After finally turning losses into profits in 2021, bainmei, once the “leader of domestic milk powder”, had another idea.
“At present, the company’s plight has reversed and the situation is clear. We hope that the performance in 2022 will exceed expectations.” Xie Hong, founder, chairman and general manager of bainmei, said at the 2021 online performance briefing held by the company today that the milk powder company headquartered in Hangzhou will continue to promote in accordance with the established business management improvement roadmap, and its largest single product “Aijia” and other businesses have set “higher challenge goals” this year.
In Xie Hong’s view, this year, the infant powder industry will still be in the state of stock game. The repeated superposition of the epidemic situation, the impact of the implementation of the new national standard and secondary registration, the intensification of terminal competition, the accelerated exit of small and medium-sized brands and the further improvement of industry concentration. The substitution of domestic excellent brands for overseas products will accelerate.
“For excellent domestic brands, there are still good structural growth opportunities this year, and we should have better opportunities.” He said. It is revealed that at present, bainmei has submitted the declaration and acceptance of the registration of 45 infant formula milk powder in 15 series, “progressing smoothly”.
Xie Hong, founder, chairman and general manager of bainmei (data and pictures)
Xiaoshidai noted that at the above performance meeting, beinmei’s management, including Xie Hong, had an online communication with investors for more than two hours. It also talked about the company’s next work priorities and performance boosting strategies, and responded to the concerns of many investors, such as how to treat the stock price downturn, the new sheep milk powder plan, whether the price will rise this year, and whether the “milk powder shortage” in the United States will bring new opportunities.
Let’s pay attention.
Is the valuation too low?
According to the financial report recently released by bainmei, in 2021, the company realized an operating revenue of 2.54 billion yuan and a net profit attributable to the shareholders of the parent company of 73.3146 million yuan, a year-on-year increase of 122.61%. In addition, in the first quarter of 2022, the company achieved an operating revenue of 814 million yuan, a year-on-year increase of 43.68%, and the net profit attributable to the shareholders of the parent company was 2012.64 million yuan, a year-on-year increase of 38.45%.
This is also the first annual report handed over by Xie Hong, founder of beinmei, after returning and concurrently serving as general manager. However, although the performance began to stabilize, the share price performance of bainmei was not satisfactory. Xiaoshidai noticed that in today’s exchange meeting, this has become one of the biggest focus topics, and investors’ “take turns to question” the stock price throughout.
“In the context of performance reversal, the stock price hit a new low. Do you think the current market value can reasonably reflect the company’s value?” Asked an investor. More investors spoke sharply: “after beinmei’s listing, the share price rose to 30.97, and now only 4.76 is left. Once st, as the founder, what do you think and what measures do you take?”
In this regard, Xie Hong said simply: “unreasonable.” In response to the questions of other investors, he said again: “I am leading the team to work for a long time, pay close attention to the foundation, strengthen the foundation, accelerate the transformation and recover the lost land.”
“We believe that the value of the company is underestimated, and we will go all out to do a good job in performance and strive to give better returns to shareholders.” Li Zhirong, deputy general manager and board secretary of bainmei, added, “the company will consider restarting the repurchase plan at an appropriate time.”
It is worth mentioning that there was news that Xie Hong had said at an internal meeting that beinmei would “not retire” if its revenue was less than 30 billion and its market value was less than 100 billion. Asked about the timetable for this goal today, Li Zhirong responded: “we will go all out to improve business performance and strive for the early retirement of the founders.”
This is a very ambitious revenue target – you know, bainmei’s revenue last year was only 2.5 billion yuan, with 12 times the growth space from 30 billion yuan.
So, what is the best way for beinmei to grow? The management of the company said today that it has formulated a “road map for operation and management improvement” and is fully promoting the implementation process. In January last year, after Xie Hong returned to beinmei and personally operated the market, he led the team to formulate this roadmap and carried out a series of drastic reforms to the company.
Specifically, by 2022, beinmei’s management mentioned in recent exchanges with investors that it will continue to improve its profitability from the following aspects:
- Continuously optimize the organizational structure and team allocation structure, improve human efficiency, tilt resources to the front line, and link the bonus of all employees with the achievement of business objectives.
- Adhere to the “win-win cycle” of input and output, and strictly implement the goal of “eliminating the inferior with input and output”.
- Continue to promote the transformation to new retail (Note: refers to the mode of direct supply terminal, also known as new retail sales), accelerate the private domain operation and maintenance layout of target users, dynamically and continuously adjust and optimize customers and channels, improve quality and efficiency.
Today, Xie Hong added at the meeting that to promote the “operation and management improvement roadmap”, bainmei also needs to “adhere to the necessary R & D investment” and maintain the industry-leading intelligent manufacturing level; At the same time, the company’s existing industry-leading two-way traceability system for the whole process of products should be used to make the products reach the users actively.
In fact, many of the above improvement directions delineated by the milk powder giant are also places where investors are not satisfied with the current situation. For example, in terms of channels, some investors proposed at the meeting that in recent years, there are fewer and fewer selling points of beinmei in their city, “especially in hypermarkets and supermarkets, beinmei products are placed in insignificant positions such as corners. When consulting salespeople, they will first recommend other brands of milk powder”.
In this regard, Xie Hong replied that bainmei is in the process of channel reconstruction and system reconstruction, and has achieved “remarkable results” at present.
