"Soy sauce Mao" has begun to cool down. Haitian Flavor Industry, which hopes to focus on the high-end market, may not be able to replicate the success of "Guiguwan".
text丨BT Finance Wuji
"Jingmao" stock price was cut in half.
Haitian Flavor Industry has been falling since its new high of nearly 220 yuan per share in early 2021. As of the close of June 20, the stock price was 83.70 yuan per share. At a higher level, the stock price fell by about 62%, and the market value has also evaporated by about 630 billion yuan.
Affected by the epidemic, consumer demand is sluggish, and coupled with multiple factors such as rising raw material prices, condiment companies are facing a severe market environment. As a leading company in the condiment industry, Haitian Flavor Industry, known as the "sauce-grass", also declined.
Haitian Flavor Industry's financial report shows that in the first quarter of 2022, it achieved revenue of 7.21 billion yuan, a slight increase of 0.72% year-on-year; net profit was 1.829 billion yuan, a year-on-year decrease of 6.36%, and non-net profit was 1.791 billion yuan, a year-on-year decrease of 5.49%. In addition to the slight increase in revenue, other important indicators have all declined to varying degrees, especially the soy sauce products mainly sold by Haitianwei, which achieved revenue of 4.076 billion yuan in the first quarter, a year-on-year decline of 0.53%.
This is the first time that Haitian Flavor Industry's revenue and net profit growth rate has declined to single digits since its listing in 2014.
Some media articles believe that the reasons for the decline of Haitian Flavor Industry are very complex. Changes in the sales and external economic environment have brought about weakening consumer demand. The fission of new consumption and new channels has brought new challenges to the condiment market. In addition, the prices of upstream materials continue to rise, and the production costs of enterprises are facing great operating pressure. Haitian Flavor Industry has not had a good life. Is this true?
decline is still continuing
In fact, there are signs of decline in Haitian Flavor Industry.
At the beginning of 2021, Haitian Flavor Industry's stock price ushered in a brilliant high of 220 yuan per share, but then fell all the way to hovering at the 83.70 yuan per share range (as of the close of June 20), and the stock price fell by about 62% at a higher level, which is very embarrassing for Haitian Flavor Industry, which once claimed to be "soy sauce".
According to Haitian Flavor Industry's financial report, as of March 31, 2022, Haitian Flavor Industry had about 176,800 shareholders. Based on this calculation, since the high level, the average loss per shareholder has been about 3.56 million yuan, which is not common in A shares .
2021 financial report shows that Haitian Flavor Industry achieved revenue of 25.004 billion yuan, a year-on-year increase of 9.71%, and net profit attributable to shareholders of 6.671 billion yuan, a year-on-year increase of 4.18%, and net profit excluding non-network was 6.429 billion yuan, a year-on-year increase of 4.09%.
Although Haitian Flavor Industry has achieved certain growth, the decline data is also impressive.
financial report shows that Haitian Flavor Industry's net operating cash flow was 6.324 billion yuan, a year-on-year decrease of 9.02%, and its ROE was 31.63%, a decrease of 4.5 percentage points from last year. Among them, the main product, soy sauce, achieved revenue of 14.188 billion yuan, an increase of 8.78%, accounting for 56.7% of the total revenue. In the first quarter of 2022, the revenue of soy sauce products accounted for 56.5% of the total revenue, and the revenue share declined slightly.
In addition, Haitian Flavor Industry's non-restricted net profit increased slightly by 4.09%, which is already a leader in the condiment industry. Among them, the net profit of many condiment companies has declined to varying degrees. Zhongju Hi-Tech 's non-restricted net profit in 2021 fell by 18.73% year-on-year, Tianwei Food's non-restricted net profit in 2021 decreased by 62.43% year-on-year, and Hengshun Vinegar Industry's non-restricted net profit in 2021 decreased by 62.28% year-on-year. Faced with a recession like condiments, Haitian Flavor Industry's rapid growth has slowed down and has begun to show signs of fatigue.
