Author：Liyuanchun Food Date：2016-02-24
In the occasion of the 20th anniversary of the listing, Master Kong launched its first ever profit warning, as of the year 2015 December 31, 2015, the shareholders profits Master unaudited sharply from about 35-40 percent, weaker than expected figures. A profit warning, Tingyi stock prices fell sharply, the decline was more than 9 percent, hitting a seven-year low.
Net profit fell four percent
"The results do not keep up with industry innovations and upgrades"
2015 full year net profit fell about 35-40%, which also means the Master in the fourth quarter net loss of 82 million to 102 million US dollars, this amount greatly exceeded market expectations. For the 2015 financial results appear backwards because the Master gives three points: instant noodles product upgrade price, the short period since the passage sidelines caused sales to fall; beverage business based on the principle of financial conservatism, and actively set aside for impairment; exchange rate fluctuations.
In the industry view, the performance of Master recession deeper reason is that for a long time deviation of market positioning, not kept pace with industry innovations and the results of the upgrade. "Master and Wahaha have committed the same mistake, in three or four lines entangled, facing a large number of small brands intercept, price sensitivity, loyalty is not high." Food business researcher Zhu Dan Peng noted that China, away from a second-tier cities such Master the high-margin products and high value-added products to promote new difficulties, coupled with the aging brand, Master Kong's performance decline is not surprising.
More from the challenges encountered in instant noodles, instant noodles Master Kong Group has contributed 80% of profits in good years age, instant noodles plate to help spearhead Master, invincible, but in the instant noodles market as a whole continued to decline on the occasion , instant noodles plate became short board.
Investment bank collective bad-mouthing
"Instant noodles market has reached its peak and even started to decline."
Exceeding market expectations of a profit warning, Tingyi shares fell. After yesterday's open, Master shares fell nearly 10%, the highest in nearly seven years intraday low stock price. At the close, Master Kong shares fell 6.88 percent to HK $ 8.00.
Collective investment bank was added to the bad-mouthing Master's camp. BOCOM International released a report yesterday, the Master rating from "neutral" from "sell," target price from HK $ 12.2 slashed 49% to HK $ 6.2. Bank of International believes that the lack of product innovation performance in recent years is leading to Master unexciting root causes. "Master in improving the business side need to be more aggressive on the Nisshin more competitive raw material quality, and innovation in beverage bottles, locking the young customer base."
HSBC pointed out that the market is still too optimistic about the prospects for this year, Master Kong, HSBC's profit forecasts for the next two years than the Master Kong interbank market low of 11-16%, "in the short term do not see any positive catalysts Master."
"Companies lack of product innovation, compared to the same industry also lacks sophisticated brand strategy, under the long-term transformation of the mainland consumers, the company will face greater disadvantage." Citi Master Kong instant noodles while business sales regression analysis made reasons, company for the sake of market share at the expense of profit margins and increase the practice is wrong, "distributors reduced profits are more likely to affect the company's continued growth."
"With the rapid growth of Chinese economy and rapid expansion, but as the economy develops to a certain stage lead to consumer demand increases, consumer spending demand instant noodles for a healthy diet especially the impact of a fundamental change, so the instant noodle market will to a peak even started to decline, "chanson capital Shen Meng Executive Director pointed out that as the Master Kong instant noodles market leader, in fact, encountered the same problem with the Coca-Cola, the market decline but new product development is slow," So either the money in opening up new markets or be larger food companies incorporated if Tingyi continue the existing product mix and business model development, more and more bleak outlook. "
The level of polarization trend
"Before all the instant noodles at a price not work."
Instant noodles market overall decline continues, according to AC Nielsen market share data analysis shows that in 2014 China's instant noodle market, sales fell 7%, continuing a downward trend for four consecutive years of instant noodles, instant noodle market in 2015 overall decline continues .
The slowdown of the instant noodles market giants stopped for years "price war", less and less to buy a barrel surface to send ham promotions. In addition, the introduction of more than 5 yuan high-end instant noodles instant noodles companies all became "self magic", the first half of 2015, unified by virtue of the leather surface, soup Daren these two high-end instant noodles instant noodles to achieve complete business segment to profitability. "Instant noodles market as a whole continues to shrink, but the high price of instant noodles more than 5 yuan has continuously maintained rapid growth, showing consumer demand is in transition." Uni-President China Holdings Ltd. semi-annual report noted that its high-end brand instant noodle soup Daren Following the 2014 earnings after the exponential growth in the first half of 2015, Tang still maintain high triple-digit growth.
In the instant noodles insight into aspects of consumer trends, Master apparently belated than the competition, Master Kong instant noodles subsequently entered the field of high-end, high-end instant noodles introduced a number of categories, such as love fresh meal, Jane expected to wait, and to increase in the intensity of marketing activities, but the face of high-end convenience Tingyi performance boost effect if there remains to be seen.
Master Kong experience shows, high-end is not a panacea, only through closer to the end, to avoid price war is unlikely to be effective to improve performance. Insiders said that the concept of instant noodles unhealthy food has been ingrained with the improvement of public health awareness, the demand for instant noodles weakening. Also the popularity of high-speed rail also squeezed instant noodles market space, "instant noodles in the past, travel, tourism in the food more, and shorten the journey time is now also reduces dependence on consumer spending instant noodles", Chinese food business researcher Zhu Dan Peng noted that the shrinking overall instant noodle market is inevitable, the future of instant noodles market will show high and low polarization trends, product pyramid structure has become increasingly evident, "in the past all enterprises instant noodles in a price, there is no spire product."