As the maternal and infant industry enters the stock competition cycle, the competition in the baby diaper market is becoming more and more intense. Various brands are working the quality, design, and marketing of diapers, trying to occupy more market share and find a way out. Recently, the news that a diaper brand from Sichuan is preparing to sprint for IPO has scattered in the industry. So, what exactly is the strength of this company? Will it be able to go public as it wishes?
Sprint the first share of Hong Kong stock diapers,What is the strength of the new world?
According to the relevant documents of the Hong Kong Stock ExchangeSichuan Xinshihao maternal and infant products*** hereinafter referred to as "Xinshihao") submitted a listing application to the Hong Kong Stock ExchangeThe sole sponsor is Redco Corporate Finance***
According to the prospectus, Sichuan Xinshihao is a company focusing on the design, production, research and development and sales of infant diaper products, headquartered in Meishan City, Sichuan Province. The company's main products are divided into infant diapers and infant pull-up pants, which are sold under its own brands (i.e., Seven Color Pig and Congbo brands). Up to now, it has more than 20 different series to meet the different needs of infants, crawling children, toddlers and preschoolers at different ages and stages of development.
In addition to its own brand, Xinshihao is also actively expanding business channels, such as OEM. Since June 2021, Xinshihao has started OEM business. However, the proportion of OEM sales is still at a low levelIn fiscal 2021 to the first nine months of 2023, the proportion of the same period. 7% and 20%, the influence on the overall performance is still weak.
In addition, it can be seen from the prospectus that the revenue of Xinshihao mainly comes from dealers, of which the contribution of the five major dealers accounts for nearly 50%. If there is a change in cooperation, it may affect the revenue of Xinshihao.
In terms of performance, the overall performance of Xinshihao maintained a growth trend. In fiscal year 2021, fiscal year 2022, and the first nine months of 2023, the revenue of Xinshi is about 3400 million yuan, 53.8 billion yuan and 48.8 billion yuan, and the profit in the same period was 203610,000 yuan, 465350,000 yuan, 439930,000 yuan.
In terms of gross profit margin, the three time periods are: 0%。Overall, the gross profit margin of Xinshihao is basically stable, but it will decline in 2023. According to the prospectus, in the first nine months of 2023, the gross profit margin from the dealer channel fell below 20% to 194%。In this regard, relevant people speculate that the decline in its gross profit margin in 2023 may be related to the pressure on the gross profit of the dealer channel.
It is worth noting that the capacity utilization rate of Xinshi is low. The capacity utilization rate of infant diapers is as high as 963%, but pull-up pants are only 576%, while diapers are as low as 311%。This kind of inefficient production will inevitably affect the profitability of Xinshihao Company in the future.
With the "low price" strategy, it ranks among the top 20The brand reputation is mixed
With the development of the economy and the improvement of education level, the parenting style of Chinese parents has also changed from traditional and rough to individualized and refined. The change in the concept of parenting has also further promoted the upgrading of maternal and infant consumption. At the same time, the awareness of health care of parents is also further strengthened, and the use and purchase rate of diapers, as one of the key categories in the baby care products industry, are gradually increasing.
According to product positioning, the infant diaper market is mainly divided into three markets: economic, mid-end and high-end. Among them, economical baby diapers are usually positioned as an affordable choice in the market because of their high cost performance.
Relevant data show that from 2018 to 2022, the compound annual growth rate of mid-range and high-end infant diaper products is -118%、-16.1%, while the market retail sales of economic baby diapers increased from 12 billion yuan to 16.7 billion yuan, showing a contrarian growth trend. And it is expected to reach 23.2 billion yuan in 2027, with a compound growth rate of 6 compared with 20228%。
Economic infant diapers will slowly occupy more market share, partly because of the disappearance of the demographic dividend, the maternal and infant industry has entered a low-growth era, and the market has begun to enter the stage of cost-effective competition. Therefore, in China's diaper market, both imported brands and domestic brands have changed their strategies and implemented low-price strategies, intending to "exchange price for volume" and achieve new growth.
On the promotional posters of some stores, it can also be seen that the low price of diapers has reached the ceiling. For example, on the "New Year's Festival" of a store, a pack of 60 pieces of "a cute" diaper with S size is 99 yuan, and the activity price is only 69 yuan.
Under this situation, Xinshihao has been focusing on economical infant diaper products since its establishment. According to the prospectus, in 2021 and the first nine months of 2023, in various channels, the ** of each diaper of Xinshihao is less than 1 yuan. On the one hand, it may be to be able to have a place in the market, and on the other hand, it may also be related to the weak R&D capabilities of Xinshihao itself.
According to the prospectus, Xinshihao currently has only 1 invention patent, 18 utility model patents and 1 design patent. And the number of R&D personnel has continued to decline from 64 in 2021 to 55 in 2023. Without the support of strong R&D capabilities, Xinshihao will not be able to develop high-quality products, and it can only take the low-price track. As we all know, the R&D capability of an enterprise is extremely important for the long-term development of an enterprise. The times are constantly changing, the market demand is constantly changing, if the new world's good research and development capabilities have not been improved, it will inevitably be eliminated by the market.
In addition to the weak R&D capabilities, the reputation of Xinshi good diapers is also mixed. In the comment area of some diaper products sold by **Seven Color Pig***, some consumers commented that they were "affordable" and "easy to use", and some were some bad reviews, mentioning that the content was "you get what you pay for", "diapers are very thin", "even red butt after use", etc.
And on the black cat complaint platform, you can also see some consumer complaints about the Seven Color Pig series of diapers. Some consumers claimed that there were bugs in the first diaper when they opened it, and some consumers said that there was a piece of blue chewing gum in the mezzanine of the diaper.
The way of longevity, product is king. If an enterprise wants to be invincible in the fierce competition, it must rely on the excellent product quality of the enterprise. Obviously, there is still a lot of room for improvement in the new world, which relies on the low-price strategy.
In the past ten years, China's diaper product market has been dominated by foreign brands. At present, the top brands in the domestic market are basically foreign brands, such as "Curiosity", "Pampers" and "Kao". There are thousands of diaper companies in China, but most of them are concentrated in the low-end market. Overall, the market share occupied by domestic brands is scattered and their competitiveness is weak. Although Xinshihao has become one of the top 20 domestic brand infant diaper products, its market share is only about 3%.
In the face of strong foreign brands and emerging new brands, Xinshihao is bound to be under pressure, and seizing the opportunity to sprint to IPO may also be a self-help? ButWeak R&D design, low capacity utilization, over-reliance on dealers, and mixed brand reputationWhether the new world will be able to achieve its goals in the future remains to be discussed.