The revenue profit drops, the stock price drops 70 %, the Chinese flying crane is going to live a bitter life?

Radar finance produce | Li Yihui edited | Deep Sea

The Chinese flying crane, known for its high gross profit, is difficult to be alone in the face of the decline in birth rate.

On August 2nd, China Feihe closed down 2.05%, the stock price was HK $ 6.7/share, and the total market value was HK $ 59.5 billion. Since the disclosure of the semi -annual performance forecast on July 22, the company's stock price has continued to fall, and the 7 trading days have fallen by more than 19%. If it starts from the HK $ 25.244/share (previous repetition) in January last year, it has fallen by 72%so far, and it has continued to reach a new low.

The performance trailer for the stock price of the collapse shows that in the first half of 2022, China Feihe revenue revenue of 9.5-9.8 billion yuan, a year-on-year decrease of about 14.9%-17.4%; the profit was 2.2-25 billion yuan, a year-on-year decrease of 33.4%-42.4%. Camp camps, camps Both collection and profits fell.

After the performance warning was announced, a number of internationally renowned financial institutions lowered their target prices and profit forecasts. Among them, Goldman Sachs claims that infant formula milk powder companies are facing a more challenging operating environment market. The decline in birth rate, macro weakness, and intensified competition will lead to a slowdown in China's market share or increase in sales. price.

In fact, the Chinese Feihe has made a two -digit recovery from the past to the two -digit performance, not a short -term phenomenon. Since 2020, due to the impact of the epidemic, the market sales activities that milk powder companies have depended on survival have been hindered, and indicators such as Feihe's revenue and net profit growth rate have declined to varying degrees.

Focusing on the future, as the birth rate declines, the total number of infant formula milk powder has shrunk, and the Chinese Feihe, which uses infant formula milk powder as the main business, urgently needs to find new growth points and diversified to get rid of the dilemma of performance. However, in adult milk powder, goat milk powder, children's milk powder and other segmented tracks, Feihe does not take the lead in competition compared with companies such as Nestlé and Yili who has been deeply cultivated for many years.

Some people in the industry have analyzed that the decline in the birth of the newborn's birth is not a sudden phenomenon, and the performance of milk powder companies is not short -term. Feihe's business rely on infant formula milk powder. A few years of bitter days.

Performance decline, institutional reduction target price

On the evening of July 22, China Feihe issued a profit early warning announcement in the first half of the year.

According to the announcement, the company is expected to operate about 9.5 billion yuan to 9.8 billion yuan in the first half of this year, compared with 11.5 billion yuan in the same period in 2021, it will decrease by about 14.9%to 17.4%; it is expected to be 2.2 billion to 2.5 billion yuan, compared 3.8 billion yuan in the same period in 2021 decreased by about 33.4%to 42.4%.

According to Flush iFind data, from 2018 to 2021, the operating income of Chinese Feihe's operating income was 76.52%, 32.04%, 35.50%, and 22.5%, respectively. This decline in revenue is also the first time that its first half of revenue has declined since 2019.

But the decline in profits appeared earlier. According to the financial report, Feihe's net profit in 2021 decreased from 7.437 billion yuan to 6.871 billion yuan, a year -on -year decrease of 7.61%. However, Feihe said that the decline in net profit in 2021 was mainly due to the acquisition of the original ecological animal husbandry. If the impact was removed, net profit increased by 21.2%year -on -year.

Regarding the double revenue and net profit in the first half of 2022, China Feihe explained in the announcement that the decrease in profits was mainly due to the decrease in the revenue of infant formula milk powder products.

The reasons for the decrease in operating income are mainly the decline in the birth rate of the Mainland, and the fresh strategy of Feihe in 2022, further reducing the channel inventory of products such as Xingfei Fan and other products, maintaining a higher freshness of shelf products, and the overall overall distribution channels. The inventory level is more stringent control.

