Juewei Food 603517 2021 Annual Report Notes

Original link: https://ljf.com/2022/05/18/1091/

Discussion and analysis of business conditions <br />The company has overcome the severe challenges of the external environment. During the reporting period, the operating income was 6.549 billion yuan, a year-on-year increase of 24.12%; the net profit attributable to shareholders of the parent company this year was 981 million yuan, a year-on-year increase 39.86%. As of the end of the reporting period, the total number of stores in mainland China was 13,714 (excluding Hong Kong, Macao, Taiwan and overseas markets), with a net increase of 1,315 for the year.

Industry situation of the company during the reporting period <br />According to the report released by iiMedia Research in February 2022, the scale of China’s halogen products industry is expected to exceed 360 billion in 2022, of which the compound growth rate from 2018 to 2021 is 12.3%

Although the industry as a whole has maintained a stable growth trend, in 2021, the lo-mei industry is under tremendous pressure: first, the reduction in offline consumer demand caused by the epidemic, especially the number of passengers in traffic hubs, shopping malls and tourist destinations The sharp decline in the consumption power of the original high-potential energy consumption areas has led to a cliff-like decline in consumption power.

The competition pattern within the industry is being restructured at an accelerated pace. With the reduction of offline consumer demand brought about by the new crown epidemic, the reduction of traffic in urban business circles, and the continuous rise in the price of raw materials, small and medium-sized brands in the leisure lo-mei industry have faced severe survival in recent years. Challenges, a large number of traditional “mom and wife shops” have withdrawn from the market due to capital turnover, food safety and other issues, and the industry share has gradually concentrated to leading companies, which is in line with the development trend of the snack food industry in mature markets around the world.

Analysis of core competitiveness during the reporting period <br />According to the needs of sales network construction, the supply chain is arranged with a radius of 300-500 kilometers. The company has established 21 production bases (including 2 under construction) nationwide. With the supply chain network of the center, each production base can well radiate to various regional markets, realizing “orders on the same day, production on the same day, delivery on the same day, and sales start 24 hours”.

The second and third growth curves of “Integration of Industry and Finance to Build Ecology”
Through the wholly-owned Shenzhen Wangju Investment Co., Ltd., the company cooperates with external professional investment institutions, and focuses on investing in industrial tracks closely related to the company’s core strategy, such as lo-mei, special flavor condiments, and light catering, and explores the layout of the company. In the future, the “second and third growth curves” will eventually achieve the goal of “building a gourmet ecology”.

Main business analysis

[Operating revenue increased by 24%, operating cost increased by 27%, cost increased faster than revenue, selling expenses increased by 62%, selling expenses increased significantly]

Main business by industry, product, region and sales model

[In terms of regions, Central China, South China, and East China are the top three in terms of revenue contribution]

Significant Asset and Equity Sale

Shenzhen Wangju, a wholly-owned subsidiary of the company, and the relevant shareholders of the Hefu Lao Mian’s E-round financing signed the “Agreement on Equity Transfer and Capital Increase in Jiangsu Hefu Catering Management Co., Ltd.” on June 29, 2021. As of October 2021 On the 22nd, the delivery conditions stipulated in the equity transfer agreement of Hefu Lao Mian’s E-round financing have been fully satisfied. After the completion of the delivery, Shenzhen Wangju’s equity in Hefu Lao Mian has changed from 23.08% to 16.92%, and this equity transaction is finally confirmed. income of $28,000,020.

bussiness plan
Marketing embraces digitalization, and brands continue to rejuvenate

The company’s main target customer group is young people who love food. As Generation Z (those born between 1995 and 2009) gradually become the main force in the consumer market, new changes have taken place in consumption concepts, habits and methods: product purchases are not just about A commodity consumption behavior that combines social, entertainment and identity attributes. In response to new consumption patterns and habits, the company will make full use of digital and community-based tools in brand marketing this year to further enhance the synergy between corporate departments and ecological partners; Content creation, community operation, membership marketing and other methods strengthen interaction with young customers, increase emotional links with consumers, and provide customers with more interesting, interactive and personalized products and experiences.

Explanation on the issuance of securities as of the reporting period

On February 26, 2021, the company’s first extraordinary general meeting in 2021 reviewed and approved the “Proposal on the 2021 Restricted Stock Incentive Plan of Juewei Food Co., Ltd. (Draft)” and its summary and other related proposals. On March 8, 2021, the 19th meeting of the 4th Board of Directors and the 15th meeting of the 4th Board of Supervisors respectively reviewed and approved the “Proposal on Granting Restricted Stocks to Incentive Objects for the First Time”, with a price of 41.46 yuan/ The price of the shares granted 5.594 million restricted shares to 120 incentive objects. For details, please refer to the “Juewei Foods Announcement on the Results of the First Grant of the 2021 Restricted Stock Incentive Plan” disclosed on the website of the Shanghai Stock Exchange (Announcement No.: 2021-037).

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