Long press the QR code or click "Read Original" to register. 30+ industry experts, 100+ B2B platform founders, 800+ manufacturer and distributor friends, gather in Fuzhou to discuss the internet transformation path of the FMCG industry. On August 25, Sun Yiping (first from right), then president of Mengniu, answered questions at the interim results briefing, while Lu Minfang (second from left), then president of Yashili, listened. After leaving an internal letter titled "May We All Be Blessed with Longevity, Though Far Apart, We Can Still Share the Beauty of the Moon," Sun Yiping bid farewell to Mengniu (02319) on the night of the full moon. Sun, who previously worked at Coca-Cola, was known for her straightforward speech and decisive actions, earning recognition within the industry. However, during her four years at the helm of Mengniu, her performance was not entirely satisfactory, and in the competition with Yili, Mengniu gradually fell behind. How does this leadership change relate to the reshuffle at COFCO? Where will the newly appointed Lu Minfang lead Mengniu? Many questions await answers in the future. Does COFCO's leadership change affect Mengniu? In January this year, at a meeting of COFCO's middle-level and above management, it was announced that Zhao Shuanglian would serve as Chairman and Party Secretary of COFCO Group, and his previous positions at China Grain Reserves Corporation were removed; Ning Gaoning moved to become Chairman and Party Secretary of Sinochem Group. After the personnel adjustment, reform actions followed. On June 13, the State-owned Assets Supervision and Administration Commission disclosed that COFCO had clearly proposed a "slim down and strengthen" plan, based on the principle of "small headquarters, large business," compressing management levels to achieve three-level control. COFCO proposed a three-year plan to reduce the number of legal entities by 20%, reduce losses of loss-making enterprises by more than 50%, and significantly reduce the loss ratio. According to the plan, COFCO identified 65 enterprises for transformation and upgrading, 91 for strengthened management, and 102 for merger, reorganization, and elimination. Subsequently, on July 18, COFCO and China National Cotton Reserves Corporation initiated strategic restructuring, and the reform pilot plan for COFCO as a state-owned capital investment company was announced. Some dairy industry insiders speculate that the leadership change at Mengniu is related to COFCO's leadership change. After Ning Gaoning left, corresponding personnel adjustments were expected, which is not surprising. As for Mengniu's new leader Lu Minfang, Zhitong Finance learned that he had been serving as president of Yashili Group, a subsidiary of Mengniu Dairy. Before joining Yashili, Lu held positions at several multinational companies, including Chairman of Danone Early Life Nutrition (China), and management roles at General Electric and Johnson & Johnson (China). Regarding his new role, Lu Minfang said: "I am very grateful for the trust of COFCO, all shareholders, the board, and my colleagues at Mengniu. Mengniu is a leading enterprise in China's dairy industry. I look forward to working with the strong Mengniu team to comprehensively improve operational efficiency, further strengthen the channel and marketing system, and realize Mengniu's dream of becoming a century-old nutrition and health food company." Benchmarked against Yili, is Mengniu at a clear disadvantage? The long-standing rivalry between Mengniu and Yili has been a major highlight in the dairy industry. From the 2016 interim reports of the two companies, Yili's advantage is evident. For Mengniu, according to the 2016 interim report, revenue in the first half was 27.2572 billion yuan, up 6.6% from 25.564 billion yuan in the first half of 2015. Excluding Yashili, group revenue increased 7.0% to 26.1047 billion yuan. Profit attributable to owners of the company decreased 19.5% year-on-year to 1.0773 billion yuan. Mengniu attributed the profit decline to underperforming associates. The interim report stated that due to a significant decrease in profit from associates from 143.3 million yuan in the same period last year to a loss of 154.6 million yuan this year, and reduced profit from Yashili, the group's EBITDA decreased 6.9% to 2.1551 billion yuan, compared with 2.3156 billion