Qianhe Flavor Industry performed dazzlingly: differentiated competitive advantages are highlighted, and product matrix is ​​becoming more and more perfect

time:2022-09-29 07:13:45 source:clevelanddrifters.com author:Aviation stock
Qianhe Flavor Industry performed dazzlingly: differentiated competitive advantages are highlighted, and product matrix is ​​becoming more and more perfect

Recently, Qianhe Flavor Industry released its semi-annual report. In the first half of this year, the company's revenue was 1.015 billion yuan, a year-on-year increase of 14.56%; its net profit was 119 million yuan, a year-on-year increase of 80.56%. Net cash flow from operating activities was 257 million yuan, an increase of 4.6 times year-on-year. Qianhe's outstanding performance is related to the company's continuous creation of high-quality healthy products and increasingly prominent differentiated competitive advantages. What is more noteworthy is that Qianhe has also strengthened its R&D investment, continuously improved its high-quality product matrix, and optimized its production capacity layout, laying a solid foundation for its continued high growth in future performance. High-quality condiment leader: differentiated competitive advantages are highlighted Qianhe Flavor was established in Meishan, Sichuan in 1996 and listed on the Shanghai Stock Exchange in 2016. At present, Qianhe Weiye has grown into a high-quality condiment brand manufacturer specializing in brewing high-quality healthy soy sauce, vinegar and cooking wine in China. In recent years, the performance of Qianhe Flavor has continued to grow. In 2017, the company's revenue was 948 million yuan. By 2021, this figure has risen to 1.925 billion yuan. In four years, the company's revenue has increased by as much as 103.05%; in the same period, net profit has also achieved substantial growth. The continuous improvement of performance is related to the company's continuous strengthening of differentiated competitiveness. The epidemic has brought people’s attention to health to an unprecedented height. In the post-epidemic era, the prevention and control of health emergencies will become normalized, and consumers’ attitudes and consumption habits towards dietary and nutritional supplements will change accordingly. New trends in the development of the food industry. Qianhe has always been committed to creating high-quality healthy condiments. The company adheres to the brand concept of "making safe food and brewing better taste", focusing on zero-added brewing of high-quality healthy condiments such as soy sauce, vinegar, cooking wine, etc. Grasp the trend of consumption upgrading, lead consumer demand, and form a unique and differentiated brand competitive advantage. At present, Qianhe Flavor Industry mainly faces the C-end in terms of sales, and is relatively less constrained by the price. Therefore, the company focuses on high-end products that are more suitable for the C-end in the dislocation competition. According to the products on the shelves of various brands in Tmall Mall, Qianhe has a total of 6 types of soy sauce on the shelves, all of which are high-end products priced above 15 yuan. The layout of high-end products is still the main price positioning of Qianhe Flavor Industry. Combined with the product strategy of focusing on zero addition , directly avoiding the competition of low-end seasonings and creating a more stable development environment. What is more noteworthy is that the mid-to-high-end product positioning has provided better support for the company's profitability. Since 2018, the company's gross profit margin has always ranked among the top companies in the same industry. According to the Western Securities Research Report, the company focuses its strategic resources on the zero-addition series, highlights the zero-addition brand color in packaging design and advertising, and continues to deepen brand symbolization; the company's flagship zero-addition products are in line with the trend of consumption upgrades and are expected to strengthen the company's presence in Competitive advantage in the industry. Continue to strengthen R&D investment: The product matrix is ​​improving day by day, and the differentiated competitive advantage of Qianhe Flavor is becoming more and more prominent, which is also related to the company's continuous strengthening of R&D investment and continuous introduction of high-quality products. In recent years, the company's research and development expenses have continued to increase. In the first half of this year, the company's research and development expenses were 29.0507 million yuan, a year-on-year increase of 28.12%. In the past three years (from 2020 to the end of June 2022), the company's research and development expenses totaled 130 million yuan. At present, the company has set up a research and development center, which is responsible for the research on microorganisms and additives, and has obtained 81 patents including low-salt diluted fermented soy sauce, and 4 provincial scientific and technological achievements. In addition, the company pays attention to the research and development of production technology and technology, continuously improves the level of production technology, has advanced production equipment and testing methods, has passed ISO9001 quality management system, organic products and other certifications, and obtained Sichuan famous brand products, Meishan municipal government Quality awards and other honors. Qianhe's zero-addition soy sauce means that it does not use monosodium glutamate, pigments, and preservatives, but only water, non-GMO soybeans, wheat, and edible salt are brewed; brewing zero-addition products requires a high level of craftsmanship. In fact, in addition to zero additions, Qianhe also focuses on the brewing process of "ancient method and new brewing" to highlight its high-end quality. In the