Mengniu’s performance is not as good as it looks.
According to the recently released financial report, Mengniu achieved a revenue of 88.141 billion yuan in 2021, an increase of 15.9% over the same period; The net profit attributable to the parent company was 5.025 billion yuan, a year-on-year increase of 42.6%.
However, its decline was obvious in the second half of the year: during the period, the net profit decreased by 10.1% year-on-year to 2.08 billion yuan.
“Raw milk up”
By category, last year, Mengniu’s liquid milk revenue was 76.514 billion, an increase of 12.9%; The normal temperature white milk business maintained double-digit growth for five consecutive years, the net income of normal temperature liquid milk increased by 16% year-on-year, and the revenue of high-end white milk “terensu” exceeded 30 billion yuan. The low-temperature fresh milk business continued to expand its market share, with revenue increasing by 85% year-on-year, and the market share increased from 11.1% at the end of 2020 to 13.4%, of which the daily fresh language increased by 80%; With the overall decline of 7.6% in the low-temperature milk industry, Mengniu’s low-temperature revenue increased by 3% year-on-year, of which Youyi C brand increased by nearly 22% and lc37 series increased by 98%.
Mengniu milk powder business revenue of 4.949 billion yuan, an increase of 8.2%. Among them, Yashili realized a revenue of 4.435 billion yuan in 2021, with a year-on-year increase of 21.5%, and a net loss of 81.4 million yuan. If the impact of one-time impairment of Dumex trademark of 200 million yuan is excluded, the net profit is 118.6 million yuan.
Mengniu ice cream business revenue of 4.24 billion yuan, an increase of 61%. In 2021, the revenue of other businesses dominated by cheese business was 2.438 billion, with a year-on-year increase of 126%. In July 2021, Mengniu became the main shareholder of Shanghai Milkground Food Tech Co.Ltd(600882) company.
But from the time line, Mengniu’s growth is obviously under pressure.
In the second half of last year, Mengniu’s revenue increased by 9.7% year-on-year to 42.2 billion yuan, lower than 22.3% in the first half of last year; In the same period, the net profit decreased by 10.1% year-on-year to 2.08 billion yuan.
There are dual factors of cost and environment behind it.
According to the data of the Ministry of agriculture, the purchase price of raw and fresh milk in China remained high in 2021, with an average price of 4.29 yuan / kg, an increase of 13.2% year-on-year compared with 2020. Affected by this, Mengniu achieved a gross profit margin of 36.7% in 2021, a year-on-year decrease of 1PCT.
It is worth noting that, according to the 21st Century Business Herald reporter, according to the statistics of the Ministry of agriculture, the average purchase price of raw and fresh milk in the first half of 2021 was 4.26/kg, and the average purchase price of raw and fresh milk in the second half of 2021 was 4.32/kg. Costs have indeed risen.
In 2021, under the upward pressure of raw milk cost, Yili and Mengniu raised their prices one after another. The price increase of white milk is mostly about 5% – 10%.
“Repeated epidemic”
Another big reason comes from the consumption environment. With the recurrence of the epidemic, the consumption growth in the second half of the year is not optimistic.
Taking the third quarter as an example, in the middle and late July of last year, a cluster epidemic occurred in Jiangsu, Hunan and other places and quickly spread to many provinces. In August, the number of newly diagnosed and close contacts of covid-19 pneumonia reached the highest value since March 2020. The national migration scale index and congestion delay index of 30 provincial capitals once fell to the lowest level in the year, which had a significant negative impact on offline contact and cluster consumer industries.
According to the data of the National Bureau of statistics, the two-year compound growth rate of catering revenue in July and August of that year was 0.9% and – 5.8% respectively, and the two-year compound growth rate of total retail consumption of clothing, shoes and hats, needles and textile products was 2.4% and – 1.0% respectively, which was significantly lower than the previous value and the same period in 2019. Moreover, with the spread of the epidemic and the warming of prevention and control measures, in August, except for Chinese and Western drugs, culture, sporting goods and building decoration goods, the year-on-year growth rate of consumption of other categories fell by different ranges compared with the previous month, and the compound growth rate of consumption of many categories in two years showed negative growth for the first time in the year.
In the first half of the year, the sales of standard tea stores decreased by 2.2% compared with 202103 million in the first half of the year. In 2021, Naixue realized an adjusted net profit loss of 145 million yuan, a year-on-year decrease of 975.3%.
Mengniu is also making fee control adjustments. The proportion of advertising promotion expenses in sales decreased from 9.2% in the first half of 2019 to 4.6% in the second half of 2021.
On April 1, Mengniu closed at HK $43, up 1.9%.
