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meiji landou is facing severe growth pressure.

the company's recently disclosed financial report shows that in the first half of 2024, meiji landou's revenue was 1.92 billion yuan, a year-on-year decrease of 6.9%; its net profit attributable to the parent company was 80 million yuan, a year-on-year increase of 168.8%. among them, in the second quarter, the company's revenue was 970 million yuan, a year-on-year decrease of 6.7%; its net profit attributable to the parent company was 40 million yuan, a year-on-year increase of 712.9%.

in 2023, meiji landou's revenue was 4.049 billion yuan, a year-on-year decrease of 16.16%; its net profit attributable to shareholders was 63 million yuan, a year-on-year decrease of 53.90%.

the reason behind this is that the entire cheese market is shrinking.

nielsen iq data shows that in the first half of 2024, national cheese sales fell 25% year-on-year, and sales volume fell 22% year-on-year.

image source: ic photo

price war intensifies

at present, the price war in the cheese market is intensifying.

nielsen iq data shows that in the first half of the year, the national average price of cheese per kilogram dropped from 148.9 yuan to 144.4 yuan, a year-on-year decrease of 3%; the average price per piece dropped from 13.7 yuan to 12 yuan, a year-on-year decrease of 12.6%.

this is consistent with the survey conducted by the 21st century business herald reporter. in channels such as beijing qixian supermarket and wumart supermarket, the price war for cheese products is very fierce. on the cheese shelves, seven products of meike lando occupy half of the market. on the refrigerated shelves where cheese slices are placed, half are meike lando original cheese slices and high-calcium cheese slices, and half are yili reduced-fat cheese slices and thick cheese slices. yili's product labels have the eye-catching promotional words "buy one get one free". in terms of protein content, the protein content of meike lando original cheese slices is 14.6g (per 100g), and the protein content of yili thick cheese slices is 11.2g (per 100g).

according to the salesperson, among the four cheese slices (processed cheese), the 9.9 yuan high calcium cheese slices from mikoland are the best sellers. in the mozzarella cheese (original cheese) category, there is only one product, mikoland mozzarella cheese; in the cheese stick (processed cheese) category, there are three different flavors of mikoland cheese sticks and one yili sandwich cheese stick. the yili sandwich cheese sticks are placed at the top of the shelf, while mikoland products are placed at the bottom and middle of the shelf. the salesperson also introduced that the best-selling cheese stick is the mikoland original cheese stick, which now also has a buy one get one free promotion.

behind the price war is oversupply.

a cheese manager at a leading dairy company told the 21st century business herald that with the localization of production equipment, the barriers to processed cheese have been broken. "now there are basically no barriers, and there is a serious oversupply, so we can only fight a price war," he said.

the impact of this situation on meiji landou is a decline in revenue.

by product, in the first half of this year, meiji landou cheese/liquid milk/trading revenue was 1.631 billion/149 million/139 million yuan, down 0.85%/down 8.68%/down 44.86% year-on-year.

specifically for the cheese sector, the revenue of the instant nutrition series/family table series/catering industry series in the first half of the year was 1.008 billion/172 million/450 million yuan, down 6.17%/down 1.23%/up 13.77% year-on-year.

from the perspective of channels, meiji landou is shrinking relatively.

as of the first half of the year, the company had a total of 4,790 dealers, 17 fewer than at the end of the first quarter; the number of outlets covered was approximately 800,000.

profits rebound

looking back, with the weak c-end market, meiji landou increased its investment in the b-end.

however, the gross profit margin of this business is not high. the financial report shows that in the first half of the year, the gross profit margin of the instant nutrition series of meiji landou was 49.72%, the gross profit margin of the family table series was 27.53%, and the gross profit margin of the catering industry series was only 20.80%.

however, the overall gross profit margin of meiji landou is still increasing year-on-year.

in the first half of this year/second quarter, the company's gross profit margin was 34.57%/36.01%, up 1.56/2.7pcts year-on-year. among them, the gross profit margin of cheese/trading/liquid milk products decreased by 1.18/increased by 4.43/increased by 1.39pcts (percentage points) year-on-year.

the reason behind this is structural adjustment. affected by the decline in raw material procurement costs, the gross profit margin of meiji landou's trading business has improved significantly year-on-year; the proportion of revenue from the high-gross-profit cheese business has increased, driving the improvement of the overall gross profit margin.

during the same period, meiji landou was also reducing costs.

in the first half of this year/second quarter, the company's sales expense ratio was 22.7%/23%, respectively, down 2.94/4.02 pcts year-on-year, mainly due to the year-on-year decrease in advertising and promotion expenses and warehousing fees.

in the first half and second quarter of this year, meiji landou's management expense ratio was 5.56% and 5.73% respectively, down 0.15 and up 0.03pcts year-on-year, remaining relatively stable.

overall, in the first half of this year/second quarter, meiji landou's net sales margin reached 3.99%/3.65%, an increase of 1.82/2.63pcts year-on-year.

meiji landou has plans for the future.

in july, the company's founder and president chai xiu stated at the 5th china cheese industry development seminar that there are three directions for the expansion of china's cheese market space: first, to build a new development pattern in which "drinking milk" and "eating milk" are in parallel; second, to create a new consumption scenario in which staple food, complementary food and snack food are in parallel; third, to create a new channel feature in which to c and to b are in parallel.

at the same event, wu liyuan, general manager of the meike landou brand center, said that the entire cheese industry should achieve "differentiated management" and that category champions could emerge based on each popular cheese product. at the same time, in the construction of the supply chain system, international and domestic complementarity is needed, efficiency should be sought from upstream, costs should be reduced, and the independent strength of enterprises should be enhanced.

choose cash out

but less than a month later, chai xiu chose to reduce her holdings in meiji landou, after several senior executives also cashed out.

on august 23, meiji landou released an announcement on the plan of reducing holdings by shareholders, directors and senior management holding more than 5% of the shares. chai xiu, the company's shareholder, vice chairman and general manager, and his concerted party dongxiu commerce hold a total of 15.89% of meiji landou's shares. due to its own financial needs, chai xiu intends to reduce the company's shares by no more than 19.0259 million shares (no more than 3.72% of the company's current total shares) through centralized bidding and block trading within 3 months after 15 trading days from the date of disclosure of the announcement (no reduction during the window period). among them, the shares acquired through centralized bidding transactions shall not exceed 3.6643 million shares, which shall not exceed 0.72% of the company's current total shares. the reduction price shall be determined according to the market price.

if calculated based on the closing price of 11.91 yuan per share of meiji landou on august 28, chai xiu's cash out from the share reduction was approximately 227 million yuan.

at present, chai xiu is no longer the actual controller of meiji landou.

the predecessor of meiji landou was guangze shares. in 2015, the company acquired meiji landou (tianjin) food technology co., ltd. and entered the cheese food business. later, it gradually shifted its main business to cheese and launched children's cheese stick products, becoming the "first cheese stock" in people's mouths. in 2019, guangze shares was renamed meiji landou.

at the beginning of 2020, mengniu launched the acquisition of meiji landou. in january 2020, mengniu spent 287 million yuan for the first time and acquired 5% of meiji landou's equity at a price of 14 yuan per share. since then, mengniu has increased its capital in