On February 22, Guangdong Yantang Dairy Co.Ltd(002732) released the latest record form of investor relations activities, in which a number of institutions including Shenmao investment and Kejin holdings participated in the research. In the research, the most concern of many institutions is the expansion outside the province of Guangdong Yantang Dairy Co.Ltd(002732) . In the face of inquiry, Guangdong Yantang Dairy Co.Ltd(002732) again mentioned the strategy of “intensive cultivation of Guangdong, looking at South China and marching towards the whole country”. In the view of insiders, Guangdong Yantang Dairy Co.Ltd(002732) the first step of development is a fact. How to take the last two steps has become the focus of the market in the next step.
Duxiu in the province misfire outside the province
On February 22, Guangdong Yantang Dairy Co.Ltd(002732) released the latest record of investor relations activities. Some investors asked about their market development, and Guangdong Yantang Dairy Co.Ltd(002732) put forward the development strategy of “intensive cultivation of Guangdong, looking at South China and moving towards the whole country”. In fact, the strategy was mentioned as early as the last activity, the survey in October 2021. Now when asked again, we may see the market’s expectations for it to go out of Guangdong and explore the national market.
Another investor asked Guangdong Yantang Dairy Co.Ltd(002732) how to deal with the pressure brought by leading enterprises in Guangdong? Guangdong Yantang Dairy Co.Ltd(002732) said it would use existing brands and channels to consolidate the advantages in the province, and “make good use of high-quality market resources and actively increase efforts to expand foreign markets”.
Guangdong Yantang Dairy Co.Ltd(002732) as an old dairy enterprise, the brand was launched as early as 1956. In 2014, Guangdong Yantang Dairy Co.Ltd(002732) successfully landed in a shares. Looking at the operating situation in recent years, its profit is not stable. From 2018 to 2020, its deducted non net profit was about 52.11 million yuan, 123 million yuan and 108 million yuan respectively. According to the forecast of 2021 annual report, Guangdong Yantang Dairy Co.Ltd(002732) deducted non net profit is about 140-150 million yuan, and the net profit attributable to the parent is 150-170 million yuan.
However, this good news has not been reflected in the secondary market. Since October 2021, Guangdong Yantang Dairy Co.Ltd(002732) share price has fluctuated and declined from a high of nearly 35 yuan / share, and now it is less than 23 yuan / share.
According to the analysis of insiders, the performance of the secondary market may reflect the market’s concern about Guangdong Yantang Dairy Co.Ltd(002732) being “trapped” in Guangdong to a certain extent.
According to the 2021 semi annual report data, Guangdong Yantang Dairy Co.Ltd(002732) has a revenue of about 927 million yuan in Guangdong, accounting for about 98%, while the revenue outside Guangdong Province is only about 20.39 million yuan. During the period, Guangdong Yantang Dairy Co.Ltd(002732) had 508 dealers in Guangdong, while there were only 52 outside Guangdong.
Compared with similar enterprises, Guangdong Yantang Dairy Co.Ltd(002732) this problem is more obvious. For example, although Beijing Sanyuan Foods Co.Ltd(600429) is based in Beijing, its market share inside and outside Beijing is basically the same, and its revenue is about 3.8 billion yuan and 3.48 billion yuan respectively; New Hope Dairy Co.Ltd(002946) the revenue of East China and southwest China accounted for 23.65% and 39.87% respectively, and the northwest and North China accounted for 16.86% and 10.04% respectively.
the worry of “falling behind” in the competition among peers
In recent years, dairy enterprises have made frequent acquisitions and expansion. For example, New Hope Dairy Co.Ltd(002946) has spent a high price of 1.711 billion yuan to acquire Huanmei dairy soon after its listing in 2019, pocketing the market share of northwest regions such as Shaanxi and Gansu. At present, there are 62 participating and holding enterprises in Yunnan, Anhui, Zhejiang and other provinces. In 2021, Feihe acquired about 3.342 billion shares of the original ecology, accounting for 71.26% of the total shares of the original ecology.
Some investors asked, “how is the company’s current market development?”, Guangdong Yantang Dairy Co.Ltd(002732) said that the total population of Guangdong, Hong Kong and Macao Dawan district is about 70 million, and the demand for dairy products is huge, which has always been the focus of enterprise development. At the same time, Guangdong Yantang Dairy Co.Ltd(002732) also said that it would “gradually increase the market development in regions outside the province”.
