Milestones
Forging Ahead with Determination: Harvest Capital 2023 Year-End Review
Date: 2023-12-31 Views:
Source: Harvest Capital
The turbulent capital markets of 2023 painted a canvas full of variables for the consumer investment industry. Policy directions flickered like lights in the night sky. As a Chinese consumer investment institution navigating through powerful currents, Harvest Capital deeply understands the gravity of the current situation.
Capital market changes resemble movements in a symphony. New guidance, including the Private Equity Fund Filing Guidelines, Private Investment Fund Supervision and Management Measures, and the Trial Measures for Overseas Issuance and Listing of Securities by Domestic Enterprises, have opened reform directions for the industry. These policy guidelines are not merely traffic lights but herald the transformation of financial markets.
In this ever-changing market, the consumer sector, like technology, plays a critically important role. It is precisely the convergence of these two major fields that creates the market's spectacular dynamics.
The consumer industry need not be discouraged by the brilliance of the technology sector. The consumer industry possesses unique advantages—relatively stable cash flow and strong self-sustaining capabilities—allowing it to focus more intently on building internal strengths during market downturns. Just as martial artists cultivate inner strength during adversity, the consumer industry can welcome the dawn of greater victories through challenging times.
In this era of vitality and transformation, Harvest Capital consistently upholds its investment philosophy of embracing everyday life and empowering people's livelihoods. We deeply understand the Matthew Effect and know how to seize opportunities and follow market rhythms in turbulent markets. This represents both challenge and opportunity.
As 2023 draws to a close, Harvest Capital is entering its 17th year. At this year-end transition, we present our report card, reviewing the journey we've traveled. This serves as both a summary of the past and a vision for the future.
Among projects closed in 2023, as the exclusive investor, Harvest Capital invested a cumulative RMB 500 million in Xiaocaiyuan, representing the largest financing in the mass-market affordable dining sector in recent years. Xiaocaiyuan is the absolute leader in the rapidly developing mass-market affordable Chinese dining track, with over 500 restaurants, leading the industry in business scale, growth rate, and store efficiency.
Additionally, we are simultaneously closing deals with a leading Chinese domestic brand and a household-name fast-moving consumer goods brand. Our team has been serving these enterprises for some time, helping them streamline operations, and will announce good news at the appropriate time.
Post-investment work with Xiaocaiyuan was one of the investment team's key priorities this year. We worked together with Xiaocaiyuan on the second growth curve, internal control reforms, group digitalization, and improving management models, elevating the company's management standards in finance, legal affairs, and operations.
Xiaocaiyuan's second growth curve is becoming a community canteen close to people's daily lives. Harvest Capital deeply participated in Xiaocaiyuan's strategic planning and helped implement the strategy. From new store layouts and floor plans to individual store equipment and supplier connections, we conducted nationwide market research with Xiaocaiyuan, completing strategic direction upgrades at critical moments.
Mr. Alan Song, Chairman of Harvest Capital, held numerous meetings to discuss operations and frequently traveled to Tongling and Shanghai for Xiaocaiyuan business. To help recruit high-caliber financial management talent, he personally interviewed every CFO candidate to elevate financial management standards.
Additionally, we significantly enhanced Xiaocaiyuan's internal control system. By analyzing weaknesses and participating in reform procedures, we promoted the establishment of an internal audit department and built a more modern management system.
We also helped the company achieve digital efficiency breakthroughs.
We assisted Xiaocaiyuan with membership system upgrades—from supplier selection, coordination, and usage process supervision—and promoted the establishment of a membership operations department at Xiaocaiyuan, tracking membership targets weekly, overseeing implementation, taking responsibility for results, and helping the company achieve its objectives.
We deeply participated in the BI system. Having conducted thorough due diligence and understanding both finance and operations, we engaged deeply with the BI system. We exhaustively researched all available options in the market, analyzed their comparative strengths and weaknesses, understood key issues, saved the company time and energy, helped the company better understand data-driven management philosophy, and elevated management team methods and concepts.
