01
turned from profit to loss
Continuing the decline in semi-annual report performance, Vitasoy’s performance revenue and net profit both declined in the 2021/2022 fiscal year.
According to Vitasoy’s financial report, as of March 31, Vitasoy’s annual revenue decreased by 14% to HK$6.501 billion. The loss attributable to the company’s equity holders was HK$159 million, while the profit earned last year was HK$548 million. , a year-on-year decrease of 129%.
Looking at regions, in mainland China, Vitasoy’s revenue fell by 23% in Hong Kong dollars, with an operating loss of 280 million yuan this year, a decrease from the profit of 457 million yuan in the previous year; regarding Hong Kong business, Vitasoy’s annual net sales The amount was HK$1.934 billion, an increase of 4% compared with last year. Operating profit fell 44% to HK$199 million; in Australia and New Zealand, Vitasoy revenue increased by 12% in local currencies; in Singapore, Vitasoy revenue increased in both Hong Kong dollars and local currencies. The annual operating loss was 2.198 million Singapore dollars .
Regarding the decline in revenue and net profit, the relevant person in charge of Vitasoy said in an interview with a reporter from Beijing Business Daily that the regional recurrence of epidemics has affected the supply chain and consumer side. plus the Chinese mainland market is the company's largest market. , sales in the first half of the year were weak, but sales in the second half of the year have improved.
At the same time, due to factors such as declining sales and rising raw materials, Vitasoy's gross profit and gross profit margin have declined to varying degrees. Data shows that Vitasoy's gross profit was HK$3.071 billion, a decrease of 22% compared with the gross profit of HK$3.954 billion in the 2020/2021 fiscal year; the gross profit margin also dropped from 53% last year to 47%. "The decline in gross profit margin was mainly due to a decline in sales performance. The decline in gross profit margin was mainly due to a decline in sales volume, an increase in sales mix, material costs, and higher promotion expenses." Vitasoy said in the announcement.
In fact, Vitasoy’s performance decline has already been revealed. As early as November 2021, the topic #Hong Kong Vitasoy’s half-year profit fell 95%# became a hot search topic. According to financial report data, in the 2022 fiscal year ending on September 30, Vitasoy’s net profit was HK$32.804 million, a year-on-year decrease of 95.1%. Among them, Vitasoy’s business in mainland China suffered a loss of HK$33 million.
"From a macro market perspective, Vitasoy's net revenue has declined. On the one hand, it is affected by weak market consumption this year and the weakness of beverage products; on the other hand, Vitasoy's plant milk and tea markets are homogeneous. Due to fierce competition and price wars, Vitasoy had to carry out promotions and lower product prices, resulting in a decline in profits," said Song Liang, an independent dairy analyst.
"From the perspective of Vitasoy itself, 's performance decline is mainly due to the aging phenomenon of the product line, which is out of touch with the needs of the most active young consumer groups. " Shen, chief strategist of Guangke Consulting, a subsidiary of the Guangzhou Academy of Sciences Moe said.
02
Is it feasible to raise prices to support performance?
Under pressure on performance, "price increase" has become a keyword repeatedly mentioned by Vitasoy.
" We have raised prices in some markets and will continue to selectively raise prices and adopt strict internal cost control measures to protect profit margins." Vitasoy said in its performance report outlook.
A reporter from the Beijing Business Daily inquired about the Vitasoy Tmall official flagship store and learned that as of press time, the highest-selling product in the store, "vitasoy Multi-flavored Soy Milk and Soy Milk Beverage Combo 250ml x 30 boxes", is priced at 84.9 yuan. , the average price per box is 2.83 yuan, while the same specifications of Doubendou's "Weizhen Grain Soymilk" and "VV Classic Original Soymilk" are priced at 2.65 yuan and 2.67 yuan respectively, both lower than Vitasoy.
Regarding Vitasoy's price increase, Shen Meng believes that currently, including the food manufacturing industry, there is an industry-wide increase in the cost of raw materials and other prices. In order to ensure normal balance of payments, companies have to increase prices to reduce the pressure. Passing on to downstream is not to expand the profit space on the original basis, but to try to ensure that the profit space does not shrink. However, price increases for non-rigid consumer goods will inevitably encounter the risk of declining demand, thus affecting performance.
Song Liang also said that fundamentally speaking, Vitasoy’s price increase is to absorb the cost pressure brought by rising raw material costs on the one hand, and on the other hand to improve its profit relationship with channels through price increases. But currently Vitasoy not only has to face competition from giants such as Yili and Mengniu in the plant milk market, but also has to deal with the squeeze from Master Kong, Nongfu Spring and others in the tea beverage field. These dragon companies are engaging in price wars through economies of scale and constantly lowering prices. At this time, the pressure on Vitasoy to increase its price cannot be underestimated.
Looking at the field of plant milk that started with Vitasoy, traditional brands such as Yangyuan drinks and OATLY continue to develop, while emerging brands such as Daily Box are also rising with the support of capital. Since 2020, Yangyuan Drinks has launched high-end products Six Walnuts 62430, "Six Walnuts +" series of products, etc.; on May 20, 2021, OATLY was listed on NASDAQ , raising funds Funding exceeds US$1.4 billion. In addition, according to incomplete statistics, at least 7 financing events have been completed in the plant-based beverage track since 2021, including emerging brands such as Daily Box and Cocoa Full Score.
"Driven by the trend of health concepts, plant protein beverages and tea beverage brands continue to introduce new ones. However, at present, the degree of differentiation between brands is not high, R&D and innovation are not clear, and competition is at a shallow level. level, so there is still a lot of blue ocean space to be developed, and each company needs to be down-to-earth to form a technological foundation with its own characteristics. Vitasoy is more of an accumulation of brand imprints, and it does not have more outstanding advantages in R&D and innovation. "Shen Meng said.
According to Zhu Danpeng, a Chinese food industry analyst, due to location restrictions and strategic drag, Vitasoy failed to reap the consumption dividends of early plant milk growth. As competition in the plant milk market intensifies, Vitasoy’s innovation and upgrading and The speed of iteration cannot keep up with the pace of consumption upgrades, resulting in its current continued decline in the plant milk market in mainland China.
Regarding how to boost the Chinese mainland market in the future, a relevant person in charge of Vitasoy said, " company will continue to launch new brand marketing activities and add a new product series to strategically enter emerging potential markets and seize new business opportunities. In addition, The company will also continue to selectively and gradually bring our products to more potential areas in mainland China."
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Beijing Business Daily reporter | Guo Xiujuan Wang Xiao
Picture source | Vitasoy Tmall official flagship store
