Although the third quarterly report of last year has revealed the news of the slowdown in growth, the 2021 annual report recently released by Foshan Haitian Flavouring And Food Company Ltd(603288) ( Foshan Haitian Flavouring And Food Company Ltd(603288) . SH) still makes many investors reluctant to accept the fact that the "soy sauce Mao" ceiling is coming - revenue growth of 9.71% and parent net profit growth of 4.18%, and these two indicators have exceeded 15% in the past four years.
The market value of Foshan Haitian Flavouring And Food Company Ltd(603288) has fallen by about 3% within one week after the release of the financial report. In the financial report, Foshan Haitian Flavouring And Food Company Ltd(603288) frankly said that 2021 was "facing unprecedented challenges" and adopted the strategy of "seizing increment from stock" in the face of market changes.
In fact, in the past year, the aftermath of covid-19 epidemic, weak consumer demand, rising prices of various raw materials and materials, the rise of community group purchase and other emerging channels have made the whole consumer goods market like a formidable enemy Foshan Haitian Flavouring And Food Company Ltd(603288) last year, the gross profit margin decreased by 3.73 percentage points and the net profit margin decreased by 1.44 percentage points, which significantly reduced the profit space.
The price of Foshan Haitian Flavouring And Food Company Ltd(603288) , which insisted on not raising the price for five years, was announced in the fourth quarter of last year. How effective is the current price increase? Can we absorb the cost pressure? For the "vicious competition" of community e-commerce, Foshan Haitian Flavouring And Food Company Ltd(603288) how to adjust its own channels? Soy sauce growth peaked, Foshan Haitian Flavouring And Food Company Ltd(603288) how to find more growth points? In this financial report, we got a certain answer.
weak demand, rising costs, Haitian growth "stalled"
According to the annual report, in 2021 Foshan Haitian Flavouring And Food Company Ltd(603288) achieved an operating revenue of 25.004 billion yuan, a year-on-year increase of 9.71%; The net profit attributable to the parent company was 6.671 billion yuan, a year-on-year increase of 4.18%. Although it has maintained growth, compared with the previous highlights, Foshan Haitian Flavouring And Food Company Ltd(603288) this achievement is still difficult to satisfy investors.
Looking back from 2017 to 2020, the growth rate of operating revenue of Foshan Haitian Flavouring And Food Company Ltd(603288) was 17.06%, 16.80%, 16.22% and 15.13% respectively, and the growth rate of net profit attributable to parent company was 24.21%, 23.60%, 22.64% and 19.61% respectively. Compared with the previous double-digit growth of more than 15% revenue growth and about 20% net profit growth, the growth rate of Foshan Haitian Flavouring And Food Company Ltd(603288) 2021 rarely fell to a single digit.
The reporter of the daily economic news found that from the perspective of the external environment, the first factor affecting the Foshan Haitian Flavouring And Food Company Ltd(603288) growth rate is the rising cost of raw materials. The price of soybeans and other raw materials will not rise for a long time in 2021, which mainly leads to the high price rise of soybeans and packaging materials Foshan Haitian Flavouring And Food Company Ltd(603288) annual report shows that the operating cost of the company increased by 16.36% in 2021, much higher than the increase of operating revenue; Affected by the rise in procurement costs, the gross profit margin decreased by 3.73 percentage points year-on-year.
At the performance presentation meeting, Foshan Haitian Flavouring And Food Company Ltd(603288) said: "the cost of major raw materials and energy continued to rise in 2021, but the company actively tried to find ways to tap potential, control cost and improve efficiency, contribute profits and eliminate the adverse impact of cost rise to a certain extent in logistics, procurement, production management, technological transformation and other aspects."
What lies ahead of Foshan Haitian Flavouring And Food Company Ltd(603288) is not only the rising cost, but also the weak demand under the epidemic. According to the research of securities companies, the inventory of dealers in Foshan Haitian Flavouring And Food Company Ltd(603288) of last year was high, and there was great pressure on inventory digestion.
"From the point of view of the sales side, the main pressure is still the weakening of consumer demand, which restricts the growth of sales. In particular, the repeated epidemic restricts the consumption of catering and so on. However, we believe that the positive trend in the future will not change, and it is expected to gradually return to the normal growth level in the next few years." At the performance presentation meeting, Foshan Haitian Flavouring And Food Company Ltd(603288) vice president Guan Jianghua said.
In addition, the reporter also noted that in recent years, grain and oil enterprises such as Yihai Kerry Arawana Holdings Co.Ltd(300999) , Luhua have also joined the condiment track. As the leader of condiment, Foshan Haitian Flavouring And Food Company Ltd(603288) is also facing the "pursuit" of latecomers. In this regard, Foshan Haitian Flavouring And Food Company Ltd(603288) Director Secretary Zhang Xin said at the performance presentation meeting: "The condiment industry has always been a fully competitive industry. The entry of head brands will bring certain competitive pressure to Haitian, but at the same time, it will also bring product, channel and technology innovation to the industry and promote the development of the industry. As an enterprise, what we can do is to consolidate our own advantages and take the lead in orderly competition in the industry as a leading enterprise."
price increase was basically completed, and revenue increased by 23.8% month on month in the fourth quarter
The reporter of the daily economic news noted that Foshan Haitian Flavouring And Food Company Ltd(603288) , which insisted on not raising the price for five years, was finally announced to raise the price in the fourth quarter of last year because of the rising cost. The ex factory price of some products such as soy sauce, oyster sauce and sauce was adjusted by 3% ~ 7%, and the implementation of the new price began on October 25, 2021.