Take the new retail transformation as an example. “Our internal judgment indicates that the successful transformation to the new retail sales direction is that more than 50% of the businesses dynamically track the real-time operation of the whole value chain through online and digital intelligence. In the fourth quarter of last year, we have reached this key index. At present, the business growth under the new retail sales mode continues to improve, and new products will be launched through the direct supply terminal mode.” Li Zhirong said.
He explained at the meeting that the new retail mode of direct supply terminal reduces the distribution links, the operation efficiency of the whole value chain is higher, and the company and cooperative terminals can obtain higher returns. However, the implementation of this mode needs to be based on the company’s full realization of the Internet of things, the full chain closed loop of production, supply and marketing and member service system, so it has a certain threshold.
“Our product has a very high performance price ratio and is also the first product to be promoted by consumers.” Li Zhirong revealed that the single month sales of the new product keruixin in April was close to the whole year of 2021, and the current growth is strong.
For the sales of offline traditional channels, the company said that it is currently facing certain challenges. “We are also actively combing and adjusting large supermarket channels such as China Resources, childrenWang and Wal Mart, so as to improve input-output efficiency.”
Sheep milk powder and special medical food
To achieve the goal of 30 billion revenue, it is difficult to rely on infant formula alone. Xiaoshidai noted that in terms of the opportunities and layout of the categories, bainmei mentioned in the latest financial report that while strengthening the main categories, it plans to develop market segments and create a new product matrix in the future.
“Seize the opportunity of the rapid growth of sheep milk powder, organic milk powder and nutrition products, and accelerate the implementation of ultra-high-end products. Improve the layout of special medical categories for infants and young children, pay attention to the needs of special medical groups for adults, and continue to accelerate the research and industrialization of formula food for special medical purposes. Expand the scope of children’s food promotion and create the concept of beinmei parent-child healthy snacks.” The company said.
At present, beinmei mainly deals in large single products such as “Aijia”, “keruixin” and other infant formula milk powder, champion baby series nutritional rice flour / rice paste, as well as a variety of special medical formula milk powder, milk based nutrition and so on. According to the financial report of 2021, beinmei successively listed new products such as “eye color” series lutein ester prepared milk tablets, “Mars baby” series children’s milk powder, Doudou milkshake, “sheep Yibei” series formula sheep milk powder and so on.
Xiaoshidai noted that bainmei’s latest move to enter the sheep milk powder market has also aroused the interest of many investors today. In January this year, in the Limited gift box for the Spring Festival of the year of the tiger distributed to shareholders by the company, there were two new types of sheep milk powder, namely “sheep Yibei high calcium and multi-dimensional probiotic formula sheep milk powder” and “sheep Yibei children’s formula sheep milk powder”, but they have not yet been officially listed for sale.
“The company’s sheep milk powder category is currently under planning, and the future of the sheep milk powder market is worth looking forward to.” Xie Hong said today.
It is reported that the above new sheep milk powder may be produced by beinmei’s new factory in Tianjin. Therefore, a lot of attention was paid to when the factory was put into operation. According to the company’s previous plan, the Tianjin plant will increase the annual production capacity of 10000 tons of infant formula, 5000 tons of organic infant formula and 5000 tons of milk based nutrition.
“At present, the Tianjin factory project is still under construction and is about to be completed and accepted. It is expected to be ready for use on September 30, 2022. The Tianjin factory will promote the listing of relevant products according to the plan.” The company’s management said.
In addition, Xie Hong mentioned at the meeting that bainmei is very optimistic about and attaches great importance to the future development of formula food for special medical purposes. “Special medical products really reflect the attributes of professional consumer goods. At present, the company has registered four special medical foods, which are in short supply, and is considering expanding production capacity.” In this market segment dominated by foreign milk powder enterprises, bainmei is one of the few domestic milk enterprises that deeply layout special medical products.
Xiaoshidai noted that today, Xie Hong and other beinmei management will also respond to a series of recent topics of concern in the industry.
The impact of the epidemic since March this year has undoubtedly become one of the most concerned issues for many investors. “The supply gap of foreign brands has brought opportunities to domestic big brands. During the Shanghai epidemic, our consumers in Shanghai did not decrease, but increased significantly.” The management of the company responded today that bainmei is a government designated livelihood protection unit.
However, the epidemic has had a huge impact on the supply of milk powder in the US market. “The shortage of infant milk powder in the United States is mainly due to the supply chain problems caused by the epidemic, and the United States has a strict protection mechanism for local infant milk powder manufacturers. In view of this, the company has strengthened the guarantee of the product supply chain to ensure that its products can meet the market needs in time.” Beinmei said today.
When asked whether there are plans to export milk powder to the United States, Xie Hong said: “the shortage of milk powder in the United States shows that the safety and supply of milk powder is a worldwide problem. We will work hard and first to ensure the safety of rations for Chinese babies.” It is reported that beinmei has EU version related products, but its export business is still at a standstill.
In addition, the snack generation noticed that for this year’s plan, some investors asked whether bainmei would raise its price. Jin Zhiqiang, the company’s chief financial officer, replied that bainmei would continue to improve the company’s net interest rate by strengthening operation and management, improving efficiency, reducing costs and increasing efficiency, but “does not rule out timely adjustment of prices according to market conditions in the future”.
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