With another loss in the first quarter, can Quanjude turn over by pre-made dishes?

　　China-Singapore Jingwei, April 30 (Lei Zongrun) On the evening of April 28, Quanjude released its first quarterly report for 2022.

According to the financial report, in the first quarter of 2022, Quanjude achieved revenue of 214 million yuan, a year-on-year increase of 4.04%; a net loss of 47.2855 million yuan, a year-on-year increase of 0.43%.

　　According to the annual report released on the 22nd, Quanjude achieved revenue of 948 million yuan in 2021, a year-on-year increase of 20.99%; the company only achieved profit in the second quarter, with a loss of 157 million yuan for the whole year, compared with a loss of 262 million yuan in 2020 Yuan, reducing the loss by 40.07%.

However, it should be noted that since 2020,

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Source: Quanjude official website

　　Quanjude, which went public in 2007, reached its peak in 2012.

According to Wind, Quanjude achieved revenue of 1.944 billion yuan in 2012, just over 56 million yuan away from the "2 billion revenue" mark.

But since then, Quanjude's revenue has remained in the range of 1.8 billion to 1.9 billion yuan.

Since 2018, Quanjude's revenue has dropped sharply. From 2018 to 2020, the year-on-year revenue decline has reached 4.48%, 11.87% and 49.99% respectively.

In 2020, Quanjude's revenue was only 783 million yuan, which fell below the "1 billion" mark.

Loss of profit for three years in one year, closing 12 stores

　　Sino-Singapore Jingwei combed Quanjude's financial reports over the years and found that Quanjude's performance has declined continuously in the past five years, and only achieved growth in 2021.

Specifically, from 2017 to 2021, Quanjude achieved revenue of 1.861 billion yuan, 1.777 billion yuan, 1.566 billion yuan, 783 million yuan and 948 million yuan respectively.

China-Singapore Longitude and Weft Mapping of Quanjude's Operating Income from 2017 to 2021

　　From 2017 to 2021, the net profit attributable to the parent was 136 million yuan, 73 million yuan, 45 million yuan, -262 million yuan and -157 million yuan, respectively.

That is to say, in 2020 alone, the total profit of the first three years will be lost, and the loss in 2020 and 2021 will reach 419 million yuan.

2017-2021 Quanjude's net profit and operating cash flow

　　Among them, the net cash flows from operating activities from 2017 to 2021 were 224 million yuan, 80 million yuan, 69 million yuan, -151 million yuan and -88 million yuan.

In the face of continuous losses, the safety of cash flow is a problem that Quanjude has to face.

　　Behind the loss is the loss of customers.

Since 2017, the number of guests received by Quanjude has been declining year by year. From 2017 to 2019, the number of guests was 8.0407 million, 7.7047 million and 6.5892 million respectively. In just two years, the number of guests dropped by nearly 1.5 million.

In the face of the continuous decline in the number of guests,

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　　The performance is dismal, customers are lost, and the number of stores in Quanjude is also decreasing.

At the end of the 2021 annual report reporting period, the company has a total of 109 catering stores, including 42 directly-operated stores, 67 franchise stores (including 7 overseas franchise stores), and 2 food processing companies.

At the end of 2020, the company had a total of 117 catering stores.

Since 4 new stores will be opened in 2021, that is to say, 12 stores will be closed in Quanjude in 2021.

　　It is worth noting that among these 109 stores, not all Quanjude brands are well-known to consumers, including 1 imitation restaurant brand store, 5 Fengzeyuan brand stores, and 4 Sichuan hotel brand stores.

According to the annual report, these three brands have become Quanjude's brands as early as 2004, and Quanjude will integrate them in 2021 to form a multi-brand matrix.

In addition to the multi-brand catering business, Quanjude also owns 2 food processing enterprises, which are mainly responsible for the research and development, production and sales of duck blanks and other foods.

　　From the perspective of revenue composition, in 2021, Quanjude’s catering business revenue will be 700 million yuan, a year-on-year increase of 32.16%, with a gross profit margin of -5.03%; commodity sales revenue will be 228 million yuan, a year-on-year decrease of 4.26%, with a gross profit margin of 20.07%.

　　Quanjude said in its annual report that fluctuations in performance are related to the repeated uncertainty of the epidemic.

At the same time, as a century-old catering brand, Quanjude is also actively exploring multiple channels such as store scene transformation, dish innovation, pre-made dishes, group meals, etc., in order to cope with the impact of the epidemic and fully promote the company to turn losses into profits.

R&D expenses increased by 91.47%, time-honored brands want to stand on the "window" of pre-made dishes

　　In the face of declining performance, Quanjude is striving for "newness".

In 2019, Zhou Yanlong was parachuted from his brother company Donglaishun to Quanjude as the general manager, and was regarded by the market as being in danger.

After Zhou Yanlong took office, Quanjude began to move closer to new consumption and new retail.

　　In terms of product research and development, Quanjude has greatly increased its investment.

