How Does Qingdao Food "A Biscuit" Play The Stock Market

Qingdao Food Co., Ltd. (hereinafter referred to as Qingdao food), which is impacting a shares, recently released its 2020 performance and dividend plan. In 2020, the company's revenue will reach 480 million yuan, a year-on-year decrease of 0.50%. On the other hand, the company insists on paying dividends, and plans to distribute 5 yuan in cash for every 10 shares, with a total dividend of 33.275 million yuan.

The new third board has been listed for two years without capital action, and plans to switch to A-share market with declining revenue performance. How much expectation can Qingdao food bring to A-share investors?

Public information shows that Qingdao food factory, formerly known as Qingdao food factory, was founded in 1950 and has passed the "rare year".

With 70 years of development history, "time honored" Qingdao food is still only a "small enterprise" in the industry. In recent years, the revenue of Yizi international and Dali food are both in the scale of 10 billion yuan.

During the reporting period from 2017 to the first half of 2020, the revenue of Qingdao food was 444 million yuan, 474 million yuan, 483 million yuan and 236 million yuan respectively, and the net profit attributable to the parent was 47.7132 million yuan, 66.9179 million yuan, 75.1351 million yuan and 39.954 million yuan. Qingdao food has the name of "time-honored brand", and its performance is not equal to a small part of the giant, and has even fallen into stagnation and decline.

At present, the fixed assets newness rate of Qingdao food is only 30.62%. This time, it is proposed to raise 464 million yuan for the renovation and expansion of intelligent chemical plant, marketing network and information construction project, as well as the construction project of R & D center, which is equivalent to the reconstruction of "Qingdao food". But can Qingdao food break through by changing the old business into a new one?

"A biscuit" business

According to the data of China baking food and sugar products industry association, as of 2019, the number of biscuit production enterprises above the designated scale with the main revenue of more than 20 million yuan has reached 656, with a revenue of 131.733 billion yuan. There are a large number of business entities in the industry, and the market has long been the Red Sea competition.

In the face of fierce competition in the industry and the efforts of peer companies to enrich their product lines, Qingdao food has been keeping a single "biscuit" product line for 70 years, so it is difficult to innovate and break through the product line, which will undoubtedly put the company's growth at a disadvantage.

Qingdao food has a wide range of business scope, including biscuits, condiments (semi-solid) and chocolate instead of cocoa butter candy. However, the 21st century economic report reporter consulted the Qingdao food prospectus and found that its performance was highly dependent on biscuits, especially calcium milk biscuits. During the reporting period, the sales revenue contributed by biscuit products accounted for 79.87%, 82.61%, 83.16% and 87.08% of the main business income respectively, and the contribution of the gross profit accounted for more than 90% of the gross profit of the main industry.

In the first half of 2020, the calcium milk biscuit business of the company contributed 83.95% of the company's operating revenue, while the proportion of peanut butter business in the report continued to decline, accounting for only 8.44% in the first half of 2020. The popular leisure biscuits on the market are almost negligible in Qingdao food products. The annual revenue is less than 20 million yuan, accounting for only 3% of the company's revenue.

Qingdao food said frankly that the biscuit industry market competition is fierce, and the company's business performance largely depends on the sales of biscuit products. If the competition in this field intensifies in the future, or the market environment of the industry changes systematically, or the consumer recognition or taste changes significantly, it will have adverse effects on the company's production, operation and performance.

Industry analysis shows that the industry competition in the leisure snack market is fierce, especially in the context of the rise of Internet snack brands, "time honored brands" decline faster. Expanding popular product lines and sharing risks through rich product lines has become an important means for traditional snack enterprises to enhance their competitiveness. On the other hand, the primary risk in the field of food is food safety. It is difficult for a single product line to resist the brand profit and loss brought by food safety.

In this regard, the reporter of 21st century economic report has called Qingdao food for many times, but the public call has never been answered.

The product is exposed to be unqualified

In the prospectus, Qingdao food first pointed out the food safety risk, saying that there are many links in the production process of the company's products. If the suppliers sell unqualified raw materials to the company and the company fails to find them, or the company has omissions in the aspects of material requisition, production, personnel health management, process control and product inspection, or the downstream distributors or sales terminals are in the process of transportation and sales Failure to keep the products according to the regulations may lead to food safety problems, which will adversely affect the company's reputation and performance.

In fact, during the reporting period, the company has been punished many times because of the unqualified main business products.