selection of soy sauce raw materials, defatted soybeans (soybean meal) with higher cost performance and higher protein content are used than soybeans with higher price and oil content. In the fermentation process, the traditional low-salt solid-state fermentation takes a short time, but the ester fragrance is relatively light. Qianhe soy sauce adopts high-salt dilute fermentation in the fermentation, and takes a longer brewing time to enhance the fusion flavor between the ingredients. In this context, Qianhe continues to launch high-quality products, and the product matrix is ​​becoming more and more perfect. In the field of soy sauce, Qianhe Weiye adheres to the concept of high quality and health, and has formed and consolidated the positioning of "zero-addition as the core, supplemented by high-fresh products", and has created zero-additive, organic and high-freshness series, zero-additive series Covering high-end health needs; the high-fresh series covers the waist price band, catering to traditional consumers who emphasize cost performance and umami; in addition, some mid-to-low-end products are also stationed in community group buying and other channels, covering consumers who emphasize the ultimate cost-effectiveness. In terms of vinegar, there are few brands that have introduced zero-added vinegar in the industry. At present, Qianhe's main vinegar product has zero-added vinegar for 3 years. Compared with products in the same industry, the company has both product positioning and price. Advantage. In the first half of this year, the company's main product revenue increased steadily, including soy sauce product revenue of 604 million yuan, a year-on-year increase of 10.47%; vinegar product revenue of 174 million yuan, a year-on-year increase of 19.81%. The demand for high-quality products continues to grow, and the industry position is further consolidated. The condiment industry has the property of rigid demand and is cyclical. China's food culture has a long history, a vast territory, different food tastes in different places, and a large space for the development of the industry. According to Euromonitor data, from 2007 to 2021, the size of China's condiment market will increase from 44.908 billion yuan to 149.134 billion yuan, with an average annual compound growth rate of 8.95%. From the perspective of various molecular fields, the sales of soy sauce category market in 2021 will be 88.895 billion yuan, accounting for 59.61% of the condiment market, making it the largest category in the condiment industry. In the soy sauce category, the growth in sales in recent years has mainly come from the increased demand for high-quality products in the industry. According to Euromonitor data, from 2016 to 2021, the average sales price of soy sauce in China will increase from 14,700 yuan/ton to 17,800 yuan/ton, with an average annual compound growth rate of 3.86%. Mainly due to the continuous improvement of the industry product structure, the rapid increase in volume of high-end categories such as high-fresh, zero-added, and salt-reduced products, the upgrade of product structure pushed up the industry average price. In addition, the vinegar market has also entered the fast lane of development. According to statistics from the China Condiment Association, there are 37 vinegar companies in China's top 100 condiment companies in 2020, with a vinegar output of 1.6 million tons and a total sales revenue of 5.6 billion yuan. According to the Western Securities Research Report, before 2019, the overall growth rate of the vinegar sub-industry was faster than that of the condiment industry. Affected by the epidemic in 2020, the scale of the industry has declined. As the impact of the epidemic gradually weakens and the brand awareness of superimposed consumers increases, it is expected that the market size of the vinegar industry is expected to rebound. As the main product of high-quality soy sauce, vinegar, cooking wine and other products, Qianhe has shown its advantages in this round of consumption upgrade demand. According to the Western Securities Research Report, Qianhe, as the first brand of zero-addition, has invested a lot of marketing resources over the years, and has successfully deeply bound the brand image with the concept of zero-addition, and has strong brand power and customer stickiness. We believe that when Haitian and other soy sauce leaders enter the zero-addition market, the greater role lies in consumer education, which is conducive to the expansion of the industry. long-term steady growth. The continuous expansion of production capacity of Qianhe has also laid a solid foundation for its future performance. At present, the company's "250,000-ton brewed soy sauce and vinegar production line expansion project" has been completed and put into operation in early 2021, adding 200,000 tons of soy sauce production capacity and 50,000 tons of vinegar production capacity. In November 2020, the company changed the original "360,000 tons of seasoning production line project" (annual output of 300,000 tons of soy sauce, 30,000 tons of oyster sauce, and 30,000 tons of soy sauce) to "annual output of 600,000 tons of seasoning intelligent manufacturing project" (annual output of 500,000 tons of soy sauce and 10 tons of cooking wine), 200,000 tons of soy sauce + 100,000 tons of cooking wine and 300,000 tons of soy sauce production capacity will be put into production in 2023 and 2025 respectively. The layout of the simultaneous development of the three industries. In the context of consumption upgrading and the continuous improvement of Chinese people's health concept, Qianhe Flavor Industry will continue to expand the differentiated competitive dividend effect of high-quality healthy products by strengthening research and development, and the company's future performance is full of imagination!

(Responsible editor:Individual stock recommendation)