Photo source: Visual China
On March 30, Huangshanghuang (002695) announced the 2023 annual results report. The report shows that Huangshanghuang achieved annual revenue of 1,921 billion yuan. The year-on-year decrease was 1.70%, and the net profit to mother was 71 million yuan, an increase of 129.05% over the previous year.
Lan Jing Finance reporter combed through and found that this is already three consecutive years of negative revenue growth for Huangshanghuang. From 2021 to 2023, revenue was 2,338 billion, 1,953 billion, and 1,921 billion, respectively, with increases and decreases of -4.01%, -16.46%, and -1.70%, respectively.
Capital market pricing can reflect investors' expectations for the company's future. By the close of April 1, Huangshanghuang's stock price was only 8.38 yuan, down more than 70% from the 2020 high of 33.15 yuan.
Duck with sauce, which has always been popular, doesn't sell well
Huangshanghuang's main business currently includes the processing business of braised meat products with sauce and the business of rice products. It mainly includes the three major brands “Huangshang Huang”, “Zhenzhenlao” and “Dokujiao”. Among them, braised meat products are the most important source of revenue for the company, accounting for more than 76%. In 2023, the company's revenue for braised meat products fell 1.97%, which is the main reason for the decline in the company's revenue.
Currently, competition in the marinated food market is fierce. Huang Shanghuang is facing not only competition from large companies such as Juwei Foods, Zhou Hei Duck, and Ziyan Foods, but also the influx of new braised forces. Consumers have more and more brands to choose from, and taste preferences are becoming more and more difficult to grasp.
From the perspective of snack food, all kinds of roasted dried fruits, casual snacks, and even small street stores have become competitors to casual marinated products, competing for consumers' taste buds. The number of internal competition categories in the halide products industry is also increasing, divided into halogenated food products, various types of hot halide and room temperature braised snacks, etc.
Furthermore, the low concentration of the halogen products industry has also given room for other brands to develop. According to research by Guoxin Securities, the combined market share of the Big Three in the halide products industry is only 17%, of which Perfect Taste accounts for 9%. Zhou Heiya and Huang Shanghuang account for 5% and 3% respectively.
In order to improve the decline in revenue, Huang Shanghuang focused its expansion on opening new stores, raising prices, and youthful marketing.
Another plan to open 2,000 new stores within the year
On the store side, as of the end of 2023, the number of Huangshanghuang stores was 4,497, a net increase of 572 over the previous year, including 262 directly-managed stores and 4,235 franchise stores. Judging from the regional layout of stores, Huangshanghuang's store layout is concentrated in Jiangxi, Zhejiang, and Guangdong. The revenue of the three regions was 900 million, 369 million, and 298 million respectively, accounting for more than 80% of total revenue.
Huangshanghuang's management proposed opening 2,000 new stores in the 2024 business goals set for the company. The direction of store expansion is mainly deep cultivation of old markets and expansion of new markets, including deep cultivation of dominant old markets such as Jiangxi, Guangdong, Fujian, and Liaoning, as well as vigorous expansion around key new markets around newly built processing bases such as Shaanxi, Chongqing, Zhejiang, and Shandong.
This is the second year in a row that Huang Shanghuang has proposed such a goal of opening a store. In 2023, the company first proposed the goal of “opening 2,000 new stores”. By the end of '23, the company's goal of opening new stores had only reached 70% +.
In 2024, the company's management once again proposed a plan to open 2,000 new stores. Whether it can be successfully implemented will be tested over time. In terms of how to expand stores in the future, Huang Shanghuang said that it will adopt the “mother and child” store model to promote the transformation and implementation of regional monopoly standards, empower franchisees with regional monopoly, and help franchisees develop and grow.
It is worth mentioning that Huangshanghuang accounts for more than 94% of franchise stores, which has also brought about many food safety issues. Searching for the keyword “Huangshang Huang” on the Black Cat Complaints website showed that there were 537 complaints. The problems encountered by consumers include various problems such as acidity and compulsory sales of products such as duck neck.