Yunnan Hougu Coffee is mired in debt crisis and its listing plan is stranded.

As the largest coffee enterprise in Yunnan Province, Hougu Coffee fell into the debt crisis again after the dispute over the ownership of investors. The gap between the two is only two years, making Hougu Coffee's listing plan stalled again. Hougu Coffee's dream of sprinting the first share of Chinese coffee had to be extended again.

Prosperity and loneliness always go hand in hand. As the leading enterprise in the coffee industry in Yunnan Province, the debt crisis of Hougu Coffee has poured cold water on the thriving coffee industry. In fact, the crisis of Hougu Coffee today is a weather vane, and the contradictions behind the "Great Leap forward" development of Yunnan coffee in the past few years are being highlighted one by one.

Hougu Coffee is mired in debt crisis

February 9 is ten days away from the 2015 Lunar New year, which is also the busiest coffee harvest season in Yunnan. Hougu Coffee gathered dozens of media from all over the country to hold a special briefing. The theme of the briefing is called "Hougu Coffee facing the debt crisis". Xiong Xiangren, chairman of Hougu Coffee, said frankly: "Bank loans and liabilities total 2 billion yuan."

Zhang Ruijing, legal representative of Hongtian Group, the parent company of Hougu Coffee, said: "since 2010, Hougu Coffee has continued to have some private loans, with loans of 100 to 200 million yuan due every month, requiring enterprises to make a'U-turn'."

This ventilation will confirm the rumors that Hougu Coffee is mired in a debt crisis. In fact, one of the purposes of Hougu Coffee's move is to talk to the bank, hoping to directly extend the current three-to six-month credit product maturity to one or two years.

In the face of the debt crisis, Hougu Coffee has two options: one is to stop raising "U-turn" funds and bear a record of non-performing loans after the loan matures; the other is to continue to raise "U-turn" funds to quench thirst. The two possible consequences are: carrying a record of non-performing loans directly affects the follow-up development of the company; continuing to borrow money "U-turn", so that enterprises can never get out of the quagmire of private lending.

However, Zhang Ruijing said at the briefing on the same day: "We have chosen the former with difficulty and no longer raise'U-turn 'funds."

Behind this difficult choice, how does Hougu Coffee deal with maturing credit? In addition to directly calling on banks to adjust credit policies, Xiong Xiangren also put forward "three tricks and two ways" to rescue real enterprises, including Hougu Coffee: in addition to hoping financial institutions to relax their credit policies to real enterprises, they also hope that the government will coordinate the communication between enterprises and creditors, and hope that judicial organs will file cases cautiously.

It is worth noting, however, that the debt crisis of Hougu Coffee also has after-effects from the equity dispute in June 2012. The result of the equity dispute that year was the withdrawal of PE, but it is understood that Hongtian, the parent company of Hougu Coffee, paid at least 300 million yuan to buy back shares.

At the briefing on the same day, Hougu Coffee admitted that after investors withdrew, Hougu Coffee, which was already cash-strapped, wanted to raise funds to maintain the survival of the enterprise, but also to pay investors' equity transfer price, and corporate loans continued to expand. Although the sales revenue of enterprises reached 1.1 billion yuan in 2013 and 1.5 billion yuan in 2014, due to the unreasonable credit structure, the cost of borrowing money to repay the loan has reached hundreds of millions of yuan.

Contradiction 1

Take too big a step

Although Xiong Xiangren, head of Hougu Coffee, attributed the debt crisis of Hougu Coffee to unreasonable bank credit policies, he also admitted that there were internal reasons for the debt crisis when asked by reporters.

Xiong Xiangren said: "from the internal reasons of the enterprise, the cause of this debt crisis is that we have moved too far, and our biggest problem is that the base has developed too fast, and hundreds of thousands of mu of forest rights have been transferred in a few years. But these bases cannot quickly achieve hematopoiesis, and we should carry out reasonable development according to the sales of the market."

Contradiction 2

The planting area of coffee grows rapidly.

At present, Hougu Coffee already has a coffee base of 270000 mu. At the press conference of the fourth China Mangshi (International) Coffee Culture Festival held not long ago, Li Gongqin, secretary general of Yunnan Coffee Industry Association, revealed: "up to now, Yunnan coffee planting area has exceeded 1.6 million mu, and Yunnan coffee output is expected to exceed 120000 tons this harvest season."

This means that the coffee base of Hougu Coffee accounts for about 17% of the coffee base in Yunnan Province. In fact, in the past few years, not only the back Valley Coffee, but also the whole Yunnan Coffee has achieved rapid growth.

Public data show that the coffee planting area in Yunnan Province has exceeded 1 million mu in 2012, completing the goal of the Yunnan Coffee Industry Development Plan (2010-2020) ahead of schedule. The above plan points out that "around the overall goal of building our province into a world high-quality coffee bean raw material base, the country's largest finishing industry production base and trade center."... By 2015, the coffee planting area of Yunnan Province has increased to 1 million mu, and by 2020, the coffee planting area of the whole province will be stable at about 1.5 million mu. "

Obviously, the coffee planting area in Yunnan Province has actually exceeded the 2020 plan. In 2008, the coffee planting area in Yunnan Province was only 390000 mu, but in the past few years, the coffee planting area has been growing at an annual rate of more than 100000 mu, especially in 2013, the coffee planting area has increased from 1 million mu in 2012 to more than 1.4 million mu in 2013.

Contradiction 3

The pace of marketing and brand promotion is slow.

Behind the "Great Leap forward" development of coffee cultivation, coffee awareness, especially brand awareness in Yunnan Province is not as smooth as expected.

Xiong Xiangren admitted that the development of Hougu Coffee in coffee cultivation in the past few years was irrational. After vigorously developing the planting area, the pace of market promotion and brand promotion was slow, and the growth of sales could not support the growth of bank loans. The company is highly dependent on banks.

The development of Hougu Coffee is the same as that of the whole Yunnan coffee industry-while desperately developing the planting base, ignoring the construction of the market and brand. The debt crisis of Hougu Coffee also makes the contradiction of the whole coffee industry in Yunnan more prominent.

Not only Hougu Coffee, but Lingfeng Coffee, a new coffee grower in recent years, is also facing huge debt pressure because of the vigorous development of planting in the early stage.

Because of the debt, Hougu Coffee is likely to slow the construction of instant coffee production line, and the arrival of the new harvest season may also affect the 300000 farmers associated with Hougu Coffee.

Although admitting that the debt crisis is due to the rapid expansion of planting, Xiong Xiangren still believes that there is nothing wrong with the growth of coffee acreage in Yunnan, and his reason is that compared with the world, Yunnan's coffee area is still too small.

However, in the view of many people in the industry, affected by the debt crisis, the development of Hougu coffee will slow down for a period of time in the future, and the whole coffee industry in Yunnan may also slow down.