On January 18, Yike food, a leader in large poultry food, successfully landed on the gem. In this IPO, listed companies issued 44897960 shares, accounting for 10% of the total share capital after issuance. The issue price per share was 11.40 yuan, and the total amount of funds raised was 512 million yuan.
Yike food was established in 2008. Its main business has been gradually extended from the early poultry slaughtering and processing to now including four business segments: poultry slaughtering and processing, feed production and sales, commercial generation poultry seedling incubation and sales, and the production and sales of cooked food and conditioning products. From the perspective of the company’s top five customers disclosed in the past three years, they mainly include Juewei Food Co.Ltd(603517) , Wallace, Henan Shuanghui Investment & Development Co.Ltd(000895) , Zhou Heiya and other enterprises.
In recent years, with the change of industry competition situation and business development, Yike food is constantly extending the industrial chain. The raised funds will be mainly invested in six major raised investment projects to enhance the company’s profitability and market competitiveness. For the company’s development goal, Yike food emphasizes to build an ecological agricultural and animal husbandry food enterprise with a whole industry chain integrating variety breeding, breeding poultry breeding and incubation, commercial poultry technical services, feed R & D and production, poultry slaughtering and processing, conditioning products and cooked food.
covers four business sectors, accounting for 75.52% of the company’s revenue
According to the prospectus, Yike food is mainly engaged in poultry slaughtering and processing, feed production and sales, commercial poultry seedling incubation and sales, and the production and sales of cooked food and conditioning products. The main products include white striped duck, duck (chicken) leg, duck (chicken) wing and other duck and chicken slaughtering and processing products, feed products, commercial duck fry and chicken fry, cooked food such as duck neck and duck paw, as well as smoked duck breast, cumin duck leg and other conditioning products.
In 2018, 2019, 2020 and January June 2021, the revenue of Yike food was RMB 9.905 billion, RMB 15.554 billion, RMB 14.392 billion and RMB 7.724 billion respectively, and the net profit attributable to the parent was RMB 159 million, RMB 376 million, RMB 144 million and RMB 31.6741 million respectively.
After years of development, the company has become a large-scale leading enterprise of poultry food. Its main business mainly covers four business segments: poultry slaughtering and processing, feed production and sales, commercial poultry seedling incubation and sales, and the production and sales of cooked food and conditioning products.
Among the business segments, the products of slaughtering, conditioning and cooked food have the dual attributes of raw materials for industrial production and direct consumer goods. The feed and breeding poultry segments are mainly oriented to the breeding business of commercial chicken and duck, providing feed products, commercial chicken seedlings and commercial duck seedlings for farmers.
In terms of operation and management, on the one hand, all sectors are independent of each other and have the ability of independent external operation; On the other hand, due to the same meat and poultry industry chain, there is a certain degree of upstream and downstream linkage between business segments. Through good management of upstream and downstream linkage of the industrial chain, Yike food can obtain high synergy benefits, so as to effectively resist the operation risk of a single business link of the industrial chain.
From the perspective of revenue structure, the slaughtering sector is the main source of revenue of listed companies. In the first half of 2021, the slaughtering sector accounted for 75.52% of the company’s total revenue. The main products of the slaughtering sector are duck products and chicken products, which account for 47.33% and 28.19% of the total revenue in the first half of 2021 respectively.
In terms of regional distribution, the production area of the company is mainly located in Jiangsu Province and Shandong Province, and the sales area is mainly in East China. In the first half of 2021, the revenue in East China accounted for 70.25% of the total revenue of the listed company.
According to the list of top five customers disclosed by Yike food in recent years, the main major customers of listed companies include Juewei Food Co.Ltd(603517) , Wallace, Henan Shuanghui Investment & Development Co.Ltd(000895) , Zhou Heiya and other familiar companies. The cooperative relationship with Yike food is relatively stable, and the proportion of the top five customers in the total revenue of listed companies has been less than 20% in the past four years, and there is no dependence on a single major customer.
Affected by the change of supply and demand, feed price, epidemic situation and other factors, the prosperity of the poultry industry presents certain fluctuation characteristics. In recent years, although the company’s business scale has been expanding, the company’s business performance has also fluctuated due to the impact of industry fluctuations. According to the prospectus of Yike food, it is predicted that the revenue will reach 15.946 billion yuan in 2021, an increase of 10.80% over 2020, and the net profit attributable to the common shareholders of the company is predicted to be 106 million yuan.
the future increment of meat and poultry industry is expected
Although in recent years, affected by the epidemic, the performance of Yike food has shown some volatility, there is still a large market space from the perspective of industry development space.
According to the statistical bulletin on national economic and social development issued by the National Bureau of statistics over the years, the output of poultry meat in China increased from 17.51 million tons to 23.61 million tons from 2014 to 2020.
