The stock price fell 45% in 7 days. After holding on for a whole year, Pagoda finally collapsed.From Hong Kong stocks to A-shares and then to Hong Kong stocks, they tried their best to get listed, but the finale of "the prince and princess lived happily ever after" did not appear.The shareholders of Pagoda "cryed that fairy tales are all lies." Cutting flesh is painful.However, the most painful time may not have come yet.


The stampede after the ban was lifted

On January 16, 2024, on the first anniversary of the listing of the Hong Kong stock market, Pagoda got an eye-catching candle-a black candle line with a physical length of 30 percentage points.

Subsequently, the stock price fell like a landslide, falling 45% in seven trading days. In the previous year, Pagoda had always been hovering within the range of one yuan below the issue price.

According to the lock-up period regulations of the Hong Kong Stock Exchange, all the shares of the controlling shareholder can be circulated one year after listing. As the founders, Yu Huiyong and Xu Yanlin, there are no restrictions on selling at this time.

In addition, more than 40 shareholders, including Tiantu Xingbei, CICC Haoze, and China Merchants Fund, hold a cumulative 48.37% stake in Pagoda. The total number of banned shares is approximately 764 million shares, and the lock-up deadline is January 15, 2024.

Therefore, Pagoda's collapse is directed at shareholders who have lifted their ban.

In fact, 24.93 million shares were traded on the day the ban was lifted, which was more than three times the average daily trading volume in the past month. This is obviously not the behavior of ordinary investors.

If they fail to run away before then, the participating institutions will be filled with tears. At the close of trading on January 24, Pagoda’s share price was only 3.37 yuan. According to disclosures, the investment costs of institutions that participated before the listing, such as Xingxin Investment, Shenzhen Venture Capital, and Morningside Equity, ranged from 6.26 yuan to 8 yuan.

Pagoda's last financing before its listing was valued at 12 billion yuan, and its current total market value is only 5.3 billion yuan.

Yu Huiyong and Xu Yanlin held a total of 33.78% of the shares when Baiguoyuan was listed. In this "stampede accident", if the seller was not the active seller, the loss would be at least more than 1 billion yuan.

So, guess, did they run away?


New version of "Don't Leave, Fellow Folks"

Just a few days before the ban was lifted, Pagoda announced its strategic development plan for the next ten years at the beginning of this month.The total merchandise transaction volume of the self-built platform business exceeds 100 billion yuan, and the number of stores exceeds 10,000.In this report, Yu Huiyong even proposed the concept of becoming a "global fruit king".

Perhaps it was anticipated that a slogan alone could not appease investors, so Pagoda launched a buyback plan on the eve of the lifting of the ban.On January 11, the company announced that it planned to spend up to 634 million yuan to repurchase no more than 10% of its shares, or 118 million H shares.

These two measures are nothing more than shouting "Fellow folks, don't leave" after feeling the huge pressure to lift the ban. But the situation of fleeing from the secondary market shows that investors neither believe in Yu Huiyong's ambitious goals nor believe that the repurchase plan can provide support for the company. This is such a sad thing. No way, this is not the first time a similar scene has occurred.

As early as 2015, Yu Huiyong made a wish of "ten thousand stores". At that time, he announced that he would expand to 10,000 branches in 2020, with annual sales reaching 40 billion yuan.

In fact, the mid-term report for the first half of 2023 shows that Pagoda has fewer than 6,000 branches and revenue of only 6.294 billion yuan. It's really far from the original painting.

What worries investors even more is that the profit margin of Pagoda, which has been expanding wildly through the franchise model, has always hovered around 3 points, while the profit margin of Hongjiu Fruit in the same track has always remained in double digits.

Both listed on the Hong Kong stock market, Hongjiu Fruit's current price-to-earnings ratio is less than 4 times, while Pagoda's price-to-earnings ratio is still as high as 15 times even after the plunge. It's not that Pagoda can't afford it, but other stocks are more cost-effective.

The "fellows" who have been freed from their shackles, do you think they will continue to run away?


Consumers are also staying away

In fact, losing the trust of investors is not the worst outcome for Pagoda. After all, it is already on the market. The worst case scenario is that it will be repurchased, if Boss Yu believes in himself and is willing to spend real money.

Losing the trust of consumers is the most terrifying thing.

When mentioning Baiguoyuan's fruits, the first impression is often that they are "expensive", but higher prices may not necessarily lead to better quality or service.

In the summer of 2023, a customer used group buying to buy fruit at Baiguoyuan and was told by the clerk that "the watermelon bought at a cheap price is not sweet." This caused a dispute. Netizens were also reminded of the bitter experience of buying fruit and complained one-sidedly.

Afterwards, Pagoda characterized the incident as a "misunderstanding" and stated that it would reserve the right to pursue legal action against any act of impersonation or publishing false information that damages the brand's reputation. The customer in question made it clear that he would not shop in the store again.

Perhaps it is precisely because of Pagoda's attitude in handling problems that similar service "accidents" occur one after another. On the Black Cat Complaint Platform alone, there are more than 2,000 complaints about Pagoda fruit quality and service.

From these complaints, we can clearly feel the changes in Pagoda's service - the "Three No Returns" that originally gained great reputation are now rejected by some franchise stores; refunds after returns are not returned to the payment account by default, but into Pagoda's APP, which is equivalent to forced consumption in disguise. It can be regarded as the consumer version of "Don't run away, fellow villagers."

Pagoda, which has lost the favor of consumers, will undoubtedly become a source of water that will quickly dry up in an involuted market.This situation may be reflected in the upcoming 2023 annual financial report. Therefore, it is natural for investors to choose to sell for hedging before the annual report is released.

If you have to find something good to hear amid all the bad news, it's not impossible - the original plan to buy back 118 million shares for 634 million yuan has passed in just a few days. If it is really implemented,Then, only 364 million yuan is needed, which saves a total cost of 270 million yuan - which is more than the profit in Pagoda's latest financial report.

Just wait and you can save more!