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Interface News Reporter | Ma Yue

Interface News Editor | Ya Hanxiang

8On January 13, Nanqiao Food released its 2024 semi-annual report showing that its revenue reached 1.566 billion yuan, a slight increase of 0.26% year-on-year; its net profit was 128 million yuan, up 37.58% year-on-year.

At the same time, Nanqiao Food's profitability has also improved. During the reporting period, the company's gross profit margin was 26.22%, a year-on-year increase of 19.96%; the net profit margin was 8.21%, a year-on-year increase of 37.19%.

Nanqiao Food is the "invisible boss" in the baking industry. The company's main products include baking oils, whipping cream, dairy products, pre-made baked goods, fillings, etc. Based on the prosperity of downstream catering and baking industries, Nanqiao Food was listed on the Shanghai Stock Exchange in 2021. According to information disclosed in previous prospectuses and roadshows, its major customers include Nayuki's Tea, Dali, Holiland, Taoli Bread, Weiduomei, 85°C, etc.

As for the reasons for the profit changes in the first half of this year, Nanqiao Food explained that the prices of major raw materials decreased during the reporting period, and the company adjusted product prices accordingly, consolidating its market competitiveness and market share. Thanks to the reduction in costs, the company's profit elasticity has also been greatly released.

Since it started out as a fat business, baking fats and oils are still the business that contributes the most revenue to the company. In the first half of the year, the revenue of baking fats and oils business reached 756 million yuan, whipping cream was 265 million yuan, dairy products were 355 million yuan, pre-made baked goods were 176 million yuan, and fillings were 90 million yuan.

However, its "new trend" business that has attracted much attention is still pre-prepared baked goods.

According to a report by the China Industry Research Institute, the penetration rate of frozen baking in China still has a high room for improvement compared with other countries. The penetration rate of frozen baking in North America has reached 70%, in Japan it has reached nearly 30%, while in China it is only 5%.

The trend of achieving "fresh and ready-made" through frozen semi-finished products has also put upstream suppliers on the cusp of the trend - Ligo Food and Nanqiao Food were successfully listed in 2021. In the current frozen baking competition landscape, Ligo Food has the highest market share. Other companies in the first echelon include Enxicun, Xinwanlai, Xindi Jiahe, Gaobei, Qianwei Yangchu, Black Rose, Laplio, Nanqiao Food and other companies.

Nanqiao Food's pre-made baked goods have two categories - raw frozen dough products and cooked pre-baked products. Among them, frozen dough is more suitable for bakeries and supermarket baking areas that have the conditions for fermentation and baking. The company creates differentiated and high-competition threshold products for these channels, such as oil-coated and stuffed frozen dough; and pre-baked products are more convenient to use, only need a simple second baking, and some categories can even be thawed and ready to eat. The current market demand is higher. The company develops corresponding pre-baked products for channels such as coffee shops and tea drinks that have higher requirements for convenience, and extends the original star products in series such as flavors and sizes.

Judging from the performance in 2023, the prefabricated baking business also contributed the highest revenue growth rate to Nanqiao Food, reaching 68.95%. The annual production and sales volume both increased by more than 100% year-on-year, making it the category with the largest changes.

"The company's pre-made bakery customers currently account for the largest proportion of supermarket channels, and there is a large room for growth in the catering, tea, coffee and bakery chain channels."Earlier in March this year, at the performance exchange meeting for 2023, the company's general manager Lin Changyu mentioned this.

To this end, Nanqiao Foods is also increasing its investment in pre-made baked products.

It was mentioned in the above-mentioned performance exchange meeting that Nanqiao Food added several pre-baking production lines in 2023, with a total production capacity of 18,100 tons of pre-prepared baked products, and 9,600 tons of production capacity is under construction.

2024According to the semi-annual report, Nanqiao Food's first fully automated production line for pre-baked products will be officially put into production in Shanghai Nanqiao in the second half of this year. After it is put into production, it will greatly improve production efficiency, reduce costs and increase efficiency, and improve product profitability. At the same time, the planning of the frozen dough and pre-baked automated production lines of Guangzhou Nanqiao has been completed and is under active construction.