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From Baijiu to Kiwifruit: China Shenshan Orchard Holdings Goes Public

July 12, 2021

On July 5, Chibi Shenshan Xingnong Technology Co. Ltd. (Shenshan Xingnong) held a ceremony in the city of Chibi in China’s Hubei province to celebrate the company’s successful IPO launch. The parent company China Shenshan Orchard Holdings (formerly Dukang Distillers Holdings Ltd.) is now listed on the main board of the Singapore Exchange under the stock code BKV, thereby becoming China’s first domestic kiwifruit producer to achieve a public main board listing.

Dukang Distillers was previously a producer of the traditional Chinese spirit baijiu but had reportedly been suffering from declining profits in recent years owing to the impact of emissions reduction measures and steadily waning market demand for the liquor. Consequently, observing a shortage of heavy-hitting brands in the domestic Chinese fruit production industry in addition to the robust and highly developed market for kiwifruit, Dukang Distillers decided to enter the agricultural sector, purchasing domestic Chinese kiwifruit grower Shenshan Xingnong and renaming itself to reflect its transition from liquor production to kiwifruit cultivation.

Shenshan Xingnong holds exclusive forestry rights on eight kiwifruit orchards in the Chibi city area of Hubei province, with a total usable area of 9,805 mu (654 hectares), making it one of China’s largest kiwifruit growers. As of March 17, 2021, Shenshan Xingnong held 80 different trademarks and 36 patents. The company’s kiwifruit varieties currently include green-fleshed, yellow-fleshed and red-centered fruit, including the trademarked Fairy Gold and Jade Green varieties. Two of the company’s other varieties — the green-fleshed Miyu Lüguo (“sweet-talk green”) and Milian Hongxin (“sweet love red heart”) — have a sweetness level of around 18 degrees Brix when fully ripe.

The company holds exclusive rights to the yellow-fleshed Fairy Gold variety, also known as Yannong No. 1. This plump, golden-fleshed kiwifruit has a delicate fruity and floral fragrance. It can reach over 18 degrees Brix in sweetness and features a thin skin, with the edible portion comprising 96% of each fruit.

Shenshan Xingnong’s kiwifruit orchards have been automated and mechanized, including an automatic integrated irrigation and fertilizing system, physical pest control methods and electrical machinery employed throughout the orchards. This has greatly boosted the efficiency of key steps in the growing process such as fertilizer application, weeding and disinfection. Each kiwifruit plant has an “ID card” hanging on it with a QR code that can be scanned to view the plant’s details, such as its serial number, age and so on. As a result of this digital information system, each individual kiwifruit can be traced back to the exact tree it grew on.

The revenue and net profit from Shenshan Xingnong’s kiwifruit production have reportedly been steadily increasing since the company was established in 2017 and were barely affected by the pandemic in 2020. The company’s revenue increased from 49.5 million Chinese yuan in 2017 to 99.5 million yuan in 2019, while its net profit increased from 19.5 million yuan in 2017 to 53.4 million yuan in 2019, representing average annual growth rates of 41.8% and 65.5%, respectively.

Images: Shenshan Xingnong

This article was translated from Chinese. Read the original article.

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