Core Viewpoint - The article discusses the rise and fall of Hong Jiu Fruit, highlighting the lessons that can be learned from its rapid decline after a brief period of success in the consumer industry [4][6]. Group 1: The Rise of Hong Jiu Fruit - Hong Jiu Fruit was once celebrated as "China's first fruit stock," achieving a market capitalization of HKD 60 billion and selling 25 million durians in 2022, accounting for nearly 10% of the national market share [8][9]. - The company reported revenues of CNY 15.08 billion and a net profit of CNY 1.452 billion in 2022, with a staggering year-on-year net profit growth of 405% [8]. Group 2: The Fall of Hong Jiu Fruit - The company faced a sudden halt in trading in March 2024 due to its inability to disclose its 2023 financial report, leading to an indefinite suspension [9][12]. - In April 2024, KPMG resigned as the auditing firm, revealing that Hong Jiu had made CNY 34.2 billion in prepayments to newly registered shell suppliers, which raised significant red flags [9][10]. Group 3: Common Pitfalls in the Consumer Industry - The first pitfall identified is a "self-destructive" cash flow model, where Hong Jiu's operational cash flow had a cumulative net outflow of CNY 4.06 billion from 2019 to 2022, with a further CNY 314 million deficit in the first half of 2023 [16][17]. - The second pitfall is family governance leading to a lack of oversight, where key positions were filled by relatives, allowing for unchecked financial decisions, such as the approval of CNY 34.2 billion in prepayments without proper risk control [18][20]. - The third pitfall involves misjudging consumer trends, as Hong Jiu continued to focus on high-end imported fruits while the market shifted towards more affordable options, resulting in significant losses [24][25]. - The fourth pitfall is the erosion of trust, as the founders engaged in questionable practices, such as secretly selling shares and misleading employees about the company's status [28][30]. Group 4: Lessons for the Consumer Industry - Companies should prioritize cash flow management before scaling operations, conducting regular cash flow pressure tests to avoid financial crises [33][34]. - It is essential to break away from family governance structures early on by introducing external oversight and professional management to ensure accountability [35]. - Understanding consumer trends should be a continuous effort, with regular market analysis and consumer research to adapt to changing preferences [36]. Group 5: Conclusion - The story of Hong Jiu Fruit serves as a cautionary tale for the consumer industry, emphasizing that sustainable growth requires careful management of cash flow, governance, and consumer trust [37][38].
老板被抓、强制退市，600亿水果帝国崩了