Zhongtai Securities Co.Ltd(600918) research report points out that the price increase of Foshan Haitian Flavouring And Food Company Ltd(603288) will help to thicken the profit margin of dealers. The reason is that with the gradual transparency of the original price system and the impact of community group purchase, the profit space of dealers in 2021 is meager. After the price increase, with the establishment of a new price system, it is expected to optimize the channel profit space and thicken the profit level of dealers.
With the price increase, dealers' enthusiasm for goods preparation has gradually increased, which can be seen from the quarterly income of Foshan Haitian Flavouring And Food Company Ltd(603288) quarter. In the third quarter of 2021, Foshan Haitian Flavouring And Food Company Ltd(603288) achieved an operating revenue of 5.662 billion yuan, while in the fourth quarter, it increased to 7.010 billion yuan, with a month on month increase of 23.81%. The performance was significantly boosted.
according to the research report released on March 26, Foshan Haitian Flavouring And Food Company Ltd(603288) has successfully completed the implementation of terminal price, the price increase is conducted smoothly, and the Spring Festival sales are stable. Although the channel survey feedback that the terminal inventory is at a high level, after the price increase, the channel profit is thickened, the power is increased, the superimposed demand is gradually improved, and the inventory problem is expected to be gradually alleviated.
The reporter also learned from the performance briefing that the price increase of Foshan Haitian Flavouring And Food Company Ltd(603288) has been basically completed, but the company believes that the current cost market is still at a high level. According to this trend, the price increase last year will be difficult to fully cover the pressure of existing costs.
As for whether there will be a new price increase plan in the future, Foshan Haitian Flavouring And Food Company Ltd(603288) said: "in addition to considering the cost, consideration should also be given to the market when raising the price. At present, the demand of consumers is weak, and the cost cannot be transferred to consumers indefinitely. Enterprises also need to actively digest the cost through various methods, and there is no consideration of raising the price again for the time being."
from confrontation to cooperation, moving towards reconciliation with community group buying
Since the outbreak in 2020, China's retail market has undergone a reconstruction.
The social initiative of maintaining social distance and working life at home has led to the rise of emerging channels such as community group purchase, live e-commerce and home delivery platform, which has divided the passenger flow of traditional business supermarkets. What's more, the low price promotion of community group purchase disrupted the channel price system and made offline dealers miserable. Foshan Haitian Flavouring And Food Company Ltd(603288) , which takes advantage of offline channels (offline sales account for more than 90%), has a deep feeling about this.
In last year's investor research and regular reports, Foshan Haitian Flavouring And Food Company Ltd(603288) has repeatedly said that it was "impacted by community group buying" and "the fission of new channels has brought new challenges to the condiment market". The 2021 annual report said that it had faced "vicious competition" from community group buying. However, in the second half of 2021, the company has turned to cooperate with community group buying, taking a key step in the company's transformation and multi-channel development.
The annual report shows that in the face of market changes, Foshan Haitian Flavouring And Food Company Ltd(603288) mobilized the marketing team and dealer team to accelerate the transformation and seize the increment from the stock. While ensuring the stable development of the main channel, the company accelerated the layout and development of new retail channels in the second half of the year, strengthened the in-depth cooperation with community group purchase, Shida home platform and e-commerce of major platforms, and achieved initial results.
From the financial data, Foshan Haitian Flavouring And Food Company Ltd(603288) last year, the revenue of online channels increased by more than 85%, and the proportion of sales increased from 1.76% to 2.98%. Accelerating the expansion of new retail also reduced the gross profit margin of online channels by 13.22 percentage points year-on-year, which was greater than the decline of the overall gross profit margin. The company said that it was mainly due to the rise of costs and the increase of market investment in online business developmentp align="center" style="text-align:center;"> Foshan Haitian Flavouring And Food Company Ltd(603288) revenue from various channels, source: screenshot of annual report
The attitude towards community group buying has changed from opposition to cooperation, which also reflects Foshan Haitian Flavouring And Food Company Ltd(603288) the adjustment of channels under multiple pressures. For the drivers of this transformation, Zhu danpeng, an analyst of China's food industry, told the daily economic news: "with the recurrence of the epidemic and the prominence of the lazy effect of consumers, community e-commerce and community fresh food can solve the problem of the last kilometer of consumption, which can make Foshan Haitian Flavouring And Food Company Ltd(603288) closer to consumers, improve the service system and further strengthen customer stickiness, which is also the reason for Foshan Haitian Flavouring And Food Company Ltd(603288) changing its attitude towards new channels."
