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2022-9-02Portfolio

China’s Leading Food Packaging Solutions Provider Xinjufeng lists on ChiNext

BEIJING, September 2, 2022 - Hosen Capital’s portfolio company Shandong Xinjufeng Technology Packaging Co. Ltd. (“XinJuFeng”, 301296. SZ), China’s leading supplier of aseptic food packaging materials, has officially completed its initial public offering process on the Shenzhen Stock Exchange ChiNext market. XinJuFeng issued 63 million shares priced at RMB18.19 per share, estimated to raise a total of RMB1.146 billion.

Established in 2007, the company has consistently focused on developing, producing, and selling aseptic packaging products. XinJuFeng is one of the few companies in China capable of mass producing aseptic packaging products, and has provided over 50 billion packages in total to customers as of 2021.

Aseptic packages produced by XinJuFeng are widely used by notable dairy and beverage companies in China with a good market reputation. (Picture source: Company official website)

The aseptic packaging industry has a high market concentration rate due to factors such as technological barriers to entry. It is an industry that has been dominated by international hegemons. Imported aseptic packaging products once dominated the Chinese market with more than a 90% market share, making Chinese dairy companies heavily reliant on international packaging brands.

XinJuFeng provides an alternative solution to food and beverage companies in China. Mr. Yuan Xunjun, the chairman of XinJuFeng, expressed that through 15 years of hard work, XinJuFeng has become the leading provider of aseptic packaging products in China. The company has consistently focused on developing and producing aseptic packages and has achieved breakthroughs in key areas such as materials, technology, and production techniques. XinJuFeng is gradually increasing its market share and will continue to improve its technologies to develop new products.

Competing with international companies, domestic aseptic packaging product producers in China are utilizing their localization and cost advantages to increase their market shares. Domestic companies such as XinJuFeng are becoming more competitive: In 2020, there were only four producers that achieved annual sales of more than 5 billion packages in China, among which XinJuFeng was the sole Chinese company.

The company has experienced rapid growth along with significant results in the past three years. From 2019 to 2021, the company increased its revenue from RMB935 million to RMB1,242 million, with an increase in net profit from RMB116 million to RMB157 million. These outstanding numbers reveal the industry leader's strong potential for future growth.

Utilizing technological developments, XinJuFeng continues to profit from high market potential. Aseptic packaging products are high-technology liquid packaging solutions. The company has continuously invested in technological developments and has achieved significant results in materials, technology, and production techniques. XinJuFeng has more than 28 core technologies and 18 patents to serve as a domestic alternative for aseptic packaging products.

Benefiting from dairy and non-carbonated beverage products, aseptic packages have a market potential of selling over 1 trillion packages with an annual growth rate exceeding 10%. Through a spirit of positive business cooperation, XinJuFeng had as of 2021 gained 147 global companies as customers.

As a private equity firm focusing on buyout and growth opportunities in the food and consumer sectors, Hosen Capital invested in XinJuFeng in 2019 based on a wide-reaching network and an insightful set of sector maps. Since then, Hosen Capital has supported the company to strengthen its customer base, expand its product matrix, and has consistently partnered with the company on its journey of going public. 

Hosen Capital has always believed in the company’s long-term growth momentum and will continue to assist the company in achieving ground-breaking milestones and sustainable growth in the future.