China Food

Aoyou milk powder is on sale!

In the challenging first half of 2020, Aoyou still handed in a “satisfactory” report card.

Last night, Aoyou Dairy Co., Ltd. (1717. HK) released its first half of 2020 results. According to the financial report, in the first half of the year, the company realized revenue of 3.859 billion yuan (RMB, the same below), with a year-on-year increase of 22.6%. After adjustment, the profit attributable to equity holders of the company was 575 million yuan, an increase of 32.1% year on year.

Among them, the business income of Aoyou’s own brand formula milk powder was 3.411 billion yuan, with a year-on-year growth of 25%, accounting for 88.4% of the company’s total revenue, mainly including formula milk powder and formula sheep milk powder. Up to now, Aoyou has obtained registration of 15 series of 45 infant formula.

This morning, Aoyou chairman Yan Weibin and other senior executives attended the performance meeting for analysts. Xiaoshidai learned that the company’s management further disclosed the performance, structure adjustment, annual expectation and strategy of probiotics new business of its formula milk powder and formula sheep milk powder business at the meeting.

Yan Weibin, chairman of Aoyou (materials and pictures)

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Integration of milk powder business

Let’s first look at the milk powder business, which accounts for the largest proportion of revenue.

According to the financial report, in the first half of the year, the sales revenue of Aoyou’s own brand formula milk powder was 1.755 billion yuan, up 24.5% year on year. Among them, the revenue of hiponok bio, which focuses on the super high-end market (it owns heponokai 1897 Hezhi, hiponokai 1897 extract protection and Youlan) reached 1.155 billion yuan, with a year-on-year increase of 66.4%, and continued to be the fastest growing business unit of Aoyou.

“Our revenue mainly comes from the retail channel of mother and child, accounting for about 95%. The trend of offline milk powder retail focusing more and more on maternal and infant stores is very obvious. ” At today’s performance meeting, Liu yubiao, vice president of Aoyou China and general manager of hiponokai Biotechnology Co., Ltd., revealed that as of June 30, about 10380 maternal and infant stores had realized dynamic sales every month, an increase of nearly 12% over the number of effective stores last year.  

Next, hapnokai will continue to increase the number of maternal and infant channels. He said that at present, there are more than 100000 maternal and infant retail stores in China, “we will gradually expand according to our own development and team service ability, and at the same time, we also need to add new categories and brand lines.”.

Talking about this year’s performance expectations, Liu yubiao said at the meeting that although the epidemic situation this year and the increasing competitive pressure, hipnokai biological is still confident that “based on last year’s net growth of 40% – 50%”.

Liu yubiao, vice president of Aoyou China region and general manager of hapnokai Biotechnology Co., Ltd. (information photo)

It is worth noting that in the first half of this year, Aoyou restructured its milk powder business.

Specifically, Aoyou has merged nerido and nuleco to focus on the development of nerido brand; meanwhile, it has adjusted the milk powder brands “Chuncui” and “pachun” originated from Australia to be operated by Menado, hoping to make meadows a representative brand of Australian milk powder. “This reorganization will make the company’s brand strategy and resource integration clearer, and help these business units achieve greater success.” You said.

In addition to business adjustment, nerido and menadol have also expanded their product lines in the first half of this year, launching maternal and maternal formula milk powder and children’s formula imported from Holland and New Zealand.

Double digit growth of goat milk powder

Let’s take a look at the Aoyou sheep milk powder business where Gabriel is located.

According to the financial report, in the first half of the year, the sales revenue of Gabriel mutton milk powder produced in the Netherlands reached 1.656 billion yuan, up 25.5% year on year. On this track, Aoyou sheep milk powder products still maintain the leading position in China. According to the data of AC Nielsen quoted in the financial report, the sales share of Gabriel in the imported infant formula sheep milk powder was 61.1% and 64% in 2018 and 2019, respectively.  

However, in the second quarter of this year, due to the impact of the epidemic, the growth rate of Gabriel slowed down. Li Yimin, vice president of Aoyou China and general manager of jiabeiaite, said at the meeting that, first of all, the core reason for the slowdown in growth is fleeing goods.

