I never thought that after Ali Meituan, the next anti-monopoly investigation will not be an Internet giant, but a socket leader! As soon as the news came out, Bull’s 6 billion market value evaporated in seconds, and even dropped to the limit. Just now, with Bull’s latest response, the “mysterious agreement” involving Bull Group or monopoly finally surfaced!

One, the bull myth: 100 billion in 11 days!

When Luo Yonghao, who went bankrupt after only 6 years of making mobile phones, boasted of being a craftsman countless times, Ruan Liping, the founder of Bull, who did not allow employees to mention the “craftsman spirit”, continued the glory of Bull for 25 years. This world is really ironic!

①Fishing village school master!

In 1964, Ruan Liping was born in Cixi, Zhejiang. The most memorable time for Ruan Liping was the carefree time he spent fishing with his father when he was a child. It should be like most people, go to school and work, and live an ordinary life.

In 1974, “The Age of Fire” was released. This film adapted from the famous book “Steel Torrent” deeply touched Ruan Liping’s heart. He was inspired by the plot of hard work and technological breakthrough in the film, and determined to become an engineer.

Eight years later, 18-year-old Ruan Liping was admitted to Wuhan University of Water Conservancy and Electric Power (today’s Department of Engineering of Wuhan University) with honors. After graduation, he was assigned to work in Hangzhou Hydropower Machinery Factory. Ruan Liping’s engineer dream came true.

In 1986, the spring breeze of reform and opening up had swept across the land of China, and the spark of the market economy had already started a prairie prairie. In addition to working in the machinery factory, Ruan Liping also started some small business attempts, such as pig liver, blueberry, peach tree. Sell ​​everything.

②Socket enlightenment!

At that time, Ruan Liping’s hometown, Cixi, had become a famous socket production base in the country. There were hundreds of family workshops producing sockets alone. Many of Ruan Liping’s relatives and friends were also running socket workshops or small factories. Ruan Liping, who worked in Hangzhou, started part-time work. Selling sockets, riding a bicycle through the streets and alleys of Hangzhou in his spare time, selling along the way.

Due to the lack of quality assurance of many sockets at that time, “10 of the 30 sockets are bad”, often there will be power outages or heat, and even smoke and fire… In the face of these safety hazards, Ruan, who understands technology In the beginning, Liping acted as both pre-sale and after-sale, repairing the faulty ones for free and selling them again. It was this special experience that gave him a comprehensive understanding of the structure and manufacturing methods of sockets. Later, he had an epiphany. The products made by others were so shoddy, and the quality of my own repairs was better than theirs. Why not start my own business? Go it alone?

③ Create a cow!

In 1995, 31-year-old Ruan Liping resigned and went to the sea. After collecting 20,000 yuan, he founded Cixi Bull Electric with his younger brother Ruan Xueping.

At the beginning of its establishment, Ruan Liping set up a slogan of “quality-based enterprise”, and Bull’s goal is to produce the best quality products in the country and even the world.

④The choice of life and death!

However, due to continuous research and development investment and high-cost and high-specification materials, the market price of bulls is more than half higher than that of ordinary sockets, which directly leads to poor sales. In the market environment at that time, consumers would rather risk safety hazards. It is more inclined to choose cheap products, and it takes time for user education and market cultivation.

But the bulls couldn’t wait, the products could not be sold, resulting in a serious backlog of inventory. At the most difficult time, Ruan Liping couldn’t even pay out more than 2,000 water and electricity bills. There was only one choice in front of the Ruan Liping brothers, or to lower the quality standard. price war. Either continue to be cold and wait for the business to close.

But the persistent Ruan Liping could not tolerate any reduction in product quality, so he began to take the initiative to attack customers, trying to weave a huge marketing network.

⑤ Turn the corner!

On the one hand, Ruan Liping activated the dealers, let the dealers actively serve the sales terminals, and delivered the goods from the warehouse to each store in the jurisdiction as soon as possible. On the one hand, it cooperates with hardware and building materials stores such as terminal stores, and the Bulls directly design and produce store signs for the stores. On the one hand, professionals are dispatched to carry out carpet visits and investigations on market conditions, industry conditions, customer needs and product improvements. Once problems are found, they will be quickly solved and fed back to market needs.

Through these three-step parallel strategies, under the premise of consistent product quality, a large-scale and efficient marketing network was formally established. The sales of Bull’s products increased rapidly, and Bull’s company also came back to life. The stone hanging in Ruan Liping’s heart, finally fell to the ground.