New retail Industry researcher Peng Hui pointed out that 2021 is a year full of twists and turns for the condiment industry. After experiencing multiple adverse factors such as the impact of the epidemic and the increase in raw material prices, the main task of the condiment industry in 2022 is to "recover", which not only restores the healthy development of the market, but also restores the confidence and vitality of the consumer market. However, upstream raw material prices are still at high levels this year, and the negative impact of the epidemic is still continuing. Overall, the "hard days" of the condiment industry will continue.
Peng Hui believes that compared with the past increase, Haitian Flavor Industry has shown signs of fatigue, and its net profit attributable to shareholders has shown a continuous decline in the past three years.Haitian Flavor Industry achieved total revenue of 22.792 billion yuan in 2020, an increase of 15.13% year-on-year, and net profit attributable to shareholders of 6.403 billion yuan, an increase of 19.61% year-on-year. The revenue growth in 2021 has declined by 6.5 percentage points compared with 2019, and the growth rate of net profit attributable to shareholders of 19.1 percentage points, which is mainly due to the intensification of the impact of the consumption environment.
The hardships under the epidemic
If you want to know how much impact Haitian Flavor Industry has suffered in the epidemic, first look at the sales composition of Haitian Soy Sauce.
Haitian Flavor Industry's catering channel accounts for as high as 60%, followed by consumers. That is to say, the catering industry contributes more than 60% of Haitian Soy Sauce's revenue, and household consumption is only a composition of less than 40%. However, from 2021 to the present, under the influence of the epidemic, many cities have banned dine-in, causing a large number of catering companies to be unable to operate normally. Even in cities where control is not strict, consumers' dining frequency has significantly decreased due to the epidemic.
Haitian Flavor Industry shows in the survey records that the proportion of restaurant opening business in 2021 is even far lower than in 2019, and among restaurants opening business, the attendance rate is almost not as high as before. The epidemic has caused a decline in demand for catering channels, and for companies like Haitian Flavor Industry that rely heavily on catering channels, the losses are huge.
new retail industry researcher Peng Hui believes that from Haitian Flavor Industry's financial report in 2021, it can be clearly seen that Haitian Flavor Industry's revenue growth rate will be single digits, which is enough to show that the condiment industry is not a fast-growing industry, and the net profit growth rate is lower than the revenue growth rate, which shows that Haitian Flavor Industry's cost on the raw materials side is difficult to control.
Haitian Flavor Industry also admitted in its financial report that the increase in raw material costs has affected the company's net profit. The original words are "The reporting period was an extremely difficult year. This year, the external environment has undergone great changes. The aftermath of the new crown epidemic has not subsided, consumer demand has weakened, prices of various raw materials have risen, community group purchase vicious competition, power and production restrictions have led to tightening supply, etc. The business environment of the company is complex and severe, and the company faces unprecedented challenges." The sluggishness in the channel of
, family consumers have affected their income due to the epidemic, which has led many consumers who prefer high-end soy sauce to choose alternatives. Consumer Li Juan told BT Finance: "I didn't care too much about Haitian being 10% or 20% more expensive than other brands, but now the revenue has decreased significantly. When purchasing, the price factor has to be considered. Once their product price is much higher than other competitors, they will definitely give up." The decline in
channels and the decrease in consumer demand for products have led to a gradual slowdown in Haitian Flavor Industry's growth. This low-speed growth continued to the first quarter of 2022, with a slight increase of less than 1%, and even other important indicators have declined to a certain extent. As the "No. 1" in the condiment industry, Haitian Flavor Industry's performance is almost a barometer of the condiment market.
Data shows that in 2021, the entire domestic condiment market will be about 400 billion yuan, and Haitian Flavor Industry's revenue will be 25 billion yuan, indicating that Haitian Flavor Industry's market share is about 6.3%, and it is still the "big master" of the industry. Such companies have a certain dominance and voice in the market, and their market share will continue to increase in the future.
"Haitian Flavor Industry is already the leader in the industry, but it is undeniable that Haitian Flavor Industry's growth rate has shown a straight downward trend. The performance in recent years has also made many investors feel doubtful. The falling stock price is the best proof." Wang Tao, a researcher at the catering industry, was surprised by Haitian Flavor Industry's recent performance. "From the initial fanatical pursuit to the current avoidance, Haitian itself has problems. Once the decline cannot be reversed as soon as possible, more capital may be withdrawn."
