Jule Co., Ltd., a Sichuan-based dairy producer, targets the Beijing Stock Exchange for its fifth IPO attempt following four failed attempts on the Shenzhen Stock Exchange. The company faces challenges such as regional revenue concentration and slowing growth rates, aiming to overcome these hurdles to expand its market presence.
Jule Co., Ltd., a regional dairy producer headquartered in Sichuan, China, is making its fifth attempt to secure a public listing by applying for an IPO on the Beijing Stock Exchange. After four unsuccessful bids on the Shenzhen Stock Exchange since 2017, the company has submitted its IPO application to the Sichuan branch of the China Securities Regulatory Commission (CSRC) on September 24, 2024, with guidance from CITIC Securities. This new phase marks Jule’s strategic shift as it seeks to overcome previous hurdles and expand its market presence.
Founded in 1984, Jule specializes in producing dairy beverages and ultra-high-temperature sterilized milk. While the company has built a loyal customer base within Sichuan Province, it has experienced significant slowing growth rates in recent years. Annual revenue growth has declined sharply from 42.93% in 2021 to a mere 6.17% in 2023. Likewise, net profits attributable to shareholders increased by only 14.33% in 2023, down from 21.58% in 2021.
Jule’s operations remain heavily concentrated in its home province, where over 90% of its revenue is generated, with more than 70% of sales coming specifically from Chengdu. Despite efforts to diversify geographically, including the acquisition of Heilongjiang-based Huifeng Dairy in 2020, Jule has struggled to achieve significant growth outside its primary market. Revenue from Huifeng has also been in decline, further complicating Jule’s overall performance.
The company faces stiff competition from larger industry players such as Yili, Mengniu, and Bright Dairy, which dominate the national market. Jule’s market share has remained marginal, hovering around 0.3% from 2020 to 2022. Industry analysts emphasize the need for a more comprehensive national expansion strategy that includes establishing production facilities in multiple regions to effectively compete.
Jule’s previous IPO attempts were marked by turbulence, with issues ranging from undisclosed fund misappropriation and inaccurate financial disclosures to significant internal control deficiencies. These challenges led to regulatory warnings and the eventual termination of the company’s IPO applications, further complicating its path to a public listing.
Now, with a recent listing on the New Third Board in September 2024, Jule is redirecting its focus toward the Beijing Stock Exchange, seeking a more favorable environment for its fifth IPO attempt. Partnering with CITIC Securities aims to help the company address its lingering regulatory concerns and attract new capital for growth.
Despite this shift, Jule still faces persistent hurdles, including geographic revenue concentration and inconsistent financial growth. The company must demonstrate a solid compliance record and a viable expansion plan to instill investor confidence in a highly competitive market.
As Jule attempts to navigate these challenges, its success on the Beijing Stock Exchange will likely depend on its ability to diversify operations, enhance production capabilities, and resolve ongoing inefficiencies. Only time will tell if this fifth IPO attempt will mark a pivotal moment for Jule Co., Ltd., enabling it to secure the necessary capital and market position for long-term sustainability in China’s dairy industry.