yuan in the same period last year. Yashili, previously led by Lu Minfang, indeed had an impact on Mengniu. In the first half of this year, Yashili achieved revenue of 1.147 billion yuan, down 21.7% year-on-year; net profit was 15.1 million yuan, down 86.2% from 109.3 million yuan in the same period last year. In contrast, Yili's profit improved significantly in the first half of 2016. During the reporting period, Yili achieved total operating revenue of 30.087 billion yuan, flat year-on-year; total profit of 3.807 billion yuan, up 19.41% year-on-year; net profit of 3.211 billion yuan, up 20.63% year-on-year. In terms of market segments, Yili's advantage is clear. According to AC Nielsen data, during the reporting period, Yili's retail value share in the overall domestic dairy market was 20.1%, ranking first. Among them, its retail value share in ambient liquid milk was 30.9%, ranking first in the segment. Its retail value share in low-temperature liquid milk was 16.7%, up nearly 1.1 percentage points year-on-year; its all-channel retail value share in infant formula was 4.9%, ranking first among domestic brands. According to industry statistics, Yili's cold beverage sales ranked first nationally during the reporting period. Another key area where Yili leads Mengniu is cash flow. Yili has clearly become asset-light, with bank loans down 5.4 billion yuan, a debt-to-asset ratio of about 40.6%, and net cash of 10 billion yuan. Mengniu's debt-to-asset ratio is 47.8%, with bank loans of 10.2 billion yuan and cash of only 5.2 billion yuan. With ample cash flow, Yili will be more flexible in adjustments. As for the key ROE data, since 2009, Mengniu's ROE has been declining, reaching only 7.9% in 2015, while Yili's average ROE over the past five years was 22.3%, and it is unlikely to decline significantly in 2016. In the interim report, Mengniu stated that the dairy industry faces severe challenges due to the sluggish macro economy, oversupply of raw milk, impact of cross-border e-commerce imports, and stricter government food safety regulations. However, both Mengniu and Yili face factors such as the full implementation of the two-child policy, increasing per capita income, and continued urbanization, which are not necessarily favorable. Concerns such as consumption upgrading and the disappearance of demographic dividends always hang over the dairy industry. Can Mengniu, now under Lu Minfang, turn the tide? Source: Food Capital New Era · New Distribution —— 2016 China "FMCG + Internet" Summit Forum —— This is a grand event focused on how FMCG industry channels will transform under the trend of Internet+ transformation Agenda 09:00-09:30 Registration 09:30-09:35 Opening remarks by host 09:35-10:05 2016 China FMCG Industry Trend Analysis Report - Zhao Bo 10:05-10:25 Transformation Strategy and Path for FMCG Enterprises - Liu Chunxiong 10:25-10:45 Opportunities and Challenges Brought by FMCG Channel Reform - Liu Zhao, CEO of Waiqin365 10:45-11:25 Alibaba Retail Link All-round Empowerment - Guo Kunkun, Alibaba Retail Link 11:25-12:00 Roundtable Forum - Brand Transformation: Improvement vs. Reconstruction? (Guests TBD) 12:00-13:30 Lunch 13:30-14:00 Dealer Transformation: Urban Distribution Trends - Wang Qi, CEO of Weijie City Distribution 14:00-14:30 Roundtable Forum - Why Should Dealers Do Logistics in Transformation? 14:30-15:00 Detailed Explanation of Zhongshang Huimin's "One Machine, Two Wings" Strategy - Su Xiaoxin, Vice President of Zhongshang Huimin 15:00-15:30 Detailed Explanation of Zhanghe Cloud Factory Strategy - Yang Lixiang, Zhanghe Tianxia (Content TBD) 15:30-16:00 Supply Chain Finance as a Lubricant for B2B to Drive Traditional Business - Chen Xian, CEO of 51 Order 16:00-16:30 Principles and Thoughts on 2B Investment - Xu Xiaoping, Founder of ZhenFund (Guest TBD) 16:30-17:00 Small Retail, Big Business Opportunities: Transformation and Upgrading of China's Retail - Wang Jianfeng, General Manager of E-commerce Division, Yurun Group 17:00-17:30 Roundtable Forum - Who is the King in FMCG B2B Models? (Guests TBD) 18:00-20:00 Dinner For manufacturers and distributors who want to transform, this event is not to be missed. Interested friends can long press the QR code below or click "Read Original" to register. Registration: Long press the QR code below or click "Read Original" ↓↓↓ Click "Read Original" [Register]