文 | AI Xiangzhou Intern Zhou Xiang 玥
Edit | Lu Ming
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Taking advantage of the instant”rejuvenation period” of instant noodles during the epidemic, Master Kong announced his latest report card.
On March 23, Tingyi Holdings released its 2019 performance report and stated that during the reporting period, it realized revenue of 61.978 billion yuan, a year-on-year increase of 2.13%; net profit of 3.331 billion yuan, a year-on-year increase of 35.22% Both revenue and net profit exceeded market expectations.
In addition, in the two main businesses of instant noodles and beverages, profits have increased significantly. According to the financial report, the net profit of instant noodle business was 2.2 billion yuan, a year-on-year increase of 28.74%; the net profit of beverage business was 946 million yuan, a year-on-year increase of 72.39%.
Affected by this, Tingyi ’s stock price has risen. As of the close of March 24, Tingyi ’s stock price was 13.52 Hong Kong dollars, with a total market value of 76.034 billion yuan, about half of the peak period.
42-year-old” second generation”takes over
It is worth noting that this is actually the first transcript since Master Kong ’s founder Wei Yingzhou, the eldest son Wei Hongming, handed over in December 2018.
Public information shows that Wei Yingzhou is the founder of Dingxin International Group and the boss of the four brothers of the Wei family.
In 1989, Wei Yingzhou and his three younger brothers, who were not doing well in Taiwan, came to the mainland with NT $ 150 million to test the water and continued to do their old business in the oil processing business. During the three years from 1989 to 1991, I have tried products such as”top good sesame oil”,”Kang Cai omelette”, and sesame oil, but because the pricing does not match the purchasing power of consumers in the mainland market, NT $ 150 million Loss of more than half quickly.
However, the association with instant noodles completely changed this situation. In 1991, the oldest of the Wei brothers, Wei Yingxing, ate instant noodles brought from his hometown in Taiwan on the train. Unexpectedly, the scent attracted everyone to watch. From time to time, some people asked to come and ask where to buy such noodles.
The Wei brothers saw the business opportunity. In September of that year, Tianjin Dingyi International Food Co., Ltd. was established and entered the instant noodle industry. It mainly produced Master Kong instant noodles and dried vegetables.”Beef noodles”, thus starting Master Kong’s legendary journey.
With a bowl of braised beef noodles, Master Kong started to hang all the way and quickly spread across the river. In just over three years, the master’s turnover soared from 27 million yuan in 1992 to 2.45 billion yuan in 1995, a nearly 100-fold increase. In 1996, Master Kong started to enter the pastry and beverage field and landed on the Hong Kong Stock Exchange in the same year.
Afterwards, Master Ting began to expand vigorously, and successively acquired fried chicken brand Dixie and Taiwan’s largest dairy brand at that time, Weiquan, and ushered in its own highlight moments in 2013. According to statistics from the World Instant Noodle Association, the annual sales of instant noodles in China reached 46.22 billion copies, and Master Kong alone accounted for 47.4% of the total sales, exceeding 20 billion bales, and accounted for 57.1% of the sales, becoming the leader of the instant noodle industry.
(Photo source:Visual China)
In December 2018, Master Kong, the food empire, ushered in a” replacement”moment, announced in 2019 From January 1, Wei Hongzhou’s eldest son Wei Hong took the post of chairman of the board of directors, and the third son Wei Hongzhen took the position of executive director of the board of directors.
According to the information at the time, Wei Hong was 42 years old and holds a degree in mathematics from King’s College, University of London, UK, a master’s degree in mathematics from Buniel University, and a master’s degree in management from Stanford University. He worked at Microsoft Co-founder Paul Allen, a US-based Makena Capital company, works as an asset allocation analyst.
In 2006, Wei Hongming joined Master Kong Holdings as the project manager of the president’s office and entered the board of directors as an executive director in 2015. During this period, he led the management and management system of the MIS group promoted by a number of international consultants. Development plans and other major projects.
According to Forbes ’list of the top 50 richest people in Taiwan in 2020, the Wei Brothers topped Taiwan ’s richest man with a net worth of $ 7.2 billion, while Guo Taiming fell to $ 6.9 billion due to the decline in Hon Hai ’s stock price. fourth.
The instant noodle market is picking up, and it makes 2.2 billion a year.
Previously, the sorrow of”instant noodles are not easy to sell” swept the entire instant noodle industry after being attacked by takeaway. According to data from the World Instant Noodle Association, the demand for instant noodles in China continued to decline from 2013 to 2016, with annual sales falling from 46.22 billion bales. To 38.52 billion bales, a drop of 16.66%.
The decline in sales directly affects the level of performance. Since 2013 reached a peak of 75.795 billion yuan in revenue, Master ’s performance has begun to decline. From 2013 to 2016, Tingyi’s instant noodle revenue has fallen from US $ 4.332 billion to US $ 3.239 billion, which has shrunk by more than US $ 1 billion.
At the same time, Master Kong ’s stock price has also been in a state of endless fluctuations. In 2011, Master ’s stock price once reached the highest value of 23.9 Hong Kong dollars, with a total market value of 140 billion Hong Kong dollars. But by August 2016, its share price had fallen to HK $ 6.35, with a market value of only HK $ 35.67 billion.
However, starting in 2017, with the gradual recovery of the instant noodle industry, Master ’s performance has also started to improve.
