Yangcheng Evening News reporter Hang Ying

　　Recently, BESTORE (603719) released its 2021 annual report.

During the reporting period, BESTORE achieved revenue of 9.324 billion yuan, a year-on-year increase of 18.11%.

As a snack company with a revenue of nearly 10 billion yuan, BESTORE is the second company after the three squirrels, but it only increases revenue and not profit.

According to the data, BESTORE lost 33.7104 million yuan in the fourth quarter of last year, which is the first time that BESTORE’s net profit has declined since its listing in February 2020.

Yesterday, BESTORE closed at 27.15 yuan. Compared with the glorious moment of 86.74 yuan in 2020, the market value is only nearly one-third of that at that time.

　　In fact, since 2018, the growth rate of net profit of BESTORE has been slowing down, and the growth rate of revenue in 2020 has dropped sharply.

Food safety problems that are difficult to eliminate, offline sales under the epidemic situation, and major shareholders have reduced their holdings... Where is the path for BESTORE with poor quality and light R&D?

　　Increased revenue but not profit last year

　　According to the financial report, BESTORE achieved revenue of 9.324 billion yuan last year, a year-on-year increase of 18.11%, and net profit attributable to the parent of 282 million yuan. In the fourth quarter of last year, the revenue was 2.755 billion yuan, and the loss was 33.7104 million yuan.

This is the first time BESTORE’s net profit has declined since its listing in February 2020.

　　Why didn't net profit grow with revenue?

BESTORE explained that last year, the company actively faced changes in the online business environment, rising prices of some raw materials, and the continuous impact of the multi-point spread of the epidemic. Deploy emerging traffic channels such as social (live) e-commerce and community e-commerce, increase marketing and promotion expenses, and increase the market share of all channels.

　　In addition, BESTORE related people believe that due to factors such as the increase in the proportion of online channels, the short-term decline in the gross profit margin of online business in the fourth quarter of last year compared with the same period was also the reason for the decline in the company's net profit compared with the same period.

　　Of course, this is not the first signal.

Judging from the financial reports in recent years, BESTORE urgently needs to boost its performance.

From 2018 to 2020, the total revenue of BESTORE was 6.378 billion yuan, 7.715 billion yuan, and 7.894 billion yuan, respectively, with year-on-year growth rates of 17.58%, 20.97%, and 2.32%, respectively, while the net profit attributable to the same period was 238.5 million yuan and 3.404 yuan, respectively. RMB 100 million and RMB 343.6 million, with year-on-year growth rates of 520.65%, 42.68% and 0.95% respectively.

　　Regarding the phenomenon that BESTORE's revenue does not increase, iiMedia Research Consulting analysts believe that snack food e-commerce mainly attracts traffic attention through innovative gameplay, thereby expanding sales.

However, as the cost of traffic is getting higher and higher, retail brands have gradually become "workers" of e-commerce platforms.

For example, a person from BESTORE said that due to the influence of the e-commerce sales model in recent years, the sales of snack food will increase significantly during the annual discounts and promotions such as "618", "Double Eleven", "Double Twelve", and "New Year's Day". As a result, the company's performance has fluctuated during the year.

Although the company achieved revenue of 2.755 billion yuan in the fourth quarter of last year, accounting for 29.55% of the annual revenue, it recorded a loss of 33.7104 million yuan in the quarter, which became a loss of money.

　　Wang Peng, an associate professor at the Gaoli Research Institute of Renmin University of China, told reporters that when a company expands all categories, or expands categories within a large range, it will inevitably bring about a relative decline in profitability.

According to the annual report, as of the end of last year, BESTORE had 1,555 SKUs, and 565 products were new last year.

Compared with the three squirrels of their peers who rely on reducing SKUs (inventory management units) to increase profits, BESTORE is obviously taking a diametrically opposite path.

　　Frequent food safety issues

　　As the "first stock of high-end snacks", BESTORE has frequently overturned in terms of product quality.

