Master Kang's financial report: good noodles, water is not good

On March 23, Master Kang Holdings (00322.HK) released the 2019 performance report. The report showed that the company's revenue in 2019 was 61.978 billion yuan, an increase of 2.13%year -on -year; shareholders should account for 3.33 billion yuan, an increase of 35.22%year -on -year. Among them, the revenue and net profit of the square noodle business and beverage business have increased, but the packaging water business is still tepid.

A industry insider told the "Securities Daily" reporter that the packaging water business belongs to the basic distribution (supporting facilities) for Master Kong as a whole, but the packaging is not tall enough, and the high -end layout is slow. reason.

The market share of instant noodle revenue is declining

Master Kang is reversing the situation where instant noodles cannot be sold by adding high -end markets.

On the evening of March 23, the data released by Master Kang showed that the instant noodle business continued to pick up. The sales in 2019 reached 25.3 billion yuan, a year -on -year increase of 5.79%; the net profit was 2.2 billion yuan, a year -on -year increase of 28.74%.

According to Nielsen data, in 2019, the overall sales of instant noodles market increased slightly by 1.5%year -on -year, and sales increased by 7.2%year -on -year. Among them, the sales and sales of Master Kang's instant noodles accounted for 43.3%and 46.6%, respectively, ranking first in the market.

However, the "Securities Daily" reporter sorted out Master Kang's financial report in the past three years and found that from 2017 to 2019, Master Kang's revenue growth rates were 4.91%, 5.73%, and 5.79%, but the market share of instant noodles sales was 50.6%and 48.2. %, 46.6%, showing a decline.

At the same time, the "Securities Daily" reporter sorted out Master Kang's financial report over the past ten years and found that the revenue of Master Kang's instant noodle business in 2013 was 26.468 billion yuan. The double increase of collection and net profit. However, revenue no longer reached the peak of 26.468 billion yuan in 2013.

"Instant noodle industry recovery is the result of the consumer side constantly forcing the industrial end to innovate and upgrade, accelerate iterative." Zhu Danpeng, a Chinese food industry analyst, said to the Securities Daily reporter.

Regarding the instant noodle business, Master Kang still stated that in the financial report, it will still simultaneously expand the strategy of expanding the ultra -high -end market by consolidating the high -priced and high -end market as its core, thereby achieving sales growth.

According to the financial report, the sales of Master Kang in 2019 were 12.321 billion yuan, an increase of 4.46%year -on -year, accounting for the largest proportion of overall instant noodle sales. Followed by high -priced bag noodles, sales were 10.198 billion yuan, an increase of 6.89%year -on -year. However, the revenue of the noodles and other sectors fell 3.5%.

Is the face value not enough to sell water?

Compared with instant noodles, Master Kang's beverage business performed well in 2019.

In terms of beverage business, Master Kong received 35.6 billion yuan in 2019, an increase of 0.81%year -on -year, accounting for 57.44%of the Group's total revenue. Realizing net profit of 946 million yuan, an increase of 72.39%year -on -year.

Master Kang mentioned in the annual report that during the reporting period, the company's gross profit margin increased by 2.43 percentage points to 33.69%year -on -year by optimizing product portfolios and product upgrades, plus the decline of some raw materials prices. Due to the improvement of gross profit margin and other operating costs, the net profit of the beverage business increased by 72.39%year -on -year in 2019.

From the perspective of subdivisions, the sales of Master Kang's juice drinks and carbonated beverages in 2019 have increased. Among them, the sales of fruit juice beverages were 4.670 billion yuan, an increase of 8.51%year -on -year; the sales of carbonated drinks and other beverages were 12.237 billion yuan, an increase of 11.91%year -on -year.

Nielsen data shows that the sales of China's beverage industry increased by 3.9%year -on -year in 2019, and sales increased by 5.1%year -on -year. Master Kang's market share of tea sales was 45.7%, which continued to ranks first in the market. The juice sales market accounted for 15.9%, that is, the coffee sales market accounted for 17.6%, ranking second in the market.

However, the sales of tea beverages and packaging water declined. Data show that in 2019, Master Kang's sales of tea beverages was 15.579 billion yuan, a year -on -year decrease of 0.7%; sales of packaging water was 3.114 billion yuan, a significant decline of 28.99%.

At the same time, the market share of Master Kang's packaging water is also declining. Nielsen data shows that based on sales, the market share of Master Kang's packaging water in 2019 was 5.4%. In 2018 and 2017, the market share of Master Kang's packaging water was 8.7%and 14.1%, respectively, ranking fourth and third in the industry.

"Securities Daily" reporter interviewed the relevant leaders of Master Kong on how to boost the performance of packaging water, but as of the press time, he did not receive a reply.

"Master Kang's packaging water is a parental route, and the price and profit are extremely low. For Master Kong as a whole, it belongs to the basic distribution (supporting facilities), but the packaging is not high enough. The value of the face has become an important reason for the sales of Master Kang's packaging water." Zhu Danpeng told the "Securities Daily" reporter that "now consumers are willing to pay for face value and packaging."

A fast -moving industry person told a reporter from the Securities Daily that the homogeneity of tea and packaging water on the market is more serious, and the high -end pace of Master Kang's beverage business is slow, and it is no longer adapted to the era of consumption currently being upgraded.

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