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21st Century Business Herald reporter reports from Xi'an in the early morning

On August 5, the official WeChat account of Supply and Marketing Co-operative (000564.SZ) released a document on the company's operations in the past 100 days, which revealed many details such as the company's business expansion, direction adjustment, and the leasing and sales of its properties.

Integrating into the supply and marketing system is the first step for the supply and marketing cooperative to "revive".

As early as April 26, the Supply and Marketing Cooperative announced the completion of the election and appointment of directors, supervisors and senior managers, which means that the Supply and Marketing Cooperative has officially joined the supply and marketing system. Almost at the same time, after the 3.28 billion yuan subscription funds were landed, the operating funds of the Supply and Marketing Cooperative were greatly improved.

Then at the end of May, Supply and Marketing Co-operative disclosed the "Reply to the Shenzhen Stock Exchange's 2023 Annual Report Inquiry Letter" and the "Announcement on the Revocation of Other Risk Warnings and Suspension and Resumption of Trading".

It is reported that "business operations have gradually returned to normal", with revenue basically the same as in 2022, operating cash flow up 407.28% year-on-year, and there is no major uncertainty about the ability to continue operations. Since then, the supply and marketing group has officially removed the hat.

With the completion of the restructuring, the new round of business expansion and capital operation direction of Supply and Marketing Cooperatives has gradually emerged.

Two consecutive equity transactions after delisting

Trade and logistics are the main business of Supply and Marketing Co-op. After delisting, Supply and Marketing Co-op's first acquisition focused on its main business.

On July 30, China Supply and Marketing Co-operative announced that its controlling subsidiary Xiangzhong International Logistics Park intends to acquire 60% of the equity of Loudi Xinhezuo Trading and Logistics Co., Ltd. (hereinafter referred to as "Loudi Trading and Logistics") held by Xinhezuo Trading and Chain Group Co., Ltd. (hereinafter referred to as "Xinhezuo Group") for a purchase price of 181 million yuan.

The core asset of Loudi's commercial logistics is Block I, which covers an area of ​​137.5 acres and has a planned above-ground gross floor area of ​​no more than 211,700 square meters.

The Supply and Marketing Cooperative stated that as an important holding subsidiary of the company's commercial real estate sector, the Xiangzhong International Logistics Park plans to build a modern, comprehensive industrial park integrating logistics warehousing, centralized procurement and distribution, and e-commerce industries. The total project area is about 2,500 acres, with a construction area of ​​about 3 million square meters. It is planned to build "nine centers, one community and one square", one of which is a living supporting community (Plot I).

After the equity acquisition is completed, Loudi's commercial logistics will be included in the overall planning of the Hunan Central International Logistics Park, and its core asset Block I will be developed and constructed as a supporting residential area for the park.

The counterparty of this transaction, New Cooperation Group, is a joint actor of Beijing Zhonghe Rural Credit Enterprise Management Consulting Co., Ltd., the controlling shareholder of Supply and Marketing Cooperatives, which constitutes an affiliated relationship. This transaction constitutes a related transaction.

As of the end of the first quarter of 2024, Loudi Trade Logistics had book assets totaling 314 million yuan, liabilities totaling 15.05 million yuan, and net assets of 299 million yuan. In 2023 and the first quarter of 2024, the company did not generate revenue, and its net profits were -0.04 million yuan and -1.2446 million yuan, respectively.

It is worth mentioning that last month, Supply and Marketing Cooperative also disclosed that it would publicly list and transfer all the equity and related debts of its subsidiary Yisheng Daji Investment Development Co., Ltd. (hereinafter referred to as "Yisheng Daji").

The intended transferee of the above transaction is Liaoning Zhonghe Qihang Seafood Industry Development Co., Ltd. (hereinafter referred to as "Liaoning Zhonghe Qihang"). Liaoning Zhonghe Qihang and Zhonghe Rural Credit Cooperative, the controlling shareholder of Supply and Marketing Cooperative, are under the same control.

New business adjustments

At the business level, there have been many new changes and adjustments in the supply and marketing cooperatives.

As a long-established retail enterprise, the Supply and Marketing Cooperative has abundant self-owned properties and sales network resources. It is reported that the company's self-owned properties cover an area of ​​about 1.64 million square meters, and its assets are mainly distributed in 14 provinces and 25 cities, including 11 commercial shopping centers and 77 supermarkets. Among them, the "Shun Kelong" brand has 64 stores and more than 600 franchise stores, in addition to 6 trade and logistics projects.

In its previous financial report, the Supply and Marketing Cooperative proposed that "offline, we will fully tap into the advantages of high-quality assets and business such as centralized procurement and distribution, and online, we will use digital means to empower and upgrade the original traditional business, and promote the deep integration of online and offline."

In traditional supermarket projects, the Supply and Marketing Co., Ltd., Minsheng Department Store, Hanzhong Century Sunshine and other stores have readjusted their positioning and business proportions; the Xiangzhong Logistics Park has made new adjustments to its planning; and Sunac China has developed innovative businesses and upgraded its stores. It is reported that the customer flow and sales of many stores have increased significantly after reopening.

Judging from the current situation, supply and marketing cooperatives are still focusing on e-commerce.

The company said that since joining the supply and marketing system, Daji Digital's e-commerce retail business has achieved breakthroughs. Among them, single products such as durian, kiwi fruit, and lychee quickly exploded in sales, with single product orders exceeding 43,000 orders per day and transaction volume exceeding 6 million yuan, ranking first on Douyin's fresh food sales list.

It is worth noting that the Supply and Marketing Cooperatives Cooperatives has proposed that this year it will set up an integrated logistics center that integrates procurement and distribution, processing and packaging, display and trading, cold chain warehousing, less-than-truckload express delivery, live streaming e-commerce, and fourth-party shared logistics, and build a revenue model of "sales destocking + investment promotion and operation + supply chain derivative business" to try to form a new profit growth pole.

At the same time, with the development of Hainan Free Trade Port, the company has leveraged its territorial advantages to effectively integrate and expand its commodity trading business and accelerate the transformation of its trade product structure.

At present, the company's e-commerce channel products are still concentrated in the fresh food category, and there is still room for transformation in product range and trade variety structure.

In terms of real estate, the subsidiary companies have stepped up their efforts in attracting investment and expanding brand resources, adding nearly 45,000 square meters of new rental area, and the overall rental rate of holding properties has reached 78.7%. The key enterprise Wanghai International has accumulated sales of 380 million yuan and accumulated orders of more than 220,000.

Regarding the rumored asset injection of the supply and marketing group, a person from the company told the 21st Century Business Herald reporter: "The asset injection of the supply and marketing group is subject to the announcement, and there is no announcement yet."