However, in the view of insiders, in the face of the expansion of peers, Guangdong Yantang Dairy Co.Ltd(002732) may have the risk of “falling behind”.
According to statistics, among the 18 comparable dairy enterprises, Guangdong Yantang Dairy Co.Ltd(002732) lags behind the industry median of 4.3 billion yuan with a current market value of less than 3.6 billion yuan; Its revenue is less than 1.5 billion yuan, which also lags behind the industry median of about 1.6 billion yuan. The market value of Guangdong Yantang Dairy Co.Ltd(002732) ranks behind Bright Dairy & Food Co.Ltd(600597) , Beijing Sanyuan Foods Co.Ltd(600429) , Xinjiang Tianrun Dairy Co.Ltd(600419) , Royal Group Co.Ltd(002329) , and the market share of Guangdong Yantang Dairy Co.Ltd(002732) also ranks behind the above enterprises according to the 2021 data provided by the forward looking Research Institute.
In addition, leading enterprises are also accelerating the layout in Guangdong Province, which will inevitably carve up part of the market of Guangdong Yantang Dairy Co.Ltd(002732) . In this regard, Shen Meng, executive director of Xiangsong capital, said that large leading enterprises have abundant funds and the strength to build supply and marketing chains, ” Guangdong Yantang Dairy Co.Ltd(002732) the advantages formed locally can not give them long-term protection.”
Song Liang, a dairy analyst, said that relatively speaking, industry leaders have strong competitive advantages, and it is difficult for secondary scale enterprises to compete with them. Although most large dairy enterprises are rooted in the North due to grassland, milk source and other restrictions, leading enterprises have been going south to Guangdong for 20 years, and the market share of leading enterprises in Guangdong has exceeded 50%.
The reporter of Beijing business daily contacted Guangdong Yantang Dairy Co.Ltd(002732) on relevant issues, and no reply has been received as of press time.
channel sinking or turnaround
As for whether Guangdong Yantang Dairy Co.Ltd(002732) can smoothly move towards the whole country, Shen Meng told the Beijing Business Daily: “for the regional Guangdong Yantang Dairy Co.Ltd(002732) , in order to get out of the headquarters of Guangdong, we must first establish a stable overseas milk supply chain, otherwise even large-scale marketing can not meet the market demand.”
Nowadays, with the increasing attention of consumers to health, low-temperature fresh milk may be the main development direction in the future. The data show that from 2015 to 2020, the compound annual growth rate of low-temperature fresh milk reached 10%, compared with normal temperature milk only 3%.
It is understood that Guangdong Yantang Dairy Co.Ltd(002732) plans to develop both low-temperature milk and normal temperature milk at the same time. Low temperature milk is fresher and healthier than normal temperature milk. However, due to the unique sterilization processing technology, its shelf life is shorter, the transportation radius is smaller, and the requirements for the cold chain are higher.
How to get rid of the constraints of transportation, sales and other channels while building high-end dairy products has become a problem to be considered by Guangdong Yantang Dairy Co.Ltd(002732) . “Compared with other foods and beverages, dairy enterprises need higher costs and face greater difficulties in expanding. Due to the perishable characteristics of dairy products, freshness and health are the basic guarantee of products, which requires that the distribution scope of products should be supported by the milk source base. At the same time, a considerable part of dairy products need full cold chain transportation, which also poses a challenge to the laying of supply and marketing channels of enterprises 。” Industry insiders said.
However, some insiders believe that if Guangdong Yantang Dairy Co.Ltd(002732) wants to seek a breakthrough, it may not be the only way to expand across the country. A new way of playing may lead to a bright future.
“For Guangdong Yantang Dairy Co.Ltd(002732) For such enterprises, with their local advantages over the years, they turn to explore the sinking market and let their products really enter the county, township and town levels, or opportunities in the future. On the one hand, with a deeper understanding of the market, local dairy enterprises can optimize the whole local supply and marketing chain, reduce costs and increase efficiency, and compete with the leaders with higher cost performance. On the other hand, with the increase in the income of township residents and the upgrading of consumption patterns, the sinking market also has broad space. ” Song Liang said that what Guangdong Yantang Dairy Co.Ltd(002732) should pay more attention to may be to really give full play to its local brand advantages.
