Listing is the peak, how to break the spell of local dairy companies

Sunshine Dairy only lasted 9 trading days on the most "sunny" days

Looking at China's other second- and third-tier markets, many cities have their own "sunshine dairy": Yantang Dairy in Guangzhou, Manor Ranch in Lanzhou, Huishan Dairy, which was once listed, as well as Mai Quer and Kodi Dairy, which fell from the altar, and Sichuan Jule Shares

Listed for half a year suffered Waterloo

Sunshine Dairy is a veteran dairy enterprise in Jiangxi, the industry covers dairy products, milk beverage research and development, production, dairy animal breeding, scientific research and development and market sales, with "sunshine" and "daily sunshine" two core brands

Sunshine Dairy wrote in the 2022 semi-annual report that combined with the sales channels established by the company, the cold chain transportation system, and the geographical advantages of the company as a local enterprise and localized production, the company has formulated a differentiated product strategy, with "low temperature and fresh" products such as low-temperature dairy products and low-temperature milk drinks as the main products, avoiding direct direct competition

From 2019 to 2021 before the listing, the revenue of Sunshine Dairy was 543 million yuan, 523 million yuan and 631 million yuan, and the net profit was 104 million yuan, 105 million yuan and 136 million yuan

However, after Sunshine Dairy entered the capital market in May this year, its performance was also placed in the

Like the peak of the listing of many small dairy companies, the first semi-annual report of Sunshine Dairy suffered Waterloo - the first half of the year's revenue was 271 million yuan, a year-on-year decrease of 6.

The reason given in the financial report is that Sunshine Dairy is affected by the epidemic in Jiangxi Province from late March to mid-May 2022, schools in Nanchang City and some cities are suspended, residential quarters are restricted, the flow of social personnel is restricted, and the sales channels for milk delivery households are greatly affected

Landing on the capital market cannot directly repair the shortcomings

Compared with foreign competitors, local dairy companies have their own advantages of

For example, in 2019, Sunshine Dairy entered the Anhui market, and in 2021, Anhui Sunshine achieved sales revenue of 15.

In order to break the situation of the sluggish base camp and the unsmooth expansion of the country, local dairy companies have chosen to go to the capital market and seek funds

But the listing is easy and the risk is not small

For example, Mai Quer, who went out of the circle through the road of Internet celebrity, faced a fine

Another brand that also produced explosive products came from Henan Cody Dairy

And the impact of this vulnerability is enormous

More energy needs to be invested in R&D and innovation

In theory, China's milk market, especially the low-temperature milk market, is sufficiently dispersed to leave some breathing space

However, the innovation of low-temperature dairy products is slow and difficult to explode, especially the low-temperature fresh milk that is just being demanded, which has long been in a situation of high loss, low gross profit and sensitive raw milk price, and it is difficult for regional enterprises to exert their fists
in this category.
What is particularly difficult is that the main domestic dairy companies have launched low-temperature fresh milk products, especially the entry of Mengniu and Yili, with the advantage of their brand and channel penetration, directly entering the market of dairy enterprises in other regions to "grab the turf"
.

On the other hand, the maturity of the cold chain transportation industry and the emergence of a large number of low-temperature fresh milk with a longer shelf life of "Chaoba" technology have expanded the sales coverage area of traditional low-temperature fresh milk, and cross-regional competition between regional dairy enterprises has further intensified
.

These factors affect the future development trajectory
of local dairy enterprises.
In the face of high-pressure competition in the market and rising raw material costs, the direction of local dairy enterprises may only be continuous product research and development
.

For example, Yantang Dairy's fresh milk pudding is a new product launched in the first half of this year, this milk product between liquid and coagulated, catering to the trend
of "fresh milk desserts".

In addition, with the help of geographical advantages, seeking more diversified brand cooperation provides ideas
for some regional brands to explore new markets.
New Hope Dairy's high-end milk "Vipshop" has formed a linkage with the coffee brand and quickly gained consumer recognition
in the East China market.
Beijing's local fresh milk brand Sanyuan has cooperated with the new Internet red brand "Lan Xiong Fresh Milk" to create a "sense of presence"
in local catering channels.

In today's consumer goods market, going public is just a financing channel, not a sign
of a company's success.
The funds obtained after going to the capital market can help them enhance the right to speak in the supply chain and invest more research and development and innovation energy
.
Only in this way can local dairy enterprises withstand the double test
of the capital market and the consumer market for a long time.

(Source: Interface)

China Food News (October 11, 2022 04 edition)

(Editor-in-charge: Yang Xiaojing)