In January 2021, Jinan Municipal Bureau of Supervision issued the first issue of food safety supervision and random inspection information notice in 2021. The special calcium milk biscuits with production date / batch number of "2020-07-21" produced by Qingdao food subsidiary "Qingdao Qingshi Co., Ltd." were detected to be unqualified. On February 2, Qingdao municipal regulatory bureau issued the fourth issue of the notice on the inspection and disposal of substandard food in 2021. Among them, iron zinc calcium milk biscuits and iron zinc animal Biscuits (brewing type tough biscuits) produced by Qingdao food were found to be unqualified. According to the investigation, Qingdao Municipal Bureau of supervision imposed a fine of 1.2 million yuan on Qingdao food, confiscated 47413.40 yuan of illegal income, and a total of 1.2474 million yuan of fines and confiscations.

In 2020, when the prospectus was submitted, Qingdao food was reported to be unqualified by Henan municipal regulatory bureau and Beijing municipal regulatory bureau.

In September 2020, Henan Municipal Bureau of Supervision announced that the peroxide value (in terms of fat) of a batch of iron, zinc and calcium milk biscuits produced by Qingdao Food Co., Ltd. entrusted by the nominal Qingdao Green Food Co., Ltd. sold in Wugang new concept shopping mall, exceeded the standard greatly. In November of that year, Beijing Municipal Bureau of Supervision announced that in the random inspection of food safety supervision, the peroxide value (in terms of fat) of iron and zinc animal biscuits produced by Qingdao food was found not to meet the national food safety standards after inspection by the national non-staple food quality supervision and inspection center.

In addition, according to public reports, Qingdao food is even suspected of selling trial production products to the public.

The research products of Qingdao food include black sesame calcium milk biscuit R & D project, isomaltulose calcium milk biscuit R & D project, egg biscuit R & D project, chitosan oligosaccharide calcium milk biscuit R & D project, peanut butter R & D project and red wine Rose cookie R & D project. Among them, the research and development projects of black sesame calcium milk biscuits and isomaltulose calcium milk biscuits are in the trial production stage, and the egg biscuits, chitosan oligosaccharide calcium milk biscuits, peanut butter and red wine Rose cookies are in the experimental stage.

And Qingdao food Taobao official flagship store "Qingshi flagship store" shows that black sesame calcium milk biscuits, isomaltulose calcium milk biscuits and chitooligosaccharide calcium milk biscuits have been sold online. Even as early as 2019, many consumers have commented on the purchase of black sesame calcium milk biscuits.

According to the general rules for the examination of food production license, the food produced by the applicant shall not be sold as food. Therefore, Qingdao food is suspected of putting the trial production stage products online for sale, or violating the regulations.

In the critical period of impacting the capital market, Qingdao food has repeatedly stepped on the red line of food safety supervision, and even was issued a million fine tickets by the local regulatory authorities, which makes the market once again question the 70 year old brand.

Difficulties of traditional sales model

The frequent unqualified events of main products cast a shadow on the capital market tour of Qingdao food. What the market is more worried about is that the company still shows its traditional marketing system.

At present, new leisure snack brands rely more on e-commerce marketing, which can not only reduce the cost of circulation field, prevent food safety risks, but also strengthen brand promotion. However, Qingdao food still adheres to the old road of dealers, which seriously limits the sales market development ability.

According to the prospectus, the sales mode of Qingdao food is mainly the distribution mode. During the reporting period, the proportion of the company's domestic distribution mode revenue to the main business income was 60.47%, 65.44%, 66.36% and 73.19% respectively. In terms of online sales channels that leisure snack enterprises pay more and more attention to, the layout of Qingdao food is very slow. As of the first half of 2020, online sales only contributed 3.42% of the revenue of Qingdao food.

At the same time, after more than 70 years, Qingdao food has never been out of Shandong Province. During the reporting period, the sales revenue of the company in Shandong province accounted for more than 80% of the main business income, and reached 85.09% in the first half of 2020, and the revenue increasingly depends on Shandong.

Qingdao food said that although the company is committed to developing markets outside Shandong Province and vigorously developing online sales business, the expansion of sales channels and the cultivation of consumer habits will take some time, and the current situation of regional concentration of the company is expected to exist in the short term.

In the fund-raising plan, Qingdao food plans to spend 62.7686 million yuan to build marketing network and information construction, but the main construction is still based on offline, and plans to build new marketing centers in 8 cities. Under the background that e-commerce marketing has become an important marketing channel and brand promotion method in the food industry, Qingdao food is still laying out the traditional retail marketing system, and its growth will inevitably worry the market.

Qingdao food has been listed on the new third board for many years, but it has not come up with a high growth development plan. Problems such as unresolved ownership of property rights and incomplete company structure are still being inquired by the regulatory authorities. Even shortly before the submission of the prospectus, Qingdao food was informed by the regulatory department for not disclosing the equity transfer. 70 years of "time honored brand" is listed on the stock market by "a biscuit", so investors inevitably have to make a question mark on its investability.

?