In 1997, Bull, which insisted on not fighting price wars, took the lead in the whole industry, was the first to obtain the National Great Wall certification, and became the main drafter and maker of the socket converter international GB2099.3-1997.

⑥ US orders!

In 1998, an American company knocked on the door of Ruan Liping’s office. The other party was sincere and came to visit with a large order of 400,000 yuan, but only made one request. He hoped that Bull Electric could produce and supply 15,000 products that meet the requirements. Their quality standard sockets.

There has never been a favor for no reason. It turned out that before looking for Ruan Liping, this American company searched almost all the manufacturers on the market, but none of them could meet their standards, and finally found a bull with a high-quality reputation at that time. Appliances, but Americans were still skeptical about the Bulls’ ability to take the order.

After Ruan Liping took the order, he locked himself at home for half a month, revising the design drawings day and night, and then proofing with the workshop workers. Three weeks later, the samples handed in made the Americans impressed. Later, the Americans added A huge order of 200,000 sockets was placed.

This battle made the Bulls famous and caused quite a stir in the entire Cixi. Not long ago, the Bulls Electric, which almost went bankrupt due to a cash flow failure, had already thrown its peers out of the way.

In 2001, Bull’s market share in China has risen to the first place in the country, firmly sitting on the top of the industry. Ruan Liping is also famous in the industry. After completing the delivery of large orders from American companies, Ruan Liping is no longer satisfied with the domestic market. Outbound layout.

⑦Failure to go to sea!

In 2000, Ruan Liping officially expanded overseas. Unexpectedly, Bull’s products sold to Europe and the United States were frequently returned, and some even faced lawsuits and claims due to quality problems. Within two years, Bull Electric was fined tens of millions of yuan.

The bull, which is based on quality, almost capsized because of the quality. Where is the problem?

After re-examination, Ruan Liping found that the quality standards in the European and American markets were much higher than those in China at that time. Ruan Liping’s 600,000-built laboratory was simply worthless in front of the equipment that international giants such as Siemens and Philips cost tens of thousands of dollars. carry.

⑧ The more frustrated the more courageous!

In 2003, Ruan Liping spent tens of millions of dollars to build the first high-standard testing center in China, and finally became a high-standard laboratory certified by the UL international professional organization in the United States. It can also be recognized worldwide.

Ruan Liping took advantage of the situation to strike the iron and led Bull to design the world’s first self-locking anti-drop socket, and developed technologies such as triple lightning protection, anti-electromagnetic interference and low resistance and low heat.

⑨ The myth of performance!

In 2008, when the global financial crisis broke out, Bull Electric still maintained an anti-sky growth rate of more than 20% (at that time, more than 5,000 Cixi small household appliance enterprises had a sharp drop in export orders, and more than 40% of the enterprises were closed. Wal-Mart in the United States, The bulls were sold out of stock for a time, which is a sign of establishing a firm foothold for the bulls in the overseas market.

On February 6, 2020, Bull Group went public. After only 9 trading days (11 days), the market value of Bull Group exceeded RMB 100 billion from around RMB 50 billion in one fell swoop. Since listing for more than a year, the stock price of Bull Group has risen from the issue price. Nearly 3.5 times, the market value increased by nearly 80 billion.

In 2020, the Bull Group’s revenue was 10.051 billion yuan and the net profit was 2.323 billion yuan, a year-on-year increase of 0.42%. In the first quarter of 2021, the Bull Group’s revenue was 2.575 billion yuan and the net profit was 607 million yuan, a year-on-year increase. 256.17%.

As of the close of trading on May 12, the total market value of Bull Group was 114.4 billion yuan, and it was the leader of 100 billion sockets, dwarfing the crowd.

The legendary Ruan Liping created the myth of the bull, but it just looks perfect, especially since it started in 2001, it has been the first in market share for 20 years, and it also laid a foreshadowing for the bull to involve monopoly.

Second, the mysterious “monopoly agreement” leads to the biggest crisis for the bulls!

On May 13, 2021, the Bull Group made an emergency announcement that the Zhejiang Provincial Administration for Market Regulation decided to conduct an anti-monopoly investigation against the Bull Group, on the grounds that the Bull Group Co., Ltd. was involved in reaching and implementing a monopoly agreement with its counterparty.