Leng Youbin, chairman of China Feihe, said at a event in June 2021 that the birth rate in 2021 may have a "cliff -like decline". Young parents are worried that the effect of vaccine on the fetus may be I won't get pregnant again. Therefore, in the next two years, it will have a great challenge to Feihe and the industry.

In addition to the impact of birth rates, there are also adjustments of Feihe in inventory and price maintenance.

In May of this year, Haitong International Research reported that due to the weak market consumption of unreasonable performance targets set by the brand, the market consumption was weak, which caused excessive pressure on dealers' inventory, which led to the phenomenon of chain and random marketing in the milk powder market in recent years.

A set of evidence of evidence is that the number of days of flying cranes has changed from 57 days in 2018 to 81 days in 2021, and the sales are getting slower and slower. As of the end of 2021, Feihe's warehouse inventory reached 1.722 billion yuan.

In this regard, China Feihe launched a "fresh strategy" at the beginning of the year to clean up streamlined goods, stabilize the price disk, and reduce channel inventory.

The current "fresh strategy" effect is unknown. However, after the performance warning, many investment banks have lowered the profit forecast and target price of Feihe.

The Goldman Sachs Research Report pointed out that the profit of China's flying crane far inferior to the bank's expectations. The bank believes that infant formula milk powder companies are facing a more challenging operating environment: 1) The decline in birth rate on the industry has begun to appear; The intensive market competition of the company will lead to a slowdown in market share or increase in sales expenses.

In summary, Goldman Sachs has a 14%-20%revenue forecast of China Fei Crane 2022-14 years. It was reduced by 23%to HK $ 9.2 from HK $ 11.9. HSBC Global Research issued a report, which reduced the target price of China Fei Crown's shares, from HK $ 11.7 to HK $ 9.1. 19%and 23%, and the net profit forecast was also reduced by 17%and 21%.

HSBC believes that the worst situation of Chinese flying cranes may have passed, but due to the lack of visibility in market growth, the room for rise is also limited.

Bank of America Securities also reduced the profit forecast of Feihe 2022 and 2023 by 27%and 24%, respectively, and the target price dropped from 7.5 yuan to 7.1 yuan, which has approached the company's recent low price of HK $ 6.56/share.

Marketing driver strategy may be difficult to succeed

The price is the most expensive in the world, and the gross profit margin is about 70%per year, and it is a distinctive label of Feihe. The rise of Feihe began with its strategy of holding high.

According to the data, the predecessor of Feihe Dairy was Zhao Guang Farm Dairy Factory and belonged to the Heilongjiang Agricultural Reclamation Bureau. In the 1990s, Leng Youbin, then director of the factory, bought Zhao Guang Ranch's shares for more than 10 million yuan, and then changed its name to Feihe Dairy.

After several years of development, Feihe landed in Nasdaq in 2003, from small and medium -sized boards in the United States, and then moved to Nasdaq. In 2009, Feihe raised more than $ 170 million.

After the 2008 melamine incident, domestic milk powder collectively fell into a crisis of trust, and China's mainstream market was occupied by foreign milk powder.

Since the establishment of the pasture, Feihe has escaped the biggest crisis of this industry. After some investigations, Leng Youbin decided to produce and sell high -end products, and launched the "Star Feifan" series, with an average price of more than 450 yuan/kg, and significantly large, and significantly significantly. Reduce low -end products below 200 yuan/kg.

According to Leng Youbin, "Feihe milk powder is folded into a kilo price, the world's most expensive", and said that although Feihe has a milk powder product of less than 200 yuan, high -end products sell better.

With high -end products, Feihe played the slogan of "more suitable for Chinese baby constitution", and invited first -tier movie stars such as Zhang Ziyi and Wu Jing as endorsements to raise their identity positioning.

In terms of marketing investment, Feihe was not soft. Financial data shows that from 2017 to 2020, the company's sales and distribution costs increased from 2.139 billion yuan to 5.263 billion yuan. In 2021, Feihe's sales and distribution expenses were 6.729 billion, a year -on -year growth rate of 27.85%, and the revenue proportion was nearly 30%.

