which are held by ORG.”
Some brands including red bull, Feihe, War Horse, Jianlibao, Amway, Budweiser, Tsingtao Beer, Snowflake Beer, JDB, Coca Cola, Pepsi Cola and Yuanqi Senlin are customers of ORG.
Qin Feng said, “During the development strategy formulation process of the 14th five year plan, China Resources Group gave China Resources Capital the only fund management platform for the group’s future innovation incubation and discovery business. Therefore, China Resources Capital undertakes the important responsibility of China Resources Group in the incubation of new product innovation. In this regard, China Resources and ORG can be empowered in both directions. For example, ORG has more experience in the operation and incubation of some brands than we do.”
From the historical evolution of bilateral cooperation, ORG is also the main supplier of Snowflake Beer under China Resources. However, the previous layout of China Resources Capital in the large consumption sector was mainly dominated by TOC end enterprises, which is also the main reason why the market pays attention to this cooperation.
Qin Feng said that ORG is the only TOB-end enterprise of China Resources Capital in the large consumption track segment industry.
He also said that ORG is a platform type enterprise that China Resources Capital will focus on in the field of food and beverage industry in the future.
What do platform enterprises do?
Before China Resources became a shareholder, ORG had completed the “integrated beverage OEM capacity and supply chain system” based on the business of “packaging + filling integrated solution”. Does the platform business mean that the two sides will cooperate to develop more TOC products?
“5G + 5G”, how to synergistically empower?
“China Resources has obvious channel advantages, but the category of our brand is still very limited in the whole large consumption sector. Whether it is beer or mineral water, it is a leader in its own field, but it is still a small part of all consumer goods brands.” Qin Feng, Director and General Manager of China Resources Capital Management Co., Ltd., told the 21st Century Business Herald, “At the same time, we also actively cooperate with the resources of Runge fund shareholder GREE Group in Zhuhai to provide convenience and support for the industrial layout of ORG and its upstream and downstream industrial chain in Zhuhai.”
“So we emphasize combining our own advantages in the process of discussing cooperation.”
This is also the implementation of China Resources Capital’s investment concept of “5G” + “5G”.
“5G” here is not “5G” in the communication field. In China Resources Capital Circle, G is good.
According to the 21st Century Business Herald reporter, the first “5G” refers to good products, good technology, good mode, good service and good market; the second “5G” refers to good channels, good scenes, good resources, good brands and good management.
“That is to say, the criteria for selecting projects should match the capabilities of China Resources. For example, a good product must be combined with the good channels of China Resources; a good company must be combined with the good management mode that China resources can output; and a good market must be empowered with the brand of China Resources,” Qin Feng said.
Perhaps it is based on this logic that ORG, as an investment project, can be used as a case to interpret “two-way empowerment”.
For this, Zhou Yunjie mentioned a change in the market background.
“With the changes in the market in the past two years and the rise of the concept of big consumption, especially the gradual deepening of the Internet concept in the whole big consumption industry, great changes have taken place in all links of product design and production. This also puts forward new requirements for the packaging industry, which requires more packaging enterprises to join the production and logistics cycle of the whole industrial chain.” Zhou Yunjie, Chairman of ORG, told the 21st Century Business Herald.
Qin Feng revealed a series of specific ideas for cooperation with org in an interview with reporters. “Many strategies are also closely related to our 14th five year development strategy.”
“For example, there are many foreign monopolies in the packaging industry, such as some packaging of drugs. The field of drug health is a very important domestic market. If the market space is huge, it is necessary to find a suitable partner with the same concept to develop in this market together,” Qin Feng said.
The layout of China Resources in the pharmaceutical industry also includes head brands such as Sanjiu, Shuanghe, Jiangzhong, Zizhu and Dong’e.
In this new industry context, the imagination of ORG and China resources capital may not be limited to the track of FMCG Brand incubation.
“We believe that the addition of China resources capital will greatly enhance our imagination and expansion space in the field of industrial development,” Zhou Yunjie said.
