How do mask companies find new profit points when cross-border giants stop production and demand is expected to decline?

  Reporter Xu Jie Trainee reporter Zhang An

  Recently, the topic of "N95 Mask Oximeter Price Diving" appeared on Weibo hot searches. So far, the reading volume has reached 360 million times.

A reporter from "Securities Daily" checked the data of several e-commerce platforms and found that the unit price of some N95 masks has dropped to about 1 yuan.

  A number of people in the industry told reporters that with the optimization of epidemic prevention and control policies, many places have announced that they have passed the peak of the first wave of new crown infections, and it is expected that the market demand for masks will fluctuate significantly.

  In this context, what is the prospect of the mask market, how will relevant companies find new profit growth points, and will capital increase investment?

  Cross-border production mask company leaves

  Insufficient motivation for large companies to enter the market

  "Before the epidemic, the attention of masks in the industry was not high." Zhang Zhengnan, president of Yadu Group, told reporters that masks belonged to a very small category in the medical device industry. As far as the sales of Yadu Group's own products are concerned, masks contributed before the epidemic. Sales will not exceed 10% of the company's total sales.

  Zhang Zhengnan said that in recent years, the popularity of wearing masks in China has increased significantly.

From the perspective of "industry experience", the overall demand for masks in society has increased by nearly a hundred times compared with that before the epidemic.

  At the beginning of 2020, the supply of domestic mask production capacity was seriously insufficient. At that time, many leading domestic industrial companies quickly opened mask production lines and quickly achieved a daily production capacity of one million.

At the same time, there are also a large number of mask companies emerging.

  Tianyancha data shows that in 2020, related companies whose business scope includes masks and respiratory protection have increased rapidly, and more than 190,000 companies have poured into related fields, with an annual registration growth rate of 79%; in 2021, more than 250,000 related companies will be added. The annual registration growth rate reaches 59.2%; 312,000 new ones have been added since 2022.

As of December 31, 2022, there are 893,000 mask-related companies in my country.

  At present, among the leading industrial companies that have switched to producing masks across borders, many companies no longer produce masks.

An industry person who did not want to be named told reporters that although there are still orders to buy mask products, for leading industrial companies, the profit margin of mask products is too low.

For example, a company in the automotive field that previously produced masks across borders has dismantled the production line for mask products.

  Zhang Zhengnan also said that the gross profit margin of mask products is low, and the profit margin is not enough to cover the hard cost of technology and R & D invested by enterprises.

Therefore, there is insufficient motivation for large companies or capital to continue to invest in the mask market.

  Changes in market demand

  Mask companies need to transform and upgrade

  The above-mentioned industry insiders said that in the past three years, the mask industry has developed, but its industry characteristics of low cost, low profit, and low threshold have not changed.

Therefore, the entire industry still presents the characteristics of many, small and scattered.

  From the perspective of demand, before and after the Spring Festival holiday, the demand for returning home and traveling has greatly increased, and the demand for masks will remain high.

Zhang Zhengnan said that the overall order for masks before the Spring Festival is relatively sufficient, and a large number of families are actively stocking up.

However, after experiencing the peak demand of holidays, the total demand for masks will fluctuate sharply.

  "With the optimization and adjustment of domestic epidemic prevention and control policies, it is expected that the total demand for masks may drop sharply in 2023." Zhang Zhengnan said, "In the future, the mask industry will definitely undergo a large-scale transformation and upgrading, lacking its own channels. , No brand added value and mask manufacturers that cannot adapt to the current stage of product transformation and upgrading will gradually withdraw from market competition.”

  "In the future, the transformation and upgrading of mask companies will be adjusted around changes in market demand." Zhang Zhengnan told reporters that the supply and demand relationship in the mask market is in a situation of oversupply, and consumers' individual needs will be further satisfied.

In the future mask market, there may be subdivided product categories based on user gender, function, style and other needs, such as anti-hay fever, anti-virus and other mask products.

  Zhang Zhengnan said, "Only manufacturers that meet the individual needs of consumers can get more development opportunities in the environment of transformation and upgrading of the mask market."

  Yin Pengfei, a senior investment consultant of East High Technology, told the "Securities Daily" reporter that the supply side of the mask market is currently increasing in volume, but the growth prospects of the demand side are insufficient, and the industry barriers are low.

Therefore, it is difficult for the capital market to continue to be optimistic about the mask market.

(Securities Daily)