China Food

Jiansynthetic is the third largest player of infant formula in China, and the CEO also plans to overweight pet food

Under the multiple challenges of COVID-19 and the declining birth rate, the Jianhe group, which owns the joint health, Swisse and high quality brands, is trying to find new growth points.

Yesterday, Jianhe (H & H) International Holdings Co., Ltd. released the annual results of 2021. According to the financial report read by xiaoshidai, as of December 31, 2021, the group’s revenue was RMB 11.55 billion, with a reported increase of 3.2%, the adjusted comparable EBITDA was RMB 1.852 billion, a year-on-year decrease of 10.3%, and the adjusted comparable net profit was RMB 953 million, a year-on-year decrease of 12.4%.

Among them, the revenue of mainland China market is 9.085 billion yuan, accounting for 78.7% of the total revenue, which is still the largest contributor to the group’s revenue. “This is due to the decline in the sales of infant nutrition and care products (BNC), mainly due to the decline in the sales of probiotics. At the same time, the adult nutrition and care products (ANC) and pet nutrition and care products (PNC) businesses in mainland China continue to bring considerable revenue growth.” Jianhe pointed out.

Performance of Jianhe in 2021

“Despite the adverse factors we face in the industry, especially for the infant nutrition and care products division in mainland China, we proactively predict and respond to market conditions and seek opportunities in our global core markets.” Laetitia Garnier, CEO of Jianhe group, said that in 2021, Jianhe group achieved the goal of sustained annual income growth and completed the strategic layout of family nutrition and health.

Xiaoshidai learned that Jianhe held a 2021 performance meeting this morning. The management of the company further interpreted the business performance in the Chinese market and the plan for 2022, and talked about inflation expectations and debt levels.

An Yuting, CEO of Jianhe group (data picture)

Let’s have a look.

Sheep milk powder and ultra high end

According to the financial report, in 2021, Jianhe’s BNC business revenue reached 6.61 billion yuan, which still contributed the largest proportion of the group’s revenue, of which the revenue of infant formula was 5.146 billion yuan.

Performance of Jianhe in 2021

Let’s focus on the mainland market.

In 2021, in mainland China, the total revenue of Jianhe BNC business was 6.156 billion yuan, a year-on-year decrease of 10.8%; Among them, the income of infant formula milk was 4.983 billion yuan, down 2.7% year-on-year. “This has been partially offset by the growth of sheep milk powder, which contributed 9.1% of sales last year, with a growth rate of 42.7%,” an Yuting pointed out at the meeting.

“Compared with previous years, the decline of China’s birth rate has reduced the overall market and demand for infant nutrition and care products. In order to alleviate this situation, we actively expand the distribution scope of infant formula products to low-level cities, and focus on super high-end infant formula milk powder and infant formula sheep milk powder.” She said.

Heshengyuan infant formula sheep milk powder

It can be seen that under the “market contraction”, heshengyuan sheep milk powder went out of a wave of independent market against the trend, and became the “most dynamic single product” of Jianhe BNC business with a bright growth of 42.7%. According to Nielsen data, as of December 31, 2021, the market share of heshengyuan sheep milk powder reached 4.1% (2020: 3.2%), rising to the third place, and the growth trend of market share accelerated.

“The group will further enhance the market penetration of heshengyuan sheep milk powder and accelerate its deep cultivation in the Chinese market.” Health combined.

Market share performance of Jianhe in 2021

On the other hand, Jianhe has also achieved good growth in the field of ultra-high-end infant formula milk powder. According to Nielsen’s data, as of December 31, 2021, the retail sales of Jianhe ultra high-end infant formula milk powder increased strongly by 22.5%, accounting for 11.1% (2020: 10.8%), ranking third.

Overall, Jianhe group ranks sixth in China’s infant formula market with a market share of 5.8% (2020: 5.7%), maintaining a stable market position.

“However, as more brands enter the market, we expect fierce competition in the market share of infant formula industry, especially infant formula sheep milk powder. This year, we will focus on improving single store sales through expanding distribution strategies to continue to stabilize our market position and profitability.” An Yuting said.

