On January 30, VV Food & Beverage Co., Ltd. (hereinafter referred to as "VV Group") released its 2023 annual performance forecast, which is expected to increase its net profit by more than 50% compared with the same period last year. Net profit attributable to parent 18 billion to 25 billion yuan. Talking about the reasons for the expected increase in performance, VV revealed in the performance announcement that due to the expropriation of houses and appurtenances, VV shares increased the income from asset disposal.
In addition, in 2023, VV Group will continue to reduce costs and increase efficiency, strengthen cost control, and optimize the asset-liability structure. As an old domestic brand, VV has also developed diversified businesses, starting cross-border businesses such as real estate, liquor, coal, and grain. Today, VV is determined to focus on its main food and beverage business and increase its layout in the plant-based protein beverage market. In the increasingly heated 100 billion plant-based milk track, VV will also usher in more development opportunities.
Net profit increased significantly.
On January 30, VV released a performance forecast showing that it is expected to deduct a net profit of 1300 million yuan-200 million yuan, an increase of 14 percent year-on-year57%-76.26%。Net profit attributable to owners of the parent company was 9528940,000 yuan, net profit attributable to owners of the parent company after deducting non-recurring gains and losses was 11.3 billion yuan.
According to public information, VV is a veteran soybean dairy enterprise founded in 1994, mainly engaged in the research and development, production and sales of soybean milk powder, vegetable protein beverages (liquid soybean milk), dairy products, tea and other products, as well as grain purchase, warehousing and processing business. It has a series of products, such as "VV" soybean milk powder, "VV" soybean milk powder, "VV" cereal cereal, VV "lotus root flour", "VV" liquid soybean milk, "VV Liuchaosong" flour, "Tianshan Snow" dairy products, "Yiqingyuan" tea and so on.
As for the reasons for the significant increase in VV's net profit, Jiang Han, a senior researcher at Pangu Think Tank, believes that VV's business scale in the field of food and beverage has been expanding, its market share has gradually increased, and its operating income and profit have grown steadily.
After the announcement of the operation of the net profit increase of more than 5%, VV shares' stock price responded**. VV's share price opened at the end of the day, and as of noon, its share price was 298 yuan shares, a single-day increase of 068%, the total market value of VV shares is 48$1.9 billion.
As for the main reason for the expected increase in performance, VV said in the performance forecast that some of the houses and appurtenances owned by Jinan VV Dairy, a subsidiary of VV Dairy, were expropriated, and the expropriation increased VV Group's asset disposal income by about 78 million yuan in 2023, which had a positive impact on net profit.
Continue to reduce costs and increase efficiency.
VV shares revealed another reason for the growth in the performance forecast. VV said in the performance forecast that during the reporting period, VV continued to reduce costs and increase efficiency, reduce the scale of debt, and reduce financial expenses by about 40 million yuan in 2023 compared with the same period last year, which had a positive impact on net profit.
In order to reduce costs and increase efficiency, VV has carried out a number of measures, including focusing on advantageous industries, strengthening internal lean management, optimizing first-class chain control, improving operational efficiency, and optimizing the asset-liability structure.
In October 2023, VV said at its 2023 semi-annual and third quarter results briefing that VV's revenue in the first three quarters of 2023 decreased by 0.0 year-on-year66%, net profit **3602%, mainly due to the reduction of debt scale, the decrease in interest expenses and the decline in the production of raw materials for the production of major products**.
In addition, for VV's cash flow from operating activities in the first three quarters of 2023, the item "cash for purchasing goods and accepting payment for labor expenses" increased from 31$2.6 billion reduced to $239.9 billion yuan, VV said, mainly due to the decrease in the expenditure on raw materials for the purchase of grain primary processing products. At the same time, VV's asset-liability structure was further optimized. As of the end of the third quarter of 2023, VV's debt-to-asset ratio dropped to 3200%。
Thanks to the reduction of debt scale and the reduction of raw material costs, VV shares' costs have been effectively controlled. According to the financial report, VV's operating cost in the first three quarters of 2022 was 322.4 billion yuan, compared with 313.8 billion yuan. Among them, VV's financial expenses in 2022 will be 41.34 million yuan, and in 2023, it will be 13.03 million yuan, a decrease of 28.31 million yuan.
By strengthening procurement management and optimizing production processes, VV has made progress in cost control, which has effectively controlled costs and improved gross profit margin. Jiang Han believes that VV Food's measures to reduce costs and increase efficiency are worthy of recognition. By reducing the scale of debt and strengthening cost control, VV is able to reduce financial risks and operating costs, and improve profitability and market competitiveness. At the same time, it also reflects the business philosophy and decision-making ability of VV management, which is conducive to the long-term development of VV Group.
Focus on the food and beverage business.
According to Global Market Insights, the global plant-based milk market has reached $14 billion in 2023; In China, according to the "2020-2025 China Plant Protein Beverage Industry Market Demand and Investment Planning Analysis Report" released by the Industry Research Institute, plant milk shows great development potential in China, and the average annual growth rate of China's plant milk industry is expected to remain above 20% in the next few years, and the market size of plant milk is expected to exceed 300 billion yuan in 2025.
Soy milk is loved by many consumers, especially vegetarians and lactose intolerant people, because it is rich in protein and calcium, and does not contain cholesterol, lactose, low fat content, relatively low energy, crude fiber and other health advantages.
VV is well-known in the Chinese market with its "VV Soybean Milk, Happy Joy" and is ushering in a market with huge room for growth. Industry insiders believe that with the gradual increase in consumer demand for healthy food and the vigorous development of the plant-based milk market, VV has brought further development opportunities.
As the "No. 1 soybean milk stock", VV has obvious competitive advantages. Jiang Han pointed out that VV is a well-known food and beverage company in China, with strong brand influence and market share. VV has rich experience and strength in product development and quality control, and is able to continuously introduce new products that meet market demand and ensure the quality and taste of products. In addition, VV has strong production capacity and first-class chain management capabilities, which can quickly respond to market demand and improve production efficiency and product quality.
In order to seize market opportunities and seize market outlets, VV is also actively deploying plant-based protein beverages. VV Group has revealed that in 2023, VV Group will thoroughly implement the development strategy of "Big Grain, Big Food", continue to focus on the main business of "food and beverage and grain", while consolidating the market share of soybean milk powder, intensively cultivate the field of liquid soybean milk, and vigorously develop grain purchase, warehousing, processing, and first-class business, continue to build the whole industrial chain "from the field to the people's table", and consolidate the strategic layout of "one body, two wings, and dual core drive". In addition, VV also grasped the consumer trend and launched it on the shelves in September 2023, which was promoted through various channels, which enhanced brand awareness and expanded sales.
At the performance briefing, VV also revealed its determination to deepen the food and beverage business. VV said that it will unswervingly focus on its main business, focus on quality, revitalize existing resources, stimulate vitality, promote the convergence of resources to the main business, strengthen the main business, further enhance the core competitiveness of the enterprise, and achieve high-quality development. As a long-established domestic brand, VV Soybean Milk is committed to providing consumers with high-quality, healthy and delicious products. VV will continue to strengthen brand promotion and market expansion, actively develop new products to meet the needs of different consumers, and continuously improve product quality and service levels.