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On August 29th, Caixin reported that the decrease in raw material prices has not yet been transmitted to the cost side, causing chongqing fuling zhacai group's (002507.SZ) performance to slow down in the first half of the year. At the same time, the company provided credit limits to major customers in the first half of the year to increase the market share of its products, resulting in a growth of over 8 times in accounts receivable at the end of the period compared to the previous year.

After the market closed today, chongqing fuling zhacai group released its 2024 half-year report. In the first half of the year, the company achieved revenue of 1.306 billion yuan, a 2.32% decrease year-on-year; net income attributable to the parent company was 0.448 billion yuan, a 4.74% decrease year-on-year; and net income attributable to the parent company after deducting non-recurring items was 0.425 billion yuan, a 1.62% decrease year-on-year.

On the revenue side, except for pickled vegetables, the income of other product categories has declined to varying degrees. Among them, pickled vegetable revenue was 1.118 billion yuan, a 0.49% increase year-on-year; radish revenue was 23.9609 million yuan, a 39.42% decrease year-on-year; kimchi revenue was 0.129 billion yuan, a 6.24% decrease year-on-year; and the income of other product categories was 33.436 million yuan, a 25.94% decrease year-on-year.

In a highly competitive market, chongqing fuling zhacai group provided credit limits to major customers to increase its market share, but it also led to a significant increase in accounts receivable.

The financial report shows that the company's accounts receivable at the end of the period was 98.4888 million yuan, an 837.72% increase compared to the end of last year. The company explained that in order to improve competitiveness with competitors and increase the market share of its products, it provided appropriate credit limits to major customers, who used the limits during the year (recovered at the end of the year).

At the same time, the high-priced raw materials from last year continue to have an impact on the profitability.

According to Chongqing Fuling Zhacai Group, the main raw materials, such as cabbage and semi-finished zhacai, were affected by market supply and demand, and the prices decreased by about 32% and 26% year on year in 2023, respectively. However, in terms of profitability, the company's gross margin for its main products in the first half of the year was 50.87%, a decrease of 2.2 percentage points year on year, with the gross margin of the zhacai category decreasing by 2.36 percentage points year on year.

Today, a reporter from Cailian Press called the company's securities department and learned that the raw materials purchased this year will be gradually put into use in May and June, and the company mainly used the raw materials acquired last year in the first half of the year. It is expected that the cost side will be reflected in the second half of the year.

It is worth mentioning that along with the decline in performance, the company is also cutting expenses. In the first half of the year, sales expenses decreased by 16.23% year on year. After market close today, Chongqing Fuling Zhacai Group also announced that it has made adjustments to its organizational structure, reducing the number of first-level organizations in the group from the original 32 to 24, in order to achieve management flattening and maximize efficiency under the group structure.