BNC and ANC business performance of Jianhe in mainland China

Compared with milk powder, the growth pressure of probiotics is greater.

According to the financial report, in 2021, the revenue of Jianhe probiotic supplements in mainland China was 957 million yuan, a year-on-year decrease of 31.1%. “This is mainly affected by the strong base effect in 2020 and the intensification of competition.” An Yuting explained that, especially in the first half of 2020, sales increased by more than 40% year-on-year. During the first phase of the epidemic, there was an unprecedented demand for immune support products, and the demand for immune products “returned to normal level” in 2021.

“However, with the continuous improvement of people’s health awareness, the overall probiotic market still has great growth potential.” An Yuting said that the probiotic supplement business is expected to gradually return to the long-term growth trend in 2020, which is mainly driven by measures such as distribution and customer education, such as improving the penetration of categories.

Probiotic products

More “blue hats”

Swisse’s ANC business recorded good growth.

The financial report shows that in 2021, the global growth of Jianhe ANC business reached 8.8%; Among them, the revenue of mainland China market increased by 10.8% year-on-year, accounting for 63.5% of the group’s ANC business revenue.

Jianhe said that ANC branch achieved a considerable double-digit growth of 48.7% in the online and offline channels of general trade in mainland China, which is due to the introduction of more new localized products by expanding innovative categories and obtaining more regulatory approvals of “blue hat”, so that the products can be sold in the general trade channels.

Performance of Jianhe ANC business in mainland China in 2021

Xiaoshidai learned that at present, Swisse has launched 9 products that have passed the China health food registration (“blue hat”). Among them, calcium tablets, men’s vitamin tablets, liver protection tablets, collagen Shuiguang tablets, grape seeds, whey protein powder and other six single products have sold more than 100 million in the Chinese market.

In addition, in 2021, based on the needs of market segments, ANC launched Swisse me health snack brand, little Swisse children’s nutrition and health care product brand, and Swisse Plus + milk thistle Jinggan tablet.

Swisse products

On the online channel, Swisse still maintains the “leader” position in China’s nutritional supplement market.

According to the data of earlydata, a third-party e-commerce data monitoring company, as of December 31, 2021, Swisse continued to rank first in the online vitamin, herbal and mineral supplement market in mainland China, with a market share of 5.9%. During the 618 and double 11 shopping festivals, Swisse’s product demand and sales performance were strong, ranking the top 1 in the category of health products on the e-commerce platform.

“In 2021, Swisse maintained its leading position in the overall online supplement market in mainland China, and achieved remarkable results in the 618 and double 11 online shopping festivals, which strengthened our confidence in its sustainable growth potential.” An Yuting said that in the future, the group will continue to introduce more “blue hat” and localized innovative products, make use of the brand advantages of online and offline channels, and further grasp the growing health needs of consumers.

Bet on pet food

It is worth noting that in recent years, Jianhe has repeatedly invested heavily in its PNC business, which has become the key area of the company’s layout and hopes to become the “third largest business pillar”.

Earlier, in November 2020, Jianhe announced that it would acquire solid gold, an American pet nutrition company, for us $161 million. Then in August, it announced that it planned to acquire zesty paws, a high-end pet supplement brand, for us $610 million, and complete the acquisition in October 2021.

Performance of Jianhe PNC business in mainland China in 2021

So, what’s the latest performance of this business?

Xiaoshidai noted that in 2021, Jianhe PNC business dominated by solid gold achieved double-digit growth of 37% on a similar basis (Note: the sales growth was based on the full year revenue of solid gold and zesty paws in 2020 and 2021), and achieved strong growth in both Chinese and American markets.

Jianhe pointed out that since solid gold was officially sold in the Chinese market in April 2021, the contribution of revenue in China has increased significantly, and the revenue increased by 45.3% last year. In the first double 11 Shopping Festival after entering the Chinese market, solid gold ranked top 1 in imported cat food stores and top 1 in imported cat food items on tmall platform.

