Financial Services Association, March 22 (Reporter Chen Kang) Pre-baked goods are becoming a new weight for Nanqiao Foods (605339.SH). The company added several new pre-baked baking production lines in 2023. Currently, it has a production capacity of 181,000 tons of precooked baked goods and a production capacity of 0.96 million tons. At the performance conference held today, Lin Changyu, general manager of the company, mentioned, “The supermarket channel currently accounts for the highest proportion of the company's pre-made bakery customers, and the restaurant, tea, coffee and bakery chain channels have a lot of room for growth.”

In response to online investors, Lin Changyu said, “On the one hand, pre-made baked goods provide efficient and convenient solutions for the company's downstream customers, including problems such as R&D difficulties, shortage of production technicians, increased labor costs, and low store floor efficiency. At the same time, they guarantee the stability of product quality and taste to the greatest extent, and satisfy the consumer trend of consumers seeking fresh baked goods.”

In 2023, the company's revenue for precooked baked goods increased the most, reaching 68.95%. The annual production volume and sales volume increased by more than 100% year on year, making it the category with the biggest change. With the expansion of production and sales, the operating cost of precooked baked goods also increased 77.64% year on year.

Among the five major products of Nanqiao Food, the revenue share of the most important baking oil has declined year by year in the past 3 years. In 2023, the revenue of this product decreased by 1.9% compared to the previous year. At the same time, the revenue of the four major products, whipped cream, dairy products, prepared baked goods, and fillings, all increased.

Therefore, at the results meeting, in response to the question “There is no significant increase in revenue and what is the main reason for the sharp increase in net profit”, Lin Changyu said that there are reasons for the change in product structure and the decline in raw material costs. According to the annual report, changes in product structure indicate an increase in demand for baking ingredients for whipped cream and dairy products. The company's revenue for whipped cream with the highest gross margin increased 11.73% year over year. Mo Yating, director of the company, mentioned that currently the price of palm oil, the company's main raw material, is generally stable.

The company introduced the current overall production capacity situation at the performance conference: it has three production bases in Guangzhou, Tianjin, and Shanghai, and the fourth production base in Chongqing has been laid; the company is optimizing the whipped cream production lines in Tianjin and Guangzhou to increase production capacity, which is expected to be completed in the first half of this year; it is currently under construction with a production capacity of 203,000 tons of whipped cream and 0.96 million tons of precooked baked goods.

Overseas Chinese Food's revenue increased by 132.86% year-on-year in 2023, but the overall share is still small. Lin Changyu explained that the company has set up subsidiaries in Singapore, Thailand and other places, and has set up sales teams, and will use the Southeast Asian market as a starting point for future expansion.

According to the company's 2023 annual report, the annual revenue was about 3,083 billion yuan, up 7.73% year on year; net profit was about 232 million yuan, up 44.73% year on year.