From 2017 to 2019, the revenue of Master ’s instant noodle business was 22.62 billion yuan, 23.917 billion yuan, and 25.3 billion yuan, up 4.91%, 5.73%, and 5.79% year-on-year, accounting for 38.37 of the total revenue %, 39.41%, 40.82%; net profit was 1.491 billion yuan, 1.709 billion yuan, 2.2 billion yuan, an increase of 27.34%, 14.63%, 28.74% year-on-year, accounting for 81.97%, 69.39%, 66.05 of the total net profit of Master Kong during the same period %.
From the financial report data, instant noodle business is the most important part of Master Kong’s current profit, and since 2017, the business has maintained continuous growth in revenue and profits. Calculated at the price of Master Kong’s ordinary instant noodles at 2.5 yuan/pack, the number of instant noodles it can sell per second has increased from 287 packs to 321 packs.
In addition to market trends, the continuous overweight of the high-end market is also an important driving factor for the recovery of its instant noodle business.
Since 2016, Master Kong has launched a series of super high-end flavors, such as the”black and white pepper” and”golden soup” series of about 5 yuan, and the”EXPREESS noodle shop” with an average price of about 25 yuan. Instant noodles, and pointed out in the financial report, its instant noodle business focuses on consolidating high prices and high-end markets, simultaneously expanding ultra-high-end markets, and achieving sales growth.
Master ’s high-end strategy is undoubtedly effective. According to Nielsen data, in the first half of 2019, Master Kong has a firm foothold in the ultra-high-end noodle market above 10 yuan, with a market share approaching 70%. In terms of the composition of Master Kong’s instant noodles in 2019, the revenue of container noodles, high-value bag noodles, and medium-value bag noodles from high to low was 12.321 billion yuan, 10.198 billion yuan and 2.59 billion yuan, respectively, an increase of 4.46%, 6.89% and 8.66%.
The announcement shows that the increase in Master Kong ’s instant noodle business is mainly due to other income and net income growth year-on-year growth, other operating expenses decreased year-on-year, and other reasons, resulting in an increase in instant noodle profits.
In the meantime, the instant noodles”restored” caused by the outbreak of the new crown pneumonia epidemic may add to the Master Kong’s instant noodle business in 2020. In response, Master Kong stated in his financial report that he expects the noodle business to grow well in 2020.
Data show that since February, the overall sales of convenience foods on Tmall platform have also increased by 700% year-on-year, and the search volume for the term”instant noodles” has increased more than 200 times. On March 24th, AI Finance reported that Master Kong’s instant noodle sales on the Tmall platform found that its monthly sales were more than 10,000.
In addition, it is worth noting that in recent years, although Master Kong ’s market share in instant noodles still ranks first in the industry, both the sales market share and the sales market share Gradually falling. According to Nielsen data, its sales market share and sales market share decreased from 46.8% and 56.4% in 2014 to 43.3% and 46.6% in 2019, respectively.
Beverage profits have increased sharply, but private labels have become increasingly unsaleable
Compared to the”good selling” of instant noodles, Master Kong’s other pillar business drinks are somewhat”unsellable”.
The data shows that in 2019, Master ’s beverage business ’s overall revenue was 35.6 billion yuan, a slight increase of 0.81% year-on-year, compared with 1.61% and 6.96% in 2017 and 2018. Net profit was 946 million yuan, a year-on-year increase of 72.39%, while the growth rates in 2017 and 2018 were 141.75% and 28.82%.
In terms of the specific income composition of beverages, in 2019, Master ’s own brand of ready-to-drink tea and drinking water sales were 15.557 billion yuan and 3.114 billion yuan, down 0.70% and 28.99 year-on-year respectively. %; While the sales of fruit juice drinks and OEM-produced coffee, beverages, lactic acid bacteria, etc. have steadily increased to 12.237 billion yuan, an increase of 11.91% compared to 10.935 billion yuan in 2018.
Drinks business accounted for 57.44% of Master ’s total revenue, sales of instant tea and drinking water increased The sharp decline in speed has directly weighed on Master Kong ’s overall performance, and while the growth rate of instant noodle business performance has accelerated, although both total revenue and net profit have been increased, the overall growth rate is gradually slowing down.
According to Master Kong ’s annual reports, from 2017 to 2019, its revenue was 58.954 billion yuan, 60.886 billion yuan, and 61.978 billion yuan, a year-on-year increase of 6.07%, 2.94%, and 2.13%; net profit was respectively It was 1.919 billion yuan, 2.463 billion yuan and 3.331 billion yuan, an increase of 56.59%, 35.42%, and 35.22% year-on-year.
However, for now, Master Kong still holds the leading position in China’s beverage industry. According to Nielsen data, in 2019, Tingyi ’s ready-to-drink tea sales market share was 45.7%, continuing to rank first in the market; the sales of fruit juice and ready-to-drink coffee were 15.9% and 17.6%, respectively, both in the market The market share of packaged water sales was 5.4%, which was about 40% less than the 8.7% market share in 2018.
Master Kang said that although beverage sales faced the impact of the decline in the number of terminal stores during the epidemic, rebound consumption is expected after the epidemic. Overall, it is expected that the instant noodle business will grow well in 2020, and the beverage business is expected to have short-term pressure on revenue and shipments due to the epidemic, and it will rebound at a high speed in the second half.