The annual report shows that in 2021, Quanjude's research and development expenses will reach 2.9163 million yuan, a year-on-year increase of 91.47%.

In 2017, its R&D investment was only 564,900 yuan. In

From 2017 to 2021, Quanjude's R&D investment in Sino-Singapore latitude and longitude mapping

　　According to the annual report, Quanjude’s research and development expenses are mainly used in two major sectors, one is the research and development of innovative dishes such as “special dishes” and “warm dishes”, and the other is the research and development and launch of pre-made dishes.

　　According to Quanjude, pre-made dishes have become a popular product with high market attention.

According to market analysis, the scale of China's prepared vegetables industry is estimated to be 345.9 billion yuan in 2021, a year-on-year increase of 18.1%. It is expected that China's prepared vegetables market will maintain a rapid growth rate of around 20% in the future.

　　In the prefabricated dishes sector, Quanjude said that it will launch multi-brand prefabricated dishes including Quanjude, Fengzeyuan, Sichuan Restaurant, etc. Among them, Sichuan Restaurant brand prefabricated dishes will be launched soon, and other brands of prefabricated dishes will also be listed one after another.

Quanjude said that it will enter the prefabricated vegetable market with the advantages of time-honored brands and promote the food-oriented process of catering products.

　　Quanjude said that the foodization of catering products is a key investment project of the company. At present, it has obtained production license audits for thermally processed cooked meat products and prefabricated prepared meat products.

As of the end of December 2021, Quanjude has launched more than 10 new types of cooked food products and three New Year's Eve gift boxes in Fengzeyuan, and launched the Quanjude handmade roast duck gift box on October 21, with sales of 27,700 pieces as of January 9. During the period, well-known anchors brought goods live, and the income of a single live broadcast exceeded one million.

　　In terms of marketing, in addition to inviting anchors to bring goods, Quanjude uses social media platforms to promote product promotion and content marketing with tweets and short videos around new products and important festivals.

During the Spring Festival, it cooperated with brands such as Yuanqi Forest and Hema, and launched a variety of co-branded New Year's Eve gift boxes, which sold well.

In 2021, the online platform exposure of Quanjude direct stores will reach 41.8945 million, a year-on-year increase of 82.4%.

Can Quanjude's transformation be successful?

　　As a time-honored high-end catering brand, Quanjude is faced with the problem of how to stimulate the vitality of the time-honored brand, seize new consumer groups, and keep up with new consumption trends.

　　Quanjude's transformation began before Zhou Yanlong took office.

According to media reports, on April 12, 2016, Quanjude announced "Embrace the Internet and Embracing Young People", one of which is to launch a takeaway business.

　　Quanjude stated in the annual report that the company, Chongqing Crazy Grass Technology Co., Ltd., and Beijing Dake Information Technology Co., Ltd. jointly invested and established Yage Technology, focusing on creating new products, new brands and new formats of "Quanjude and National Classic Food + Internet" and new models to explore new models of the Internet takeaway market.

　　According to the annual report, Yage Technology lost 13.4404 million and 4.1515 million in 2016 and 2017 respectively.

In April 2017, Yage Technology ceased operations because it did not meet business expectations, and entered bankruptcy and reorganization in December 2019.

According to Tianyancha, Yage Technology has been cancelled on April 20, 2021.

　　Regarding the failure in the take-out business, Chinese food industry analyst Zhu Danpeng believes that Quanjude is not suitable for take-out. Take-out is mainly for the resident population and young people, but

　　How about the Quanjude cooked food products and gift boxes that have been launched?

In the e-commerce platform, Sino-Singapore Jingwei found by searching the Quanjude flagship store.

The Quanjude handmade roast duck gift box, launched in October 2021, has sold more than 10,000 orders.

However, some consumers made negative comments due to problems caused by transportation and storage, and some consumers were also dissatisfied with the taste and flavor of the packaged roast duck.

Source: Screenshot of the official flagship store of Tmall Quanjude

　　It is worth mentioning that Quanjude’s offline stores have also received negative reviews from consumers due to high service fees and dish prices.

According to media reports, in

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Zhou Yanlong said bluntly in an interview with the media, "Companies have indeed reached the point where they have to change, and we cannot become the enemy of consumers."

　　Whether it is the innovation of dishes, the foodization of catering products or the upcoming pre-made dishes, Quanjude hopes to move closer to new consumption and new retail through innovation and transformation, so as to solve the current predicament and seek a way for future development.

　　In response to the current predicament of Quanjude, Chinese food industry analyst Zhu Danpeng said to Sino-Singapore Jingwei, "Quanjude's problem is not only the epidemic and the decline of brand power, but more of a problem formed by the aging of the entire company system and mechanism. Product aging, The aging scene, aging service, and aging team are the most terrifying things." From the external environment, the consumption behavior and consumption concept of the new generation have changed a lot, and Quanjude still needs to speed up the pace of innovation and keep up with the new generation. Changes in the consumer environment.

(Sino-Singapore Jingwei APP)

(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, and you need to be cautious when entering the market.)

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