When talking about why Haitian Flavor Industry can still grow rapidly in the 2020 epidemic, Wang Tao believed that it was because the epidemic broke out, including in the second and third quarters of 2020, downstream channels were actively stocking up because they were afraid of not being able to buy it.
Wang Tao pointed out that the hoarding trend caused by the epidemic has stimulated short-term sales, which is beneficial to Haitian's short-term revenue growth. However, the consequence of the continuous and repetitive epidemic is that a large amount of hoarded goods have not been digested, the channels have no desire to consume, and the demand for the entire chain is weakening. If the epidemic cannot stabilize, it will definitely have a great impact on Haitian's later performance.
What’s worse is that the first quarter financial report shows that the net cash flow generated by Haitian Flavor Industry’s operating activities was -1.082 billion yuan, a year-on-year decrease of 779.75%. cash flow declined so outrageously. Haitian Flavor Industry responded that the reasons were the year-on-year increase in prices, the increase in procurement expenditure during the reporting period, the increase in accounts payable at the end of the previous year, and the increase in operating expenditures such as advertising fees and promotion fees during the reporting period. But no matter what the reason, this cash flow is extremely dangerous to the company.
ultra-high price-to-earnings ratio
Haitian Flavor Industry's ultra-high price-to-earnings ratio has been criticized by investors, and its price-to-earnings ratio once approached 120 times. Lu Yiming, an industry researcher at
, believes that it is very irrational to think that such a crazy price-earnings ratio is very irrational, and pointed out that Haitian Flavor Industry, with a price-earnings ratio of more than 100 times, is definitely not worth investing. "This is the result that capital wants to see, and it is also an irresponsible bubble blown out by unscrupulous fund managers with the money of shareholders. Although the price-earnings ratio of the condiment industry is generally high, I personally think that a price-earnings ratio of 30 to 40 times is normal." Lu Yiming gave his own opinion on the high price-to-earnings ratio of Haitian Flavor Industry. "More than 90% of the shares are in the hands of major shareholders. If you have high control over the market, you will naturally not be able to fall."
Combined with the average growth rate of Haitian Flavor Industry in the past three years, Lu Yiming believes that such performance growth rate is simply unable to support a 100-fold price-to-earnings ratio. Excessive valuation will inevitably lead to a decline in stock prices. "It is undeniable that Haitian Flavor Industry is an excellent company, the leader of the seasoning industry, basically no There are accounts receivable, but the price-to-earnings ratio may have overdrawn the performance of the next three to five years, and the excessive valuation will require a longer cost of holding time."
is compared with the price-to-earnings ratio at the same time on June 20. Haitian Flavor Industry's price-to-earnings ratio is 53.1 times, Zhongju Hi-Tech's price-to-earnings ratio is 39.5 times, and Hengshun Vinegar Industry's price-to-earnings ratio is 39.28 times. Compared with other listed condiments, Haitian Flavor Industry's price-to-earnings ratio has always been at a relatively high level.
"Under the impact of the epidemic, Haitian Flavor Industry's growth rate is the lowest in recent years, but it still has such a high price-to-earnings ratio, which undoubtedly makes investors feel worried. Even at this rate, in three years, Haitian Flavor Industry's price-to-earnings ratio will still be around 42 times, which is still the higher price-to-earnings ratio in the seasoning market." Lu Yiming expressed concerns about Haitian Flavor Industry's price-to-earnings ratio in the next three years.
high-end soy sauce competition is fierce
Haitian Flavor Industry's recent weakness is related to the obstacles in high-end soy sauce.
Haitian Soy Sauce is focusing on the high-end market, and with the gimmick of "spread for 180 days", it also brings it a certain brand premium. Among the products of the same category, Haitian Flavor Industry's soy sauce is already at a high level, and was once jokingly called "Moutai" and " Chivas " among soy sauce by consumers. However, in the condiment market, Haitian Flavor Industry is not only one that has deployed high-end soy sauce. Brands such as Xinhe, Luhua , and Qianhe are even earlier than Haitian Flavor Industry, and now they have occupied half of high-end soy sauce.
