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The latest financial report shows that Youyou Food Co., Ltd. ("Youyou Food"), the "first chicken feet stock", will see an increase in revenue but no increase in profit in the first half of 2024. Five years after its listing, Youyou Food has not yet gotten rid of its dependence on pickled pepper chicken feet and the southwest market, and has frequently purchased financial products.

After years of launching new products without making any splash, the gross profit margin of the main products has declined, and the construction of marketing projects has been delayed again and again. How far can Youyou Food go with its pickled chicken feet?

Revenue depends on pickled pepper chicken feet

In the first half of 2024, Youyou Food's revenue was 530 million yuan, a year-on-year increase of 10.26%; net profit was 76.1357 million yuan, a year-on-year decrease of 5.22%. 75.61% of the revenue depends on the single product pickled pepper chicken feet, while other products such as pork skin crystals, bamboo shoots, and chicken wings performed generally. Youyou Food pointed out in its semi-annual report that pickled pepper chicken feet have a significant impact on the company's profitability. From the perspective of long-term development, this relatively single product structure exposes the company to certain operating risks.

As early as when it went public in 2019, Youyou Foods was aware of the problem of a single product structure. The prospectus shows that from 2016 to 2018, the revenue share of Youyou Foods' pickled pepper chicken feet reached 76.27%, 79.45%, and 81.63%, respectively. Now, five years later, pickled pepper chicken feet still account for more than 75% of Youyou Foods' annual revenue.

Shen Meng, director of Xiangsong Capital, believes that if a company relies too much on a single product and the differentiated advantages of that product become less obvious, it will lead to rising costs and lower returns, ultimately resulting in increased revenue but no increased profits.