On the fundraising front, this year we raised a new round of RMB fund and USD fund. We also achieved strong performance in RMB fund exits this year, rewarding our LPs accordingly.
2023 Selected Portfolio Company Updates
Eastroc
Beverage
This mine new products, cut into the mineral water track;
Jinmailang iced black tea packaging upgrade;
Today Milo launched a new electrolyte beverage: call balance;
Launched "green" 0 fried braised beef noodles;
Hebei flood, Jinmailang donated 350000 bottles of cool white open to assist Zhuozhou and other areas;
After the Gansu earthquake, Jinmailang donated nearly 7000 boxes of halal barrels to help the disaster area.
Jinmailang
Laoxiangji
30th anniversary brand commemoration
Major launch of body aesthetics lingerie, Aimer sleepwear, and other products
Professional sports brand CHICHU under Aimer opened at Beijing China World Mall
Third anniversary of carbon neutrality goals: Aimer partnered with industry partners to promote green development across the supply chain
Aimer
Underwear
Babi
Food
Babi steamed buns launched at Beijing 7-ELEVEN stores
Completed full-year store opening targets by Q3; group meal business growth reached 31.23%; net profit attributable to parent company (excluding non-recurring items) increased 23.70% year-over-year
Babi R&D chef won gold award at the First National Golden Chef Exchange Invitational Competition
Phase I of Babi Wuhan Intelligent Manufacturing Center project topped out
Xiaocaiyuan
Qiaqia
Food
Honor of Harvest
We received recognition from PREQIN, Shanghai International Equity Investment Fund Association, Qingke Investment Community, Rongzhong China, Titanium Media, Yicai, 36Kr, China Venture, Investor Network, China Venture Capital Research Institute, 108th National Sugar and Wine Fair, Jiemian News, Food Capital, IPO Insider, Blue Shark Consumer, Tide Observation New Consumer, CXO Innovation Center, 21st Century Business Herald, Forbes China, BRICS Finance, Lieyun Network, Fund of Funds Research Center, Fund of Funds Weekly, and other media outlets (in no particular order). We thank associations, media, and research institutions for their recognition.
- 04-
This year, we published multiple articles expressing our thinking on the consumer industry and macroeconomic conditions:
"Discriminating Against Consumption Will Bring Technology Its Bitter Fruits": Amid this year's technology investment fervor, Mr. Alan Song, Chairman of Harvest Capital, was the first to point out the current overheating in technology investment and excessive cooling in consumer investment. We called on policymakers to provide consumer enterprises with more opportunities and space.
"Peak Population Transformation": New thinking on how enterprises should develop in response to demographic challenges
"Don't Waste Zibo Barbecue's Popularity: The Path of Livelihood-Oriented Urban Management": The importance of people's livelihoods and the enduring path of urban management
"The Hu Huanyong Line of Human Hearts": How to choose when facing geographical differences, survival and development boundaries, and value dividing lines
"Pinduoduo's Victory": Progress in Chinese business lies in achieving an order of both "quality" and "affordability," unlocking growth codes with "systemic beauty," and implementing rational prosperity
"Kong Yiji's Long Gown and China's Uniqlo Moment": Calling for more enterprises to be consumer-centric and create consumer value
"Cold War Era Consumerism": Only when implemented in residents' lives does it embody the concrete meaning of happy living
Media Communications:
Video Content: This year, we produced over 130 video content pieces. Follow @Harvest Capital / @Alan Song626 video accounts for reviews.
In the new year, Harvest Capital will continue to closely monitor market changes, continuously optimize investment strategies, help more enterprises soar on the capital stage, and find the growth codes for lasting success. With greater passion and more solid professional expertise, we will continuously challenge ourselves, create greater value, advance with the times, and paint a bright future for Chinese consumer investment.
Related information
