Raw material costs have fallen, and the performance of braised food giants has rebounded.

　　As of March 12, many listed braised food companies such as Huang Shanghuang, Juewei Food, Zhou Hei Ya, and Ziyan Food have disclosed their 2023 performance.

Compared with the cliff-like overall decline in 2022, the performance of braised food companies will recover on a large scale in 2023.

On the one hand, this is due to the recovery of offline store revenue, and on the other hand, it benefits from the drop in raw material prices last year, which lowered production costs.

　　Braised food performance rebounds

　　Compared with the cliff-like overall decline in 2022, the performance of the "Big Four" in braised food in 2023 has rebounded to varying degrees.

　　According to the performance report released by Huangshanghuang, its operating income in 2023 will be approximately 1.921 billion yuan, a year-on-year decrease of 1.7%; the net profit attributable to shareholders of listed companies will be approximately 70.59 million yuan, a year-on-year increase of 129.05%.

　　The profit warning issued by Zhou Heiya shows that the net profit in 2023 is expected to be 100 million to 115 million yuan, and the net profit in the same period of 2022 will be 25.3 million yuan, a significant year-on-year increase; the total revenue will be 2.7 billion to 2.75 billion yuan, an increase of 15.2% compared with the same period in 2022. %—17.4%.

Juewei Food did not disclose net profit, but disclosed operating income in 2023 of 7.2 billion to 7.3 billion yuan, a year-on-year increase of 8.71% to 10.22%.

Ziyan Food expects net profit in 2023 to be 323 million to 365 million yuan, a year-on-year increase of 45.6% to 64.53%; it will achieve non-net profit of 270 million to 305 million yuan, a year-on-year increase of 48.88% to 68.18%.

　　The reason why the performance of braised food companies has such a gap in one year is, on the one hand, the expansion of offline stores and the increase in revenue.

Since most of the revenue from braised products comes from offline stores, braised food companies will accelerate the opening of stores in 2023 and improve single store operations.

　　This is mentioned in corporate financial reports.

Huang Shanghuang mentioned in the announcement that it will accelerate the speed and quality of store expansion in 2023, and deepen the online + offline combined business model of "1+N" and "two sales and one long-term" by focusing on store construction, so that meat products The income of single stores of old stores in the processing industry has recovered year-on-year; Zhou Heiya also mentioned that the passenger flow of offline stores will increase in 2023 compared with the previous year, especially the business of stores in transportation hubs has recovered well.

　　According to statistics, as of the first half of 2023, the number of Juewei Food, Ziyan Food, Huang Shanghuang, and Zhou Hei Ya stores nationwide has reached 16,200, 6,137, 4,213, and 3,706 respectively.

　　Lower costs boost profits

　　The fall in costs is an important reason for the rebound in performance of various companies.

Thanks to the drop in prices of raw materials such as duck by-products in 2023, the profitability of braised food companies has improved, and profits and gross profit margins have been increased.

　　Since the second quarter of 2023, the price of duck by-products has begun to gradually decline.

Huang Shanghuang said that the prices of the main raw materials for duck by-products have fallen, and production costs have gradually fallen, which has led to a rebound in the comprehensive gross profit margin of meat products. In the third quarter of 2023, the comprehensive gross profit margin has increased by 3.87 percentage points year-on-year.

Ziyan Food also attributed the surge in net profit in its financial report to the fact that raw material prices during the reporting period were close to the range of previous years, and net profit increased significantly.

Juewei Food's third quarterly report shows that raw material procurement costs decreased in the third quarter compared with the previous quarter, and gross sales profit margin and net sales profit margin began to rebound in the third quarter.

　　Zhu Danpeng, a Chinese food industry analyst, said that it was previously expected that the profit level of braised food companies would gradually rebound in 2023.

He believes that the price of poultry is getting lower and lower due to the impact of the number of live pigs, which has a relatively good effect on reducing the cost of duck products.

The decline in raw material prices has brought cost advantages and profit dividends to the braised food industry.

　　However, although the drop in costs has brought back corporate profits, it also means that the rise and fall in raw material prices has a great impact on the profitability of braised food companies. Changes in raw material prices will have a profound impact on corporate performance.

　　This can be seen in the company's cost structure.

Ziyan Food mentioned that raw materials account for more than 80% of the main business costs. Everbright Securities research reports show that in the cost structure of braised food companies such as Juewei Food, Zhou Hei Ya, Huang Shang Huang, etc., raw materials generally account for 70%-80% .

From the perspective of the industry, it is still unknown whether the price of duck by-products will continue to decline in the future. Braised food companies cannot rely too much on the rise and fall of raw material prices, but should cultivate more resilient performance growth capabilities to cope with the risk of raw material price fluctuations.

　　Zhan Junhao, a strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, believes that the drop in prices of raw materials such as duck by-products in 2023 will directly lead to a reduction in the production costs of braised food companies, allowing companies to obtain higher gross profits and increase profit margins.

In addition, reduced costs allow braised food companies to offer more competitive prices in the market, attracting more consumers, thereby increasing market share and sales.

And the rebound in profitability provides companies with more cash flow, giving braised food companies the opportunity to invest, develop new products or expand the market.

　　However, whether the price of duck by-product materials will continue to decline in 2024 depends on a variety of factors, such as market supply and demand, seasonal changes, breeding costs, policy regulation, etc. Many factors are uncontrollable.

　　"Braised food companies should take timely measures to deal with the risk of raw material price fluctuations, such as establishing cooperative relationships with multiple suppliers to reduce dependence on a single supplier; locking in price contracts and signing long-term contracts with suppliers to lock in raw material prices and reduce future prices. rising risks; conduct reasonable inventory management, purchase and store a certain amount of raw materials when prices are low, and flexibly adjust product selling prices according to cost changes to maintain stable profitability. This requires companies to pay close attention to market dynamics and Have the ability to respond quickly." Zhan Junhao said.

　　Regarding the above issues, reporters from Beijing Business Daily contacted and interviewed related companies such as Juewei Foods, Zhou Hei Ya, and Huang Shang Huang, but had not received a reply as of press time.

However, Juewei Food revealed in a previous interview with reporters that the company has a complete procurement system that can reduce intermediate links, reduce procurement costs, and reduce the impact of raw material market price fluctuations.

When Huang Shanghuang accepted the survey, he said that the company will increase procurement efforts in the future, ensure safe reserves, lock in gross profit margins, and also pass on profits to franchisees and consumers through promotional activities.

　　Beijing Business Daily reporter Guo Xiujuan Zhang Han