On December 22, the performance of the leisure food and beverage sector of Hong Kong stocks was sluggish, and most of the constituent stocks continued to bottom out. In fact, looking back at the whole of 2023, the stock prices of listed companies in the snack food and food and beverage industry have generally shown a downward trend, and the market value has continued to decline, constantly refreshing record lows.
"Casual lo-mei" giant Zhou Heiya (01458HK) share price continued to decline, falling by more than 6% during the yearBeverage company Vitasoy International (00345.)HK), Master Kong Holdings (00322HK), Uni-President China (00220HK) shares also fell by more than % during the year.
In addition, "Spicy Brother" Weilong (09985HK), "Childhood Memories of the Post-90s", Want Want China (00151.)HK) shares have also been sluggish, with the former falling nearly 29% during the year, and the latter hovering between HK$4-5 for a long time.
Snack food and beverage stocks are sluggish, and in the final analysis, on the one hand, they may be dragged down by a weak marketOn the other hand, it is directly related to the current fundamental performance of the snack food industry and enterprises, as well as future development expectations.
The recovery in performance can hardly hide the pessimism of expectations
This year, China's macro economy has recovered moderately, and the growth rate of per capita disposable income in the first three quarters has improved quarter by quarter. From the perspective of consumption, the social zero continues to pick up, and the growth rate of catering is better than that of the social zero, but the consumer confidence index has not yet recovered to the pre-epidemic level, and the consumption power is still in the recovery channel, and then the performance of most leisure food companies has picked up, but due to weak market demand and cost fluctuations, investment banks are cautious about expectations.
Take Want Want China (00151.)HK) for the six months ended September 30, 2023, Want Want China achieved revenue of 1127.5 billion yuan, a year-on-year increase of 41%, and the net profit attributable to the parent company was 173.2 billion yuan, a year-on-year increase of 85%。However, due to the performance growth rate was not as good as the expectations of some investment banks, investment banks such as CICC, Nomura and Goldman Sachs lowered the target price after the results.
Coincidentally, Goldman Sachs lowered its TP for Want Want China and lowered its sales in the second half of the year to reflect the sluggish recovery in demand in the third quarter amid a relatively weak macro environment and unfavorable weather, as well as a downward revision of gross margin expectations due to recent fluctuations in input costs.
"Spicy Brother" Weilong (09985hk）Since the beginning of this year, life has not been easy, in order to keep profits, Weilong has taken price increase measures. In the first half of this year, Weilong's net profit attributable to the parent company was 44.7 billion yuan to turn losses into profits. But it was also complained by many netizens that "spicy strips are comparable to the price of meat".
Although the profit side has made good improvements, the investment bank Guojin** said in the first half of the performance review that Weilong's price increase pressure still exists. The bank pointed out that in the first half of the year, the recovery of Weilong's flour products was less than expected, mainly because there was still pressure on the circulation channels, and at the same time, considering the greater impact of price increases on sales, Weilong's performance expectations were lowered.
Lo mei on the rivers and lakes,Zhou Black Duck (01458.)HK) is facing the same problem. In the first half of this year, Zhou's revenue increased by 19% year-on-year79% to 1415%；Net profit attributable to the parent company increased by 4 year-on-year53 times to 10.2 billion yuan. Although the performance has improved, Zhou Heiya and other lo-mei enterprises have to face cost pressure, and the pressure of competition with new and old brands is still not small, reducing costs and increasing efficiency is still one of the key tasks of lo-mei enterprises, which has also caused the market to be cautious about its expectations.
The industry is expected to rise in 2024, but the competitive pressure will remain unabated
Looking forward to 2024, from the recent strategy meeting of securities companies and investment banks, most investment banks have a positive attitude towards the demand of the food industry in 2024**, but they tend to be cautious about corporate competition.
Anxin ** believes that from the demand side, the current demand is resilient, with the release of positive macro signals, business activities can be expected to improve, the banquet scene is expected to continue to grow steadily, and the overall demand is expected to bottom out**. From the perspective of the supply side, the industry differentiation is more obvious, and enterprises are obviously differentiated in response to the squeezing growth environment due to the scenario layout, brand position and their own management capabilities, and this industry trend is expected to continue. Looking forward to the future of consumer investment, in addition to focusing on the overall macro demand and business model, it is also necessary to look at the changes in business operations.
According to the "2023-2024 Research Report on the Status and Consumer Behavior Data of China's Snack Food Industry" released by iiMedia Consulting, from 2010 to 2022, the market size of China's snack food industry continued to grow, from 410 billion yuan to 1,165.4 billion yuan. It is estimated that the market size of China's snack food industry will reach 1,237.8 billion yuan in 2027. iiMedia Consulting analysts believe that the leisure snack market will be more competitive in the future, and innovative products will replace conservative products.
According to the Yuanda information research report, the consumer demand of the snack food industry has changed, the consumption scene has become more diversified, the channel reform has begun to accelerate, and the omni-channel layout has become the main line of development. With the rapid rise of emerging channels in China, high-end membership stores represented by Sam's, Hema and Costco and snack mass merchandisers represented by Snack Busy, Snack Youming, Zhao Yiming, etc. have developed rapidly. At the same time, with the gradual maturity of the business model of the live broadcast industry, consumers' dependence on online channels has been further enhanced.
Author: Bottle.