On March 15, a consumer complained on Black Cat that the pork jerky bought at BESTORE was moldy.

Coincidentally, on the same day, there were also complaints from consumers that worms were eaten in the almonds of the BESTORE.

　　It is not uncommon for BESTORE to receive similar food safety complaints on the Black Cat platform. Complaints such as "eating stones" and "eating hair" are not uncommon.

When reporters searched for relevant complaints on various complaint platforms, the number of complaints from BESTORE reached hundreds of cases, and the main problems focused on foreign bodies and deterioration in food.

This is not a single problem of BESTORE. The three squirrels were also caught in the food safety whirlpool.

　　The reporter learned that "OEM + OEM" is a common model for casual snack brands, but food safety issues under this model are not uncommon.

Chinese food industry analyst Zhu Danpeng analyzed last year: "The root cause of the three squirrels' frequent turmoil in public opinion in recent years is the production model of 'OEM + OEM', and most of their OEM factories have low configuration in terms of quality inspection and so on. of small businesses with frequent product issues.”

　　At the same time, in the capital market, BESTORE experienced multiple shareholder reductions last year.

On February 26 last year, BESTORE announced that the three shareholders of Zhuhai Hillhouse, Hong Kong Hillhouse and Ningbo Hillhouse planned to reduce their holdings through centralized bidding, block transactions and agreement transfers due to their own capital needs.

These three companies together accounted for 11.67% of BESTORE’s total share capital before its IPO, and the announcement released on August 28 last year showed a total reduction of 2.69%.

On October 8 last year, the three companies announced a new round of reduction plans.

As of January 17 this year, the three companies have accumulated 5.9118 million shares in the company through block transactions, accounting for 1.47% of the company's total share capital.

As of now, the reduction plan has not been completed.

　　Snack food competition is serious

　　With the upgrading of consumption, the snack food industry had high hopes.

According to the statistics of China Business Industry Research Institute, the size of China's snack food market exceeded 140 million yuan last year, with a compound annual growth rate of more than 10% in the past five years.

　　However, according to open source securities data, during 2020-2022, the online CR3 of snack food (the top three total in the industry) basically hovered at 15%-30%.

Not only online, according to the research report of Orient Securities, the overall market concentration of domestic snack food shows a slow upward trend. From 2012 to 2020, CR5 (the top five in the industry) increased from 16.50% to 17.30%, and CR10 (the top ten in the industry). total) increased from 26.60% to 26.90%.

　　It has a large scale in history, but the industry concentration is not high. It is not difficult to understand the reasons behind it.

Essentially, the product of snack food is not very different, resulting in serious homogenization competition.

Zhu Danpeng analyzed: "Now the overall gross profit of the casual snack market is low, and the pressure of homogenization competition is intensifying. The competition pressure is indeed increasing for BESTORE, but this is also a situation that the entire industry is facing. At present, offline business Resources are getting scarcer, rents are getting higher and higher, and online customer acquisition costs are getting higher and higher. More importantly, now costs are rising, and raw material prices are also rising.”

　　In this regard, in Wang Peng's view, enterprises must firmly control the upstream and downstream of their industrial chain. If they cannot control, the cost will rise infinitely.

"Only relying on the production model of 'OEM + OEM' has not grasped the core competitiveness, which has brought about a substantial decline in profitability and reputation."

　　In addition, Wang Peng said that in order to accurately understand the market, it is necessary to differentiate.

For BESTORE, for consumers in different regions, spending power and age groups, including social needs during the epidemic and non-epidemic periods, they can conduct targeted product research and development to build their own core competitiveness, rather than blindly competing in the same industry. copy.

　　However, from the financial report, BESTORE does not seem to attach much importance to R&D.

Data shows that the total R&D investment of BESTORE last year only accounted for 0.43% of its operating income, and the number of R&D personnel accounted for 1.45% of the company's total number of employees.

In contrast, sales expenses in 2021 will increase by 29.83% year-on-year.