On February 13, MSCI (MSCI Index Company) routinely announced the results of the quarterly inspection in February and adjusted the index target. Among them, 66 Chinese-funded companies were excluded from the MSCI China Index because they did not meet the quantitative conditions.
As one of the leading enterprises in China's FMCG industry, Uni-President China (00220HK) was also unfortunately selected, which attracted market attention!
In fact, the MSCI index adjustment is a quarterly routine adjustment, and the exclusion sample may be because the stock price continues to decline, resulting in the market value being below the threshold requirement and being excluded, which is not directly related to whether the company itself has problems with its own operation.
After the news came out, Uni-President Enterprise China (00220.)HK) closed down 285%。On February 15 and 16, the stock closed higher for two consecutive days, and has basically digested the impact of this negative news.
On February 20, the share price of Uni-President China continued to rise, and finally closed up 109% to 463 yuan shares, with a market capitalization of 199HK$9.9 billion.
Judging from the past performance, the overall revenue of Uni-President Enterprise in China has maintained growth. From 2017 to 2022, the unified income increased from 2082.2 billion yuan increased year by year to 2825.7 billion yuan.
However, since 2021, its net profit attributable to the parent company has been for two consecutive years**. The financial report shows that from 2020 to 2022, the unified net profit attributable to the parent company will increase from 16$2.6 billion** to $12$2.2 billion; At the same time, its gross profit margin fell below 30%, falling to 28 in 202298%。
After entering 2023, with the accelerated recovery of the consumer market, food raw materials** have declined, coupled with the development and innovation of emerging channels, so that most food and beverage companies have found new growth points, and profitability continues to recover.
The unified business situation is similar. According to the disclosed 2023 interim results, the company achieved revenue of 1457.2 billion yuan, net profit attributable to the parent company of 87.7 billion yuan, an increase of 4 percent year-on-year53% and 4269%；During the same period, gross profit margin increased by nearly 1 percentage point to 3111%。
It should be pointed out that in March 2023, Hefei, a wholly-owned subsidiary of the unification, will unify a case of 16710,000 square meters of industrial land was bought back by the local authorities, and the compensation fee was about 58.3 billion yuan, with a profit of about 34.2 billion yuan. According to CICC, if the above-mentioned land disposal gains are excluded, the consolidated real core net profit increased by about 1% year-on-year.
From the perspective of the two main businesses, the growth trend of the beverage business is gratifying, while the food business has declined significantly, showing a trend of "one positive and one negative".
Specifically, the food business generated revenue of 490.2 billion yuan, down 87%, accounting for 336%, down 491 percentage points.
With the return of the economic order, the consumer market has gradually recovered, offline catering, takeaway, etc. have returned to normal, and the rigid demand for instant noodles has begun to fade, and the industry has been in a state of decline.
In contrast, the beverage business performed stronglyRevenue for the first half of 2023 is 925.8 billion yuan, a year-on-year increase of 123%, accounting for 63% of the group's total revenue5%。Among them, the three major categories of tea beverages, fruit juice and milk tea increased year-on-year respectively1% and 71%。
In fact, in recent years, in the "Red Sea" of the beverage industry, leading food and beverage companies such as Master Kong, Nongfu Spring, and Yuanqi Forest have been increasing their innovation, successively launching various low-sugar and sugar-free beverages, seizing the general trend of health, and continuously optimizing the product portfolio of channels in combination with various consumption scenarios.
Under such industry competition, Uni-President's multi-beverage brands are also actively deploying multiple scenarios and strengthening the operation and investment of family, catering, O2O and other channels. Judging from the rapid growth of the juice business, Uni-President is occupying the market through various penetrations from the ready-to-drink scene, the gift box scene, the family scene to the ** scene.
It is worth noting that in the first half of 2023, Uni-President seized the outlet of electrolyte drinks in the post-epidemic era, and the sales volume of Haizhiyan increased by more than 80%, and the revenue nearly doubled year-on-year.
For the future outlook, at the beginning of 2023, Uni-President Enterprise has set a revenue target of 50 billion yuan in the next five years.
In this regard, the agency believes that for the current unification, the goal of 50 billion in five years is not out of reach, but it still needs to be achieved for a long time and with one product.
In order to maintain the performance of Changhong and win in the fierce competition, Uni-President is also accelerating the layout of new business.
As early as 2018, at the node of shrinking growth of instant noodles, Uni-President launched the "Kaixiaozao" brand, and positioned it as a "living cuisine" category, and invited the star "Xiao Zhan" to endorse it for many years. Driven by the "fan economy", Kaixiaozao has gained a certain popularity in the consumer market.
In addition, the unification will also get involved in the prefabricated food industry. Its "Kaixiaozao" brand has launched a series of new private dishes such as sour and cool golden soup fat beef, tiger skin braised pork, Laotan sauerkraut fish, spicy braised fat sausage, spicy grilled fish, agaricus mushroom old hen soup, and new microwave rice series such as black pepper beef fried rice and Yangzhou style fried rice, officially cutting into the frozen prefabricated food track.
According to the "Prefabricated Vegetable Industry Development Report" released by iiMedia Consulting, the scale of China's prefabricated food market will be 419.6 billion yuan in 2022, and it is expected to reach 510 billion yuan in 2023 and rise to one trillion yuan in 2026.
This means that the prefabricated food industry is moving towards a trillion-level market, and nearly half of them are new competitors. For unification, the current entry into the track of prefabricated dishes may bring greater market opportunities.
Despite the fact that Uni-President Enterprise China (00220HK) was excluded from the MSCI China Index, but its performance fundamentals are generally stable. Its food business is gradually showing weakness in the market, but the beverage business is still on an upward trend and has a good outlook.
In addition, prefabricated dishes, as a new blue ocean in the trillion-level market, are widely optimistic. Although convenience food and prefabricated dishes are very different from each other on the production side, there is overlap in consumer demand on the sales side, and considering that Uni-President has mature experience in production management and other aspects, its launch of prefabricated dishes may have more synergistic advantages than other competing products.
The five-year revenue target of 50 billion yuan proposed by the unified one undoubtedly reflects the optimism of the management.
Author: Bottle.