Regional dairy companies are facing the problem of slowing growth, and mergers and acquisitions will become the key to breaking the situation

On the evening of April 24, Sanyuan Shares (600429.

The announcement shows that in 2018, Sanyuan's operating income was 7.

However, the reporter noticed that the performance of Sanyuan shares is an industry case.

As the largest regional dairy company in China, Bright Dairy (600597.

New Dairy (002946.

The situation of Yantang Dairy in the Pearl River Delta is similar.

During the same period, Yili achieved a total operating income of 79.

Song Liang, an independent dairy analyst, told reporters that the recovery of domestic dairy consumption since 2015 was not due to the rapid growth of total consumption, but to the adjustment of product structure based on consumption upgrades; In contrast, Yili Mengniu has squeezed the regional dairy market with its brand and volume advantages

Another industry person pointed out that although dairy companies in various regions have launched a large number of new products in recent years, most of them are upgrading products on the basis of the original, and there has not been much breakthrough in large categories, and the homogeneity of market products is serious

Figures from the National Bureau of Statistics show that in 2017, China's dairy product output reached 29.

In Song Liang's view, the domestic dairy product market will still maintain long-term growth, but the growth of total consumption has encountered a bottleneck, and the market has shifted to stock competition.

For the two major dairy giants with deep pockets, business diversification and overseas expansion are mainly used

Lu Minfang, CEO of Mengniu Dairy, once said that Southeast Asia has a population of 650 million, which is equivalent to half the Chinese market, and the consumption of local dairy products lags behind China, making it the most worthy market for domestic dairy companies to control

But for regional dairy companies that lack capital and brands, playing a good M&A card may be the main way out for large-scale growth and growth in the future

In the performance of Sanyuan shares, previous mergers and acquisitions have brought great help

Although in 2018, the revenue growth of Sanyuan's core market Beijing was only about 3%, but after the completion of the consolidation, the French company contributed 840 million yuan to the 1.

This performance also made Sanyuan shares taste the sweetness.
At the end of February this year, Sanyuan shares invested another 4 million euros to establish a wholly-owned subsidiary in China, ready to introduce its products into domestic sales, and expressed that it will actively demand domestic and foreign cooperation.
Opportunities, through the two-wheel drive of connotative development and extensional mergers and acquisitions, to promote the company's transformation and upgrading
.

Zhu Danpeng, a researcher at the China Brand Research Institute, told reporters that the previous expansion model of regional dairy companies was through nationalization, but past experience has proved that if the existing product lines are deployed nationwide, the cost is high, the time is long, and there is no differentiation advantage, and the three It is a coup for Yuan shares to use mature French projects as a new business growth point.
Of course, it also depends on the landing ability of Sanyuan shares in China
.

It is worth noting that domestic horizontal mergers and acquisitions have also begun to emerge
.

On April 22, Xin Dairy issued an announcement announcing that the company had signed a framework agreement with Fuzhou Jianshi Food Co.
, Ltd.
and its "Auscow" brand.
Dairy company as the acquisition target, New Hope Dairy will acquire a 55% stake in the new company
.

New Dairy is targeting the South China market, which has not yet been deployed, but Fujian was originally the sphere of influence of the regional dairy enterprise Changfu Dairy.
The reporter learned that New Dairy and Changfu Dairy had previously acted as allies to jointly fight against the national dairy enterprises.
Invasion", the industry also believed that the new dairy industry will carry out deeper cooperation with Changfu dairy industry, but judging from the acquisition of Auscow, the next step may be the old brothers to fight against each other
.

In Song Liang's view, the horizontal integration of the industry across regions will be accelerated in the next step, and the situation of more than 80 regional dairy companies across the country will gradually change
.