At present, Toly Bread Co.Ltd(603866) to realize the ambition of "peaches and plums all over the world", we need to work harder.
On March 16, Toly Bread Co.Ltd(603866) ( Toly Bread Co.Ltd(603866) , SH) released its annual report for 2021. The company's operating revenue increased by 6.24% and its net profit decreased by 13.54%, which is also the first decline in net profit of Toly Bread Co.Ltd(603866) since its listing in 2015.
One of the reasons for the growth of revenue but the decline of net profit is that the gross profit margin of the company decreased by 3.69 percentage points year-on-year.
Although in the financial report, Toly Bread Co.Ltd(603866) attributed the decline in gross profit margin to factors such as the impact of phased social security relief policies last year and stronger promotional activities. However, it is undeniable that the former "bread first stock" is facing more challenges: the epidemic is still repeated, the south is frequently frustrated, and emerging baking brands encroach on the market... In the crowded baking track, Toly Bread Co.Ltd(603866) how to break through?
net profit decreased for the first time
Toly Bread Co.Ltd(603866) has bid farewell to its golden age of rapid growth.
From 2012 to 2019, Toly Bread Co.Ltd(603866) 's revenue maintained a high double-digit growth rate, and its net profit also maintained a double-digit growth except for 2014 and 2019.
In 2021, Toly Bread Co.Ltd(603866) achieved a revenue of 6.335 billion yuan, a year-on-year increase of 6.24%; The net profit was 763 million yuan, a year-on-year decrease of 13.54%, which was the first decline in net profit of Toly Bread Co.Ltd(603866) since its listing in 2015. Revenue has not yet recovered the double-digit growth trend before 2019.
The bread and pastry business of mellow and other star products is still the main source of revenue for Toly Bread Co.Ltd(603866) and the revenue of bread and pastry reached 6.188 billion yuan in 2021, with a year-on-year increase of 6.01%, accounting for 97.67% of the annual revenue Toly Bread Co.Ltd(603866) said that in 2021, star products such as mellow cooking continued to grow steadily, and new products such as rock baked cake and cheese bread showed a relatively rapid growth; The revenue of moon cake and zongzi products was 133 million yuan and 12 million yuan respectively.
According to the 2021 annual report, the gross profit margin of Toly Bread Co.Ltd(603866) products is also declining. In 2021, Toly Bread Co.Ltd(603866) the operating cost increased by 11.84% year-on-year, and the gross profit margin decreased by 3.69 percentage points year-on-year. By product, the gross profit margin of bread and pastries, moon cakes and zongzi products decreased by 3.53 percentage points, 11.77 percentage points and 8.96 percentage points respectively.
In this regard, Toly Bread Co.Ltd(603866) attributed the main reason to the fact that the labor cost of the company was lower than that of the current period due to the impact of the national phased social security relief policy in the same period of last year; Promotion efforts increased, and the discount rate was higher than that in the same period of last year; The rise in raw material prices has led to an increase in production costs.
On the other hand, despite the increase of discount promotion, the performance growth rate of Toly Bread Co.Ltd(603866) was only 6.24%, of which the revenue growth rate of the main business of bread and pastry was only 6.01%, compared with 29.47% in 2016.
Toly Bread Co.Ltd(603866) is also trying to make efforts from a new path. On the one hand, in terms of retail channels, Toly Bread Co.Ltd(603866) said that in the future, on the basis of continuing to expand cooperation with major community group purchase platforms, it will actively expand o2o online business, deeply participate in client community cooperation, enrich cooperation forms and contents, and strengthen the dominant position of Toly Bread Co.Ltd(603866) brand online.
In addition, Toly Bread Co.Ltd(603866) in the announcement on the investigation of institutional investors, the company also said that in order to meet the needs of online consumption, the company opened official flagship stores on tmall, jd.com and other platforms and set up special e-commerce teams for operation and management. The sales items are becoming more and more abundant, and further expand the proportion of online marketing in sales. The company also cooperates with well-known Chinese webcast anchors to carry out online live broadcasting and bring goods, and cultivate its own anchor team, which have achieved good results and brought new breakthroughs to the company's next development.
In terms of new product research and development, Toly Bread Co.Ltd(603866) , who once said in the prospectus that "in the subdivided categories of bread, we focus on less but better, do not pursue more varieties, pursue the production and sales scale of single products, and large-scale production can reduce the company's unit production cost", now turns the bow, indicating that we are strengthening new product research and development and promotion. In 2021, Toly Bread Co.Ltd(603866) launched a series of new products such as rock baked cake, cheese bread, pastry bread, cranberry slices, etc., to adapt to the changing trend of current consumption habits and trends.
nationalization again blocked
Toly Bread Co.Ltd(603866) was born in Northeast China. In 1995, Wu Zhigang, who just retired from school, opened a bread workshop in Dandong, Liaoning Province, named "peach and plum", which is the initial prototype of "the first share of bread".
At present, bread products on the market can be mainly divided into long-term bread such as haoliyou, egg yolk pie and Panpan steamed bread; The representative brands of Zhongbao bread with a shelf life of 1-3 months are Yanker Shop Food Co.Ltd(002847) , Bestore Co.Ltd(603719) ; In addition, there are short-term bread with a shelf life of about one week, such as Toly Bread Co.Ltd(603866) such as .