“The investment of China Resources Capital must be realistic. It should really help the development of industry, enable the effective combination of industry and finance, and become a model for the investment of central enterprises in the field of combination of industry and finance.” Qin Feng said.
Zhou Yunjie and Qin Feng both revealed more diversified cooperation directions in the future.
“On the other hand, we can combine the strength of China Resources Capital and the experience and influence of China Resources Capital in the market to enrich the further expansion of ORG in investment and capitalization in the future,” Zhou Yunjie pointed out.
China Resources Capital is a leading investment platform in China. “Capital empowerment will also be an important direction of our cooperation with ORG”, according to Qin Feng.
Zhou Yunjie pointed out, “ORG is a traditional industry and has little experience under capital, especially in the field of investment. Therefore, it needs the strong support of partners, which is also an important reason why ORG can come together with China resources capital this time.”
Big consumption, healthy China and national tide
According to the reporter, China Resources Capital has a team of more than 200 people, distributed in Shenzhen, Hong Kong, Beijing and Shanghai. Shenzhen and Hong Kong are domestic and overseas headquarters respectively. The establishment of Industrial Development Fund and the deep integration of industry and finance is an important means for the industrial layout of China Resources Capital.
According to Qin Feng, China Resources Capital currently has 115 billion funds under management.
Neither side disclosed the specific direction of further cooperation at the capital level, but from the perspective of the track, the two sides have a consensus on some industrial directions.
These include the “medicine and food homology” series of plant functional drinks launched by ORG in cooperation with the state-owned assets platform of Yunnan Province, including the hemp kernel walnut dew of the typical Yuanyangwuyu series. In addition, they also include magic pot lunch meat, fruit time can, bowl pot ready to eat nutrition, etc. These products all need the help of advantageous channels.
“Medicine and food are of the same origin” is a hot concept of “healthy China” track, and it is also an important direction of new national track.
According to Qin Feng, China Resources Capital also attaches great importance to the development of products related to “medicine and food are of the same origin”. “In the later stage, it will also promote the combination with China Resources channels, and the two sides will empower each other in the big health and big consumption track.”
According to the 21st Century Business Herald, now the rise of domestic goods, the concept of national tide is hot, and the layout of China Resources Capital around national tide is also unfolding.
On September 26 this year, peak sports, a sports brand, obtained joint strategic investment from several funds, investment platforms and many well-known institutions under China Resources Capital, with a total financing of nearly 1.5 billion yuan.
“From the perspective of Chinese brand development, we pay special attention to the development of Chinese brands. China’s development to today’s international industrial status, the strength of Chinese brands should match the strength of the national system. In the past few decades, foreign brands have occupied a relatively large market in China. From the current consumption trend, Chinese brands are gradually improving in terms of operation and management ability, product quality and internationalization.” Qin Feng said.
“In China Resources’ capital scale of 100 billion, the first sector is consumer goods, which is an important investment plate of China Resources; the second sector is big health, consumer goods and big health have many intersections, and these two sectors are also the field of people’s livelihood; the third sector is urban construction and operation; the other two sectors are energy and scientific and technological innovation.” Qin Feng said.
“In fact, in the investment layout, we pay more attention to the ability of China’s consumer market. This is also closely related to the enterprise gene of China Resources. China Resources is an enterprise related to people’s livelihood. Combined with people’s livelihood enterprises, our investment focus will be subdivided into healthy China and consumption China.” Qin Feng told the 21st Century Business Herald.
Qin Feng also highlighted investment in sports.
“Sports is a very important project. China Resources has a consumer goods brand of China Resources in the sponsorship of the whole sports events in the past few years. Focusing on sports consumption is also an important project for China Resources to increase investment in healthy China in the future.” Qin Feng said.
Sports is also an opportunity for cooperation between China Resources Capital and ORG. Qin Feng mentioned that “sports is an important opportunity for China Resources Capital to associate with ORG, and ORG’s football and ice hockey industries are of particular importance to us.”
With the upcoming Beijing Winter Olympic Games, sports is also quietly hot in the capital market.
21st Century Business Herald reporter Jiang Shiqiang from Beijing