After Ali Meituan, the socket leader Bull was under antitrust investigation

The suspected behavior of reaching and implementing a monopoly agreement with the counterparty of the transaction is not very easy to understand literally, but it is simplified into intensive related transactions, and netizens may be more familiar with it.

According to China Fund News, during the period from 2016 to the first half of 2019, in order to reduce related transactions, Bull Group launched a series of acquisitions, first acquiring 100% equity of Xingluo Trading and Qiumei Trading, and then acquiring related parties. The company’s three companies, Benlei Electric, Chaorun Electric and Chaocheng Electric, have some production equipment. The total amount is 34.2 million yuan.

According to Tianyancha, the companies acquired by Ruan Liping’s Bulls are all controlled by the Ruan family. The actual controllers of Xingluo Trading are Ruan Liping and Ruan Xueping, Pan Minfeng (Ruan Liping’s wife and brother) and Yu Lan (the daughter of Ruan Liping’s sister). ) as a nominee shareholder.

The actual controllers of Qiumei Trade are still Ruan Liping and Ruan Xueping, with Xu Yirong (Pan Minfeng’s spouse) and Cai Mengshu (the daughter of Ruan Liping’s wife and sister) as nominal shareholders, while Benlei Electric and Chaorun Electric are also controlled by Ruan Liping’s sister.

In other words, Ruan Liping took over several of his family’s companies, which objectively increased the market share of the Bull Group, and the counterparties in these transactions were all family members who had direct interests in Ruan Liping, and Bull Electric was originally Ruan Liping. A word of brotherhood.

Before 2017, the two brothers held a total of 100% of the shares. Before 2020, the two brothers still held more than 96% of the shares. At the end of the first quarter of 2021, after the introduction of some large current shareholders (such as Hillhouse Capital), Ruan Liping became peaceful. Ruan Xueping’s voting power has only dropped to about 86%, but he is still the actual controller of the company.

After Ali Meituan, the socket leader Bull was under antitrust investigation

After Ali Meituan, the socket leader Bull was under antitrust investigation

Bull Niu was filed this time for being suspected of reaching and implementing a monopoly agreement. As early as November 2019, the Municipal Supervision Bureau filed an investigation for the suspected implementation of a monopoly agreement by Yangzijiang Pharmaceutical Group. On April 15, 2021, the results of the investigation were released. Anti-monopoly Law, impose a fine of 3% of its 2018 sales of 25.467 billion yuan, totaling 764 million yuan.

Assuming that Bull’s anti-monopoly is confirmed by the Municipal Supervision Bureau, then based on 3% of its 2020 sales of 10.051 billion, Bull will eventually have to pay a fine of about 300 million. This is also a huge sum of money, so it is impossible for the bulls not to worry, and because they are being investigated, the bad news released has also caused the stock market to level up.

This is also the reason why thousands of shareholders are frying.

When the bull stock market was at its peak, it reached a high of 150 billion in market value, and then fell back and stabilized at the edge of 110 billion for a long time. This time, it was investigated and directly shrunk by 6 billion, which is really rare. The market value and stock price have always been the confidence of the market. The barometer, although there is currently no product quality problem in Bull, the intensive connected transactions and industry-leading market position have indeed caused a dimensionality reduction blow to the rest of the industry, especially Chinese enterprises, which has violated the principle of fair trade. , Bulls do not escape the suspicion of monopoly.

In addition to the monopoly involved, the private management of the family is also the biggest obstacle for the bulls to move towards the goal of becoming a large international company. In addition, the frequent cash outs of the Nguyen family and the single product structure of the bulls together constitute the biggest dilemma for the bulls at present.

According to the Bull’s prospectus, in 2015, 2016 and 2017 before the Bull’s IPO, huge cash dividends were distributed, and the cumulative amount of dividends in three years reached an astonishing 3.34 billion yuan. In the previous article, we analyzed Ruan’s The absolute controlling rights of the brothers, the 3.3 billion, basically fell into the pockets of these two people. In addition, in December 2017, the Ruan brothers transferred about 4.12% of the company’s shares to seven tradable shareholders including Hillhouse, and the two Ruan brothers cashed out a total of more than 4.5 billion yuan.

As of December 31, 2018, Bull Group’s cash and cash equivalent balance was only 218 million yuan, and Bull’s book cash flow had been emptied!