But Haitian Flavor Industry's competitors are not just these companies. Like Lee Kum Kee, Chubang , plus , etc., they are also strong competitors. Everyone wants to get a share of the high-end market. After all, the market size of high-end soy sauce has been nearly 100 billion. High-end soy sauce has begun to compete in advertising, with gimmicks such as "zero addition", "no preservatives", and "no MSG" being launched, and celebrities are invited to endorse it at a sky-high price. However, compared with high-end soy sauce that costs hundreds or even thousands of yuan per bottle, consumers prefer the price range of 10 yuan to 20 yuan per bottle (500ML).
, and this proportion can almost account for about 40% of the total consumption, and the sales of soy sauce per bottle of more than 20 yuan account for only about 20% of the total sales.It can be seen that those illusory gimmicks did not make consumers pay for it. Instead, huge advertising and marketing expenses and other expenses will lower the profit margins of companies, causing some strange phenomena such as increasing revenue but not increasing profits.
"Although I want to improve my life, as a condiment, I think it is not necessary to spend a high price to buy the so-called zero-addition high-end soy sauce. At present, most high-end soy sauces have not yet been able to establish their own brand. Many high-end soy sauces are varied in the market, which makes me afraid to choose." Wang Juan believes that consumers currently have a low awareness of high-end soy sauce brands and have not formed brand added value. High prices still require high marketing to support them. Most consumers still prefer more affordable soy sauces.
General Manager of Guangfu Supermarket Gao Guangfu introduced that most consumers do not buy into the so-called organic and zero-addition concepts, and high-end soy sauce can basically not be sold in reality. "High-end soy sauce that costs more than 30 yuan is almost ignored, and the repurchase rate is low. Even through discounts and promotions and other activities, high-end soy sauce is sold at a "not high-end" price." Gao Guangfu now no longer sells high-end soy sauce products in order to increase volume. "It can't sell it even when it is launched, and it also causes backlogs. High-end people will also go to special member stores to consume."
The price of high-end soy sauce as Gao Guangfu said is not high-end, which is not uncommon across the country. Many companies often sell at a 50% discount in order to destock or seize the market. In some e-commerce festivals, the price of online sales is even lower than "people-friendly". The maximum price of 500ml of Haitian Soy Sauce JD self-operated store is 44.9 yuan, but compared with the 25.9 yuan category, the sales volume is not the same.
Take Haitian soy sauce, straw mushroom umami soy sauce as an example. The 1.9L*6 bottle set, JD is priced at 155.9 yuan, but each bottle is 26 yuan, which is less than 7 yuan per 500ML. If you look closely, the price of other soy sauce brands for JD Haitian is roughly 7-20 yuan per 500ml, and it is rare for those above 20 yuan. The sales of soy sauces in other brands are similar. The maximum unit price of Lee Kum Kee 500ml soy sauce is 44.9 yuan, but the sales volume is also not ideal.
In Tmall flagship store , Qianhe high-end soy sauce discount promotion information can be seen everywhere, which also shows that the competition in the high-end soy sauce market is fierce beyond imagination. The price of high-end soy sauce is not high-end, which is not just an embarrassment for Haitian Flavor Industry, but a pain point in the entire seasoning market.
But Haitian Flavor Industry seems to be moving against the trend. At the end of October 2021, Haitian Flavor Industry announced that the ex-factory prices of several major categories of products increased by 3%-7%. The explanation given by Haitian Flavor Industry is that the rise in raw materials is obvious, and the water will only rise higher, and consumers will not have excessive reactions in price transmission. For example, the increase of soy sauce for 8 yuan per bottle increases to 9 yuan per bottle. Consumers are not too repulsive in their psychological acceptance, but this price increase is actually a price increase of more than 10%.
Faced with the increase in raw material costs and the increase in operating pressure, Haitian Flavor Industry once stated that it will not rule out the continued price increase of products in the future. But can blindly raise prices really solve the dilemma? The answer is not sure.