“There are only 28000 stores in China, which are not effective in many aspects. On the other hand, in the first half of this year, gabriette increased its advertising investment (for example, planting the “wind and waves sister”), so more consumers will come to the store to buy our products, which will cause the problem of fleeing goods in some stores that we have not cooperated with, which will affect our current cooperative stores. In the case of the decline of terminal passenger flow this year, the latter will not be very willing to We want to promote our products. ” She said.

In order to solve this problem, Li Yimin said that since July this year, all products sent by Aoyou have been attached with traceable internal codes, so as to strengthen market control through this technical tool. “As the original stock on the market is gradually digested, we expect that around the fourth quarter of this year, our products in the market will be basically all with internal code.” She said.

Secondly, Li Yimin pointed out at the meeting that the growth rate of Gabriel in the second quarter slowed down, because after the outbreak of the epidemic in Europe in the first quarter of this year, the brand decided to give priority to the production of 800 grams of products. Therefore, in the first half of this year, there was a shortage of 400 grams and 150 grams of small packaging products for the development of new customers, which affected the promotion of innovation.

However, production of the products has been resumed. “In July, our 400g product has been delivered to the market, so it is helpful for our new customer development. We have seen the number of new customers gradually rising. The 150 gram product has also resumed production and is expected to be released to the market in September. ” She said.  

Li Yimin, vice president of Aoyou China and general manager of jiabeiaite (materials and pictures)

Talking about the full year’s expectation, Li Yimin said at the meeting that the Aoyou sheep milk powder business (namely Gabriel) expected to achieve “a growth of 20% at the bottom and a sprint of 25% growth” this year.

Probiotics of “new growth pole”

Xiaoshidai noticed that in today’s performance meeting, the company’s management also used a lot of space to mention the new probiotic brand “aiyisen”, which was newly launched in July this year. “We still have a big strategic dream in probiotics.” Yan Weibin, chairman of Aoyou, said at the meeting today.

This business is expected to become the “new growth pole” of Aoyou. Xiaoshidai has introduced that at present, aiyisen is operated by the team of jiabeite, the main brand of Aoyou. A series of new probiotics have covered children and adults. The next step is to continue to expand the probiotic product line and develop strains suitable for more people.

“For probiotics, the group has invested a lot of resources, and we have made the layout of the whole industry chain. Because we have just come into the market this year, our product categories are not very complete. At present, we are launching products suitable for children and adults. We expect to launch probiotics products for infants and young children by the end of this year or early next year. ” Aoyou management said today.

In fact, as early as 2016, Aoyou began to add more probiotics.

In September 2016, Aoyou completed the acquisition of nutrition care, an Australian nutrition brand, and introduced a number of products including probiotics into the Chinese market.

Subsequently, Aoyou indirectly acquired 26.1% equity of Fenghua Biotechnology Co., Ltd. (hereinafter referred to as “Fenghua biotechnology”) in July last year, and acquired all equity of aunulife Pty Ltd, a wholly-owned subsidiary of Fenghua biotechnology. It is reported that the “yingyangyuan” applied in aiyisen’s new products is the research result of Fenghua biotechnology in 2019.

Yan Weibin has previously said that entering the probiotics field is the “inevitable choice” of the company’s strategy. In addition, there are not many enterprises in Asia with international first-class competitiveness in the research and development of high-end probiotics and mushroom powder production, which also gives Aoyou a great opportunity.

According to Euromonitor International data, the global probiotic market value in 2019 is about 40 billion euro (about 300 billion yuan). China’s probiotics market is growing at an average annual growth rate of 15%, which is expected to reach nearly 90 billion yuan in 2022.

Xiaoshidai noted that at today’s performance meeting, the management of Aoyou said that for the newly listed probiotics business of aiyisen, no specific profit target has been set for the time being, but it is predicted that it will bring a sales revenue of nearly 20 million yuan to the company in the second half of this year.

“Next year, we now have a relatively specific goal. We hope that the sales of probiotics will exceed 60 million next year with more and more complete product lines. Meanwhile, in the next three years, we will be able to develop at a growth rate of no less than 30% Aoyou management said today.

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