In the horizontal comparison, Mengniu's sales expense ratio in 2021 accounted for 26.6%, and Illi was 17.5%. In addition, in 2021, Feihe's research and development costs were 42.6 billion yuan, and the R & D cost rate was only 1.87%, which was different from about 30%of the sales cost rate.

Despite the constant questioning of "IQ Tax", this high -ranking strategy cleverly caters to consumers' cognitive psychology "good is expensive", which has made Feihe sing all the way.

As early as November 7, 2018, Feihe Dairy announced its sales over 10 billion yuan, becoming the first brand of Chinese milk powder brand over 10 billion yuan. After the U.S. stock delisting was re -listed in Hong Kong stocks, Feihe was favored by investors. When the stock price was the highest in 2021, the market value exceeded HK $ 200 billion, which once surpassed Mengniu.

But to this day, with the post -90s and 95th generations to become the main parenting body, this group has higher educational background and professional knowledge, and the consumption mind is more mature. Just pay for high -priced products.

Coupled with the popularity of digital retail, most consumers can master enough product information through shopping festivals, short videos and other channels. The effect of customer acquisition play will become weaker and weaker.

Instead, the R & D terminal is insufficient, and the key raw auxiliary materials such as milk powder and milk iron protein are subject to people, making the road of flying crane's marketing drive more difficult.

The "second curve" is not clear

Radar Finance combed a blooming management found that in the context of the sharp decline in the number of newborns, Feihe has always rely on the single track of infant formula milk powder.

Data show that infant formula milk powder is the main business of Feihe. In 2020, the business revenue accounted for 95.0%.

In 2021, Feihe's core business infant formula milk powder products achieved revenue of 21.515 billion yuan, with revenue proportion of 94.4%; including adult milk powder, liquid milk, rice noodles auxiliary food products and other related products, 9.91 100 million yuan, accounting for 4.4%; the sales revenue of nutritional supplements was 269 million yuan, accounting for only 1.2%.

The decline in birth rate has led to a slow growth of the infant milk powder market as a whole. With reference to the data and estimates of Euromonal International, the size of the infantile powder market in 2021 was about 158.7 billion yuan, a decrease of about 6%year -on -year.

Shen Wanhongyuan's research report believes that due to the decline in fertility, the number of birth population in the country is still under pressure, which has led to further contraction of the industry's demand.

The shrinkage of market capacity also means that the ceiling of the baby powder industry is hidden. Feihe is looking for the second growth curve. Adult milk powder is one of the measures. According to ICBC's research minutes, Feihe's adult milk powder revenue in 2021 was about 700 million, a year -on -year growth rate of 30%. In addition, Feihe also announced that the company will launch adult functional milk powder products in the second half of 2022.

However, in the market of adult milk powder, Nestlé, Yili, Mengniu and other companies have been cultivating for many years, and Feihe does not take the lead. According to the financial report, Mengniu's revenue of adult milk powder in 2021 increased by more than 76%year -on -year; according to Nielsen's zero -research data, in 2021, the retail of Yili Adult Formula Milk Powder was ranked first in the market.

In addition to adult milk powder, Feihe also aimed at the goat milk powder market. In July 2021, Feihe once acquired all the stakes of the goat milk powder brand and Miaoco, which officially entered the goat milk powder market; in November of the same year, through the original ecological animal husbandry of its holding company, it won the Shaanxi Green Energy Ecological Animal Husbandry Milk goat. Breeding facilities and goat milk production lines.

At present, Feihe has three infant formula sheep milk powder brands with Miaoco, Jiarui Miao Ke, and Jiaai. However, in this market, Australia, which has been acquired by Yili, has always occupied the boss. Feihe wants to increase market share, which will inevitably compete directly with Yili and Junlebao.

Some analysts pointed out that expanding the new category helps Feihe to get rid of the current performance dilemma. However, it takes time to observe whether the new business can cultivate into a new growth point.

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