With the rapid growth of the overall scale of the industry, various links have also achieved varying degrees of development: in terms of upstream breeding birds, with the support of policies, Chinese enterprises have made a series of breakthroughs through technology introduction or self-research and development, gradually breaking the situation that some varieties of great grandparent breeding birds were completely monopolized by foreign companies in the past; In terms of commercial poultry breeding, with the changes of market supply and demand and competition pattern, the proportion of large-scale breeding has gradually increased. At the same time, the feed industry supporting breeding and commercial poultry breeding is also maturing. According to the Yearbook of China’s feed industry and the development overview of the national feed industry, China’s annual output of meat and poultry feed will be 91.758 million tons in 2020, an increase of 8.4% year-on-year.
In terms of the poultry slaughtering and processing industry in the middle reaches, as the link between the upper and lower parts of the industrial chain, the production efficiency has been continuously improved. On the one hand, the supporting facilities with the main breeding areas have been more perfect, on the other hand, the ability to respond to the personalized requirements of different downstream specifications, parts, time and dosage has been gradually improved, and the industrialization and scale have developed rapidly.
In the downstream cooked food processing industry, the development of cooking technology, the continuous enrichment of consumption scenes and the continuous innovation of product types. National brands have emerged in individual segments.
From 2017 to 2020, with the total poultry market increasing year by year, the output of Yike food poultry products grew at a growth rate higher than that of the industry, the market share grew from 4.27% to 5.46%, and the industry position was further consolidated.
According to the data of the National Bureau of statistics, China’s total population in 2019 (Note: including active servicemen in 31 provinces, autonomous regions, municipalities directly under the central government and the Chinese people’s Liberation Army, excluding the number of Hong Kong, Macao Special Administrative Regions, Taiwan Province and overseas Chinese) was 140.05 million. According to the calculation that all poultry meat produced in 2019 was digested by China, China’s per capita annual consumption of poultry meat was only 15.99 kg, There is a huge market space for the growth of poultry consumption in China.
From the perspective of industry trend, at present, with the country paying more and more attention to food safety, the attention to food safety is increasing; Duck meat consumption will further increase; The proportion of large-scale breeding was further increased; Industrial chain integration has become an important direction of industry development; With the help of capital, technology, scale and other advantages, some advantageous enterprises gradually extend to other links of the industrial chain, or directly build a full cycle production system of the whole industrial chain, or first form a diversified production enterprise of the industrial chain with multiple links and businesses, so as to stabilize the performance fluctuation of different sectors and maintain the market competitive position.
Industrial chain integration will become an important direction for the development of the industry. For the leading enterprises, they have the first mover advantage.
expand and strengthen industrial chain integration
In recent years, on the one hand, Yike food has been continuously extending the industrial chain of listed companies. With the change of industry competition situation and the business development needs of the company, the company’s business policy has gradually extended to end consumption, gradually entered the cooked food and prepared products business, and established a leisure food chain system. On the other hand, the company is also increasing investment in technology research and development.
As of the date of signing this prospectus, the company has 91 valid patents, including 14 invention patents, 73 utility model patents and 4 design patents. From 2017 to 2019, the company successively won the first prize of Jiangsu Agricultural Technology Promotion Award, the first prize of science and technology progress award of Shandong Academy of Agricultural Sciences, the first prize of the second Shandong scientific and technological workers innovation competition, the second prize of Shandong science and technology award, the first prize of national agriculture, animal husbandry and fishery harvest award and many other awards. In terms of financial indicators, the proportion of R & D investment in operating revenue is gradually increasing.
With the success of this IPO, Yike food will raise funds mainly for six major raised investment projects. These include the meat and duck slaughtering line construction project of Shandong Yike Food Industry Co., Ltd., the meat and duck slaughtering line construction project of Jining Zhongke Food Co., Ltd., the cooked products construction project of Shandong Zhongke Food Industrial Park, the expansion of 20000 tons of poultry cooked food, the digital construction project of Yike food supply chain and the supplement of working capital.
Listed companies said that the fund-raising investment project is based on the company’s existing business, further improve the company’s technology and equipment level, increase investment in technology, improve the ability to serve customers, expand the original business scale, improve market share, and extend to the downstream to enhance the company’s profitability and market competitiveness.
At present, the development goal of Yike food business is to steadily expand the production and operation scale of enterprises and create good economic and social benefits by adhering to the market-oriented, industrialized operation as the guidance and relying on agricultural high and new technology. Build a whole industry chain ecological agricultural and animal husbandry food enterprise integrating variety breeding, breeding poultry breeding and incubation, commercial poultry technical services, feed R & D and production, poultry slaughter and processing, conditioning products and cooked food.
In order to achieve this development goal, the company puts forward the development strategy for the current and the next three years, tries to implement effective organization for various industrial elements of the poultry industry chain, closely contacts the upstream and downstream partners of the industry chain, and constructs the main industry of livestock and poultry production and processing. In terms of operation and management efficiency, build a more effective organization and management mode, use digital technologies such as Internet of things and management software to improve management and work efficiency, build a digital system from seedling to consumption, and share the operating benefits of digital decision-making to the company and partners; In terms of lean production, we rely on mechanized and systematic methods such as technical improvement, equipment improvement and system improvement to improve operation efficiency and promote the intellectualization of factory production process; In the construction of ecological agriculture, accelerate the application of new technologies and promote the harmonious development of industry and nature.