An Yuting said at the meeting that at present, in the Chinese market, solid gold has not only started selling on e-commerce platforms such as tmall and, but also entered offline channels such as chain pet stores and private pet stores. “The way we expand offline is similar to the way we expand our channels in mother and baby stores in China, and we will continue to do so. Consumers may know and buy this brand online for the first time, but we need to make sure they can find it offline.”

Products of solid gold

She also revealed that in January this year, solid gold has obtained seven import registration certificates issued by China’s Ministry of agriculture and rural areas. In 2022, it plans to launch a better product portfolio to meet more consumer demand, which will promote business growth in the future.

In 2021, the annual sales of zesty paws reached a new high, reaching US $110 million on an independent basis, with a strong double-digit growth of 43.6% compared with last year. Over the past three years, the brand has ranked first among the well-known e-commerce shopping platforms Amazon and chewy pet nutritional supplements in the United States, accounting for 15.9% and 17.7% respectively in 2021.

In the future, zesty paws will gradually expand to other global markets, including entering the Chinese market from cross-border e-commerce channels.

Zesty paws products

“In the future, our PNC division may become one of the main growth drivers of our world, and its growth rate is expected to further improve in 2022. In order to ensure that we lay a solid foundation for the success of mainland China, we will continue to invest in establishing a sustainable active sales model and bring synergy to the two brands of solid gold and zesty paws.” An Yuting said.

At the same time, the company also pointed out that these models will help solid gold and zesty paws share business information in the early stage of business development, but “such investment will curb the profit growth in mainland China”. In the short and medium term, most of PNC’s profits will come from the US market.


Looking forward to 2022, Jianhe believes that the challenges are expected to be no less than those in 2021, and the challenges faced by the infant nutrition and care products business are even greater. However, it also expects that the adult nutrition and care products and pet nutrition and care products business will continue to maintain a strong sales momentum, and has “full confidence” in the long-term prospects of the products, the regional diversification strategy and the ability to realize the vision of becoming a global leader in high-end nutrition and health.

Jianhe brand

The company pointed out that the business performance of infant formula milk powder will continue to be limited by the low birth rate and the adverse impact of regulations. The infant formula business is also likely to face increasingly fierce competition as more participants enter the market. “We will continue to stabilize the market position and the profitability of the infant formula business by expanding distribution and improving the output of a single store.”

“In the field of infant formula sheep milk powder, we still have a lot of room for progress. I think we have all the elements to continue to grow in this field. We have changed from No. 1 player in this segment to No. 6 (in 2020) and then to No. 3 last year, and we will continue this momentum.” An Yuting mentioned in response to analysts’ questions at the meeting.

Jianhe 2022 performance guidelines

Meanwhile, in 2022, Jianhe’s profits will also face the pressure of rising inflation.

“We will closely observe the impact of rising raw material and logistics costs on profitability and actively respond to the impact through a number of measures, such as optimizing the product portfolio, increasing the selling price of selected items according to market benchmarks, improving expenditure efficiency and purchasing raw material substitutes.” Jason Wang, chief financial officer of Jianhe group, said in response to analysts’ questions at the meeting.

Xiaoshidai noticed that after the large acquisition, Jianhe’s cash flow and debt situation also attracted attention from the outside world.

Jason Wang pointed out at the meeting that as of December 31, 2021, the group’s total cash balance was 2.4 billion yuan, maintaining a healthy and stable cash flow, which helps to support the group to better meet challenges and help the group’s steady and long-term development.

Jianhe’s leverage level

As for the debt situation, he said that after the acquisition of Swisse in 2015, Jianhe’s leverage ratio also reached 3.24, but thanks to the subsequent successful integration and the group’s business model of generating high cash flow, this figure soon fell below 2.

“Therefore, based on the past successful experience and the group’s high cash flow business model, (after the acquisition of zesty paws this time), we are confident that we will reduce the leverage ratio to less than 2 again in the next three years.” Jason Wang said.

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