"Consumers are very sensitive to prices. If the price increases by more than 10%, will consumers not respond? I think this is unlikely. If the price increases exceed 20%, it will not only attract bad luck to the brand itself, but also lose many loyal old customers." Gao Guangfu believes that continuous price increases are undoubtedly a drinking poison to quench thirst, and will push consumers to their competitors in a fierce competition environment. "In the fiercely competitive high-end soy sauce market, if you take a wrong step, you will likely be wasted all your efforts, and it will be difficult to turn things around." Where can Haitian soy sauce go? There is a reason why many seasoning companies are focusing on high-end soy sauce. Referring to the consumption of soy sauce in Japan, South Korea and the United States, China's per capita soy sauce consumption is relatively low. Data shows that from 2006 to 2020, the per capita consumption of Chinese condiments increased from 5.7 kg/year to 10.7 kg. It has almost doubled its growth, but there is still a big gap with the United States, Japan and other countries.In 2020, the per capita consumption of condiments in China was only 52% of that in the United States and 45% of that in Japan. Among them, the expenditure of compound condiments in China was US$9.3 per capita per capita, which was only about 10% of that in the United States and Japan, and the market prospects were broad. In 2020, the penetration rate of of China's compound seasonings was 26%, while the penetration rate in the United States was 73.4% and Japan was 65.8%, and the penetration rate was seriously low. Compared with the soy sauce industry in developed countries such as Japan and South Korea, China's soy sauce industry is relatively backward in terms of brand influence and manufacturing technology, and the overall market is still far from that of developed countries abroad. Although the market has huge development potential, seasoning companies have failed to find a way to quickly expand their territory. Lu Yiming, an industry researcher at , analyzed that this is mainly determined by China's basic national conditions. Except for the first-tier cities in Beijing, Shanghai, Guangzhou and Shenzhen, China currently has the consumption capacity of high-end soy sauce, the consumption foundation of other second- and third-tier cities is not stable, and the consumption capacity and consumption habits of fourth- and fifth-tier cities and first-tier cities cannot match the consumption capacity and consumption habits of China's unbalanced economic development is a major shackle that restricts high-end soy sauce. Lu Yiming pointed out: "Consumption habits can be cultivated and changed, but the consumption capacity of third- and fourth-tier cities is difficult to match with the prices of high-end soy sauces. This is also the reason why many high-end soy sauces are mainly used in first-tier cities." From the perspective of China's seasoning industry, although Haitian Flavor Industry has rich products, it mainly covers the mid- and low-end markets, and there is still room for improvement in quality. Consumers position it as a mass consumer brand, but lacks high-end awareness, which requires Haitian to spend a lot of time and financial resources to create it. Other brands such as Qianhe and Lee Kum Kee will not be able to pose a threat to Haitian Flavor Industry in the short term due to their limited strength, but there is no possibility of "Guigu Wan" in the Chinese condiment industry. This Japanese soy sauce brand is synonymous with soy sauce internationally. It once occupied more than half of the US market share and also accounted for more than one-third of the market share in Japan. In contrast, Chinese condiments, whether it is Haitian, Chubang, or Qianhe and Lee Kum Kee, all have market shares below 10%. At present, high-end soy sauce is seriously "in-rolled". There is little possibility that China's "Kuke Wan" will appear in the short term. The positive is that the importance of Chinese consumers' families on health has increased year by year, and consumption concepts have gradually changed. Once the epidemic is stable and the economy recovers, the "soy sauce" market for high-end soy sauce is expected to achieve a breakthrough. However, in the current environment of repeated epidemics, it may be difficult for Haitian Flavor Industry to achieve high-end soy sauce for a long time. From the perspective of the industry, the condiment industry will continue to bear the pressure of improving profitability this year. In the unfavorable situation where the performance growth rate slows down and the stock price declines, Haitian Flavor Industry must adjust its business strategy to cope with the current severe test. Whether the high-end route is the only positive solution remains to be tested by the market. What is certain is that "soy sauce Mao" Haitian Flavor Industry has begun to cool down. #Haitian Flavor Industry# Welcome to follow [BT Finance] to read more exciting content. All rights reserved by , private reproduction is prohibited! If there is any infringement, please contact us to delete it. (A book card has been added here, please go to the Toutiao client to view)
