On March 31, Lanzhou Zhuangyuan Pasture Co.Ltd(002910) ( Lanzhou Zhuangyuan Pasture Co.Ltd(002910) ) released its annual report for 2021. During the reporting period, the company achieved an operating revenue of 1.021 billion yuan, a year-on-year increase of 38.06%, a net profit of 535331 million yuan, a year-on-year increase of 412.11%, and a basic earnings per share of 0.23 yuan / share. The company plans to distribute a cash dividend of 0.47 yuan (including tax) to all shareholders for every 10 shares.
self owned pasture has the advantage of locking milk source
Milk source is the basis for the development of dairy enterprises, and the pasture link is the focus of the development of dairy industry chain. As the end demand of dairy products maintains a stable growth, in this case, dairy enterprises with their own farms will be more competitive.
According to public data, the number of dairy cows in China has fallen since reaching a new high of 8.75 million in 2007. On the one hand, the cost of raw and fresh milk is rising. Feed costs such as corn and alfalfa in the upper reaches continue to rise. On the other hand, China’s dairy industry is at the outlet of low-temperature milk, and this track has higher requirements for high-quality milk. In the context of tight supply of raw milk in China, the importance of mastering high-quality pastures has become increasingly prominent if dairy enterprises want to obtain greater development space.
According to the Lanzhou Zhuangyuan Pasture Co.Ltd(002910) annual report, by the end of 2021, the company had 8 standardized dairy farms in operation in Gansu, Shaanxi and Qinghai respectively, with 17573 cows in stock (including 9085 adult cows, 5748 adult cows and 2740 calves). The number of cows in stock was 9.19% higher than 16094 at the end of 2020; The proportion of high-yield dairy cows has been further improved by continuously optimizing the herd structure and improving the fine management level of the pasture business department. The output of fresh milk in 2021 is about 84668 tons, up 54.96% from about 54639 tons in 2020. In order to further improve the milk source quality of its own pasture from the source, the company’s pasture technology R & D center took the lead in fully launching the pasture digital management system in the first half of 2021, and the comprehensive, real-time and effective management of the pasture has been further improved.
The company’s 2020 non-public offering of A-Shares raised and invested project “Jinchuan District 10000 head dairy cow recycling industrial park project” has laid out the golden milk source belt, which has reached the expected usable state by the end of 2021. After the project is fully completed, it can provide 68000 tons of high-quality raw milk every year, which will effectively deal with the risks such as shortage of raw milk source or cost fluctuation.
It is worth noting that Lanzhou Zhuangyuan Pasture Co.Ltd(002910) completed the change of control of the company on June 29, 2021, the indirect controlling shareholder of the company was changed to Gansu Nongken group, and the actual controller was changed to SASAC of Gansu provincial government. The quality and yield of raw milk are closely related to the quality of forage. Gansu Agricultural Reclamation group has rich forage planting bases, highly organized and mechanized management teams and its own pastures in Hexi Corridor, one of the main milk producing areas in China. The company cooperated with the forage planting base under Gansu Agricultural Reclamation group in 2021. Its high forage quality has promoted the company to further improve the quality of raw milk in its own pasture.
During the reporting period, Lanzhou Zhuangyuan Pasture Co.Ltd(002910) “reconstruction and expansion project of daily processing 600 tons of liquid milk” won the title of national “high-quality milk engineering demonstration factory”, and its three ranches won the title of national “high-quality milk engineering demonstration Ranch”.
optimize product structure and pay attention to channel construction
During the reporting period, Lanzhou Zhuangyuan Pasture Co.Ltd(002910) closely followed the market demand, maintained consumers’ loyalty to the brand with continuously upgraded products, optimized the product structure, and increased the proportion of bus sterilized milk, sterilized milk and prepared milk products. Through the research on the consumption behavior of dairy consumers in the region, the company takes consumers as the guide to improve the optimal configuration of product formula, process and equipment, so that the products have targeted and characteristic advantages. The “0 + yogurt” series of “zero addition” and “Zero sugar” has achieved good market response after its launch; Pasteurized fresh milk, which can retain the active substances in milk to the greatest extent, is being loved and accepted by more consumers.
The company focuses on promoting the in-depth development of channels in Lanzhou, Qinghai, Xining, Shaanxi and its surrounding cities, focuses on responding to the changes of the above markets, and actively expands and consolidates the sales channel network from provincial capital to prefecture level cities, then to county-level cities, and finally to villages and towns. The in-depth advantages of the company’s product sales channels and the first mover advantage of entering the local market earlier make the company have a high market share in the local market.
In order to promote the distribution efficiency of the company’s low-temperature cold chain products, improve the “freshness” of the products as much as possible, consolidate and further build the differentiated competitive advantage of the company’s products, the company has established its own closed channels in Lanzhou market, such as community fresh milk kiosks, milk delivery to household system and self-service milk vending machines; Dongfang dairy strives to expand and consolidate the milk delivery system and directly supply high-quality cold chain products to end customers. The company will continue to strengthen its investment in the distribution of regional fresh products, and has begun to complete and implement the online subscription and offline self-service pickup system. The full implementation of the system can improve the convenience and service quality for users of cold chain products, improve the repurchase rate and customer stickiness, lock long-term orders, and further enhance the competitive advantage of its own closed channels.
Excellent business performance comes from the company’s adhering to the management layout of its own pasture and intensive cultivation in all links of the whole industrial chain for many years. The three-dimensional and diversified strategic pattern from milk source, food safety to technology research and development has strengthened the “moat” of Lanzhou Zhuangyuan Pasture Co.Ltd(002910) Lanzhou Zhuangyuan Pasture Co.Ltd(002910) since its establishment in 2000, it has won the titles of “user satisfaction products in Gansu Province”, “favorite dairy products for middle-aged and elderly people in Gansu Province” and “national key enterprises for township enterprises to create famous brands” by the Ministry of agriculture; The company’s products have won the titles of “Lanzhou famous product” and “Gansu famous brand” for many times; The ” Lanzhou Zhuangyuan Pasture Co.Ltd(002910) ” trademark of the company also won the title of “famous trademark of Gansu Province”. It was approved as a “national leading enterprise in the production of drinking milk” and was rated as a “national leading enterprise”. Dongfang dairy has won more than 60 national, provincial and municipal honors, and has been recognized as the “national designated production enterprise of student drinking milk”, the “leading enterprise of agricultural industrialization”, “excellent food leading enterprise” and “advanced collective” recognized by Shaanxi provincial Party committee and provincial government. “Manor concentrated milk”, as the star product of the company, was elected as the most influential product brand in Gansu Province in the first half of 2021.