Toly Bread Co.Ltd(603866) can be regarded as an innovator of short-term bread in China. At the beginning of its establishment, it innovatively shortened the shelf life of bread, produced short-term bread with fresh, quality and cost performance, and supplied it to supermarkets, county and township stores, canteens, etc. in Northeast China. Relying on the rapidly developing commercial super soil and baking market in the north at that time, Toly Bread Co.Ltd(603866) quickly gained a firm foothold in the north market.
The northern region has always been the main revenue of Toly Bread Co.Ltd(603866) . The 2021 annual report shows that North China and Northeast China jointly contribute nearly 50% of Toly Bread Co.Ltd(603866) revenue.
Toly Bread Co.Ltd(603866) adopts the business model of "central factory + wholesale", that is, set up their own production and processing factories in each city, and then take the factory as the center, through centralized logistics distribution, wholesale the products to local and surrounding urban shopping malls, supermarkets or dealers, and finally sell them to consumers. This model helps Toly Bread Co.Ltd(603866) establish significant economies of scale and reduce the company's sales expenses.
In addition, Toly Bread Co.Ltd(603866) supplemented by the "production by sales" mode, flexibly formulate the production plan according to the market demand. The factory organizes two shifts of personnel for production. During the day, the production is carried out according to the estimated order quantity. In the afternoon, the customer is counted before work, and the order is supplemented at night after submitting the order required for the next day. This also ensures the production and sales of products.
With this business model, Toly Bread Co.Ltd(603866) successfully ran through the northern market and ushered in a highlight moment in 2015.
This year, 80 year old Wu Zhigang took Toly Bread Co.Ltd(603866) to the Shanghai stock exchange for listing. In the same year, Toly Bread Co.Ltd(603866) began to move southward, and most of its branches in the southern market were established in 2015 and 2016.
However, under the same model, Toly Bread Co.Ltd(603866) has hit a wall everywhere in the southern market.
On the one hand, when Toly Bread Co.Ltd(603866) went south, the baking market in the South had already developed more mature than that in the north. At the same time, it replaced the convenience stores in the canteen on a large scale and already had its own brand of baked bread. The annual reports of Li Nanfang, Li Nanfang and Li taozhong in Jiangsu showed that most of them were in the state of 10 million in 2026, of which Li Nanfang and Li taozhong were in the state of 10 million in 2026.
On the day of issuing the annual report, Toly Bread Co.Ltd(603866) announced that it planned to cancel Fuzhou Toly Bread Co.Ltd(603866) Co., Ltd. and Xiamen Toly Bread Co.Ltd(603866) Co., Ltd., the wholly-owned subsidiaries of the company. In 2021, the two subsidiaries lost 127072 million yuan and 118797 million yuan respectively.
short bread still sell
External competition is more fierce than going south and encountering obstacles.
On the one hand, the short-term bread market is facing competition and the products tend to be homogeneous. Haolilai, weiduomei, mancoton and Dali food have all entered the short-term bread track.
Especially in 2017, Dali announced its entry into the short bread Market and released the short bread brand meibaochen to snipe at peaches and plums at a low price in 2018. Similarly, in 2018, binbao, an old rival of Toly Bread Co.Ltd(603866) who adopted the "central factory + wholesale" model, acquired 100% of the shares of Beijing mankerton, Shanghai mankerton, Guangdong mankerton and Sichuan mankerton, further competing for the short-term bread market.
On the other hand, the baking market has ushered in a wave of investment boom, but short-term bread has not been favored.
According to the data of AI media consulting, there were 22 investment events in the bakery industry from January to September 2021, with an investment amount of 5.7 billion yuan, about three times that of 2016. Meanwhile, according to AI media consulting, the scale of China's bakery market will reach 260.08 billion yuan in 2021, with a year-on-year increase of 19.9%. The epidemic situation will gradually recover, and the baked food market will maintain a growth rate of about 10%. The scale of China's baked food market will reach 306.99 billion yuan in 2023.
In addition, consumers' consumption preferences are changing, quality consumption has become the theme, and "eat full" and "eat well" can no longer meet the needs of consumers, and "eat healthy" has become the theme. Under this background, Toly Bread Co.Ltd(603866) 's trump card of "cost performance" is not as powerful as before.
On the other hand, the baking track is becoming more and more crowded.
Offline old bakeries such as holly's and Paris betaine are expanding rapidly. Meanwhile, 711, convenience bee, Rosen and other convenience stores also have their own baking products; Emerging baking brands such as Momo dessert Bureau and daddy sugar handmade toast are gaining capital preference; Online, there are also xuanma egg yolk pastry, happy pastry and other brands.
Toly Bread Co.Ltd(603866) 's market is facing the crisis of being eroded, which tests the new helmsman of the company.
In 2019, Wu Zhigang, the Toly Bread Co.Ltd(603866) 84 year old founder, officially retired, and his two sons Wu Xueliang and Wu Xuequn took over the chairman and general manager of the group respectively.
Different from the strategy of focusing on "less but better" by the parents, the new helmsman mentioned that it is necessary to strengthen the research and development and promotion of new products. In the annual report, Toly Bread Co.Ltd(603866) said, "in order to adapt to the new generation of consumer groups dominated by the post-90s and post-00s and provide new products to adapt to their new tastes, this will also become the next growth point of the company."
What remains unchanged is that Toly Bread Co.Ltd(603866) will continue its national "campaign". Toly Bread Co.Ltd(603866) said that in 2022, the company will actively expand the southwest market and Xinjiang market and further improve the national market layout on the basis of continuing to focus on the markets in East and South China. After all, for Toly Bread Co.Ltd(603866) , shelves are the most important advertising in the less well-known market.