On the one hand, it is safe to pay large dividends, and on the other hand, the IPO raised 4.887 billion yuan to cooperate with the operation of the company, and the dividends and financing are both correct. This has already reflected a major drawback of the Bulls. In a family business, the private management model not only allows the actual controller to arbitrarily decide the distribution of profits, but also affects the development strategy of the enterprise. As we saw earlier, the cash has been divided up. How can the money and resources invested in R&D and innovation be guaranteed?

Looking at the product structure, Bull’s main products mainly include converters, wall switches and sockets, LED lighting and digital accessories. Throughout 2016 to 2018, the gross profit margin of main products continued to decline. It has exceeded 66% of the market share, approaching the ceiling, and the incremental space is already limited.

In addition, due to the limitations of application scenarios, products such as sockets and LED lighting determine that their sales will be heavily dependent on cyclical variables in the home appliance and real estate industries. The current strict supervision background and the general situation of housing and housing are not speculated. Next, how long can the performance of the Bull Group continue to grow?

In the LED lighting industry, there are already a number of leading companies such as NVC Lighting. How much share can the bulls who have entered the game too late still eat? And digital accessories are even more bloody. Some technology companies have made more competitive customized accessories by themselves. As a bull without first-hand user data feedback of technology products (mobile phones, etc.), why are they emerging in the digital accessories market? storm?

After analyzing this, it is not difficult to find that there are hidden worries under the bull’s halo!

Three, the blindfolded bull running wild, can there be any opponents?

When Wang Xing sighed, Ma Yun and Liu Qiangdong both thought they were each other’s biggest rivals at the beginning. Unexpectedly, Pinduoduo, who was stabbed in the end, was “killed under the horse”, let alone ten years in Hedong and ten years in Hexi. The ever-changing technology Internet ecosystem may change dramatically in three years.

Wang Xing’s foresight was Ruan Liping’s near-term concern. Ruan Liping felt the threat of outsiders for the first time in 2015. On April 8, 2015, Xiaomi released a smart socket with USB interface function, which can not only meet the needs of home use The strong electricity demand of electrical appliances can also directly charge smartphones without a charging head, which is very suitable for the market demand. Coupled with Xiaomi’s strong Internet marketing capabilities, this model is pure white, beautiful in appearance, and priced at only 49 yuan. 247,000 of the products were sold on the first day on the market, and 1 million were sold three months later.

The sense of crisis came to him. Ruan Liping held a high-level meeting overnight. The theme was that the bulls should embrace a more digital and intelligent era. Translated into the vernacular, how could Xiaomi steal the cake? Make it for me!

Soon the Bull Xiaobai USB socket came out, and it was priced at 48 yuan. Bull’s explosive response once set off a heated discussion in the industry. At the same time, it carried out product innovation and released new products in succession. Today, Bull has more than 20 USB sockets on sale. It defeated Xiaomi by an absolute advantage.

Moreover, after avoiding the price war, the price of the Bull USB series has gradually increased, while the same category of Xiaomi has continued to decline. It is no longer controversial.

In addition, Bull’s main digital accessories track also highly overlaps with Xiaomi. In the future, the possibility of short-handedness cannot be ruled out. Although Xiaomi is at a lower peak in the socket, whether Bull can compete with the other digital products remains to be tested by the market.

The potential opponent of the bull is Huawei, which has released a whole-house smart solution. Xiaomi and Huawei are both key variables that determine whether the Bulls can continue the industry’s right to speak in the next decade.

How long can the myth of the bull be written? Wait and see.

Epilogue: Bull’s Achilles Heel!

In the past 25 years, the bull has grown from a small workshop in Cixi to a leader of hundreds of billions of sockets, and Ruan Liping has also become a low-key super rich man. One person succeeds, chickens and dogs ascend to heaven, and the entire Ruan family is full of fame and fortune. This is indeed a rare event in Chinese business history. We have seen stories of civilian counterattacks, but we have also seen the undercurrents behind the bulls that are about to touch the ceiling of the industry.

It is the nature of businessmen to pursue profits, and there is nothing wrong with enterprises pursuing profit maximization, but the more giants in the industry, the more they must have a sense of social responsibility. Legal operation is only the bottom line, and enterprises that already have a de facto dominant position in the industry need to consider more than Eating alone is not about squeezing the living space of small and medium-sized enterprises, but about how to continue to lead industry innovation and compete with world-class giants. Let the whole industry develop soundly and sustainably.

Otherwise, the anti-monopoly hammer will come sooner or later!