Chen Xiaolong, a seasoning marketing expert and industrial investor, said: "from a strategic point of view, if Foshan Haitian Flavouring And Food Company Ltd(603288) does not embrace community group buying, and competitors embrace this channel, they may be overtaken by competitors in the regional market. The first order of the platform can promote the penetration of Foshan Haitian Flavouring And Food Company Ltd(603288) series products in the family, so Foshan Haitian Flavouring And Food Company Ltd(603288) should enter the community group buying channel."
Zhang Xin said at the performance briefing: "community group buying has gradually become a normal sales channel. Facing the trend and irreversible changes in channel structure and consumption mode, the company must actively transform and embrace the trend."
However, after entering the emerging channels, how to balance the interests of various channels, especially how to ensure that the interests of more than 7000 dealers are not damaged? This is also an important issue in front of Foshan Haitian Flavouring And Food Company Ltd(603288) us. Chen Xiaolong believes that in most cases, Foshan Haitian Flavouring And Food Company Ltd(603288) cooperates with community group purchase platforms through dealers, and some platforms cooperate with exclusive varieties to avoid the price system of local dealers impacted by the low price of community group purchase. However, in some county-level markets, it is still impossible to avoid the conflict of channel prices.
"On the whole, community group buying has played a positive role in promoting the sales growth of Foshan Haitian Flavouring And Food Company Ltd(603288) and the price conflict of channels is always a problem, and the dynamic balance between channels. Even if Foshan Haitian Flavouring And Food Company Ltd(603288) does not do community group buying, there are price conflicts among various channels in the region, which can be solved by the region itself." He said.
fali vinegar, wine, grain and oil, can a new growth point come
In the product structure of Foshan Haitian Flavouring And Food Company Ltd(603288) , soy sauce carried the "banner" of sales of 14.188 billion yuan last year with "one's own strength". The revenue of other categories of oyster sauce was 4.532 billion yuan and that of seasoning sauce was 2.666 billion yuan. The above three products accounted for 56.74%, 18.13% and 10.66% of the total revenue respectively.
The annual report shows that Haitian soy sauce has ranked first in the industry for 25 consecutive years. However, as the leader of soy sauce, in recent years, Foshan Haitian Flavouring And Food Company Ltd(603288) also tried to get rid of the dependence on single products and seek diversified development of products. In 2021, in addition to the three core categories, Foshan Haitian Flavouring And Food Company Ltd(603288) of other categories achieved revenue of 2.211 billion, a year-on-year increase of 13.37%. The company said that among them, vinegar, cooking wine and other products have begun to take shape, and the accelerated development of new categories will further expand the company's competition and leading advantage and maintain strong development momentum and vitalityp align="center" style="text-align:center;"> Various products displayed on Foshan Haitian Flavouring And Food Company Ltd(603288) official website, picture source: Foshan Haitian Flavouring And Food Company Ltd(603288) official website
Zhu danpeng analyzed to the reporter that Foshan Haitian Flavouring And Food Company Ltd(603288) of soy sauce is the leader in the industry, but with the production capacity restriction and intensified competition, it has obviously touched the ceiling, which is also the core reason for the company's layout of multi brand, multi category, multi scene, multi-channel and multi consumer groups.
"Vinegar, cooking wine and compound seasoning are all categories with large capacity. At present, the competition pattern has not been fixed. The company will also make full articles in terms of product system, production layout, structure reform and talent mechanism, so as to accelerate the development of these new categories and build new growth points." Guan Jianghua said at the performance briefing.
The reporter noted that in 2021 Foshan Haitian Flavouring And Food Company Ltd(603288) also set up a number of legal entities such as vinegar wine group and daidaidaitian grain and oil platform to promote the vinegar wine and grain and oil market.
Kaiyuan securities research report pointed out that Foshan Haitian Flavouring And Food Company Ltd(603288) product end continues to expand, vinegar and cooking wine are expected to grow in succession after the three categories, while zero added soy sauce in the new products has been put on the market, and the outlook for cola in the future; Grain and oil products have also been launched on the market Foshan Haitian Flavouring And Food Company Ltd(603288) relying on the advantages of the original channels, the platform enterprise has taken shape. At the same time, the company accelerated the layout of new retail channels, strengthened in-depth cooperation with community group buying, and accelerated market transformation.
In terms of performance outlook, Foshan Haitian Flavouring And Food Company Ltd(603288) set the operating target for 2022 to increase revenue by 12% and profit by 12% (the operating revenue target is 28 billion yuan and the profit target is 7.47 billion yuan). This growth target is not high compared with the glorious period, but it is not low in the face of current difficulties and challenges. Whether the goal can be achieved in the future is testing Foshan Haitian Flavouring And Food Company Ltd(603288) 's wisdom and practice.
The reporter of the daily economic news tried to interview Foshan Haitian Flavouring And Food Company Ltd(603288) , contact the Secretary of the company and send an interview email as required. As of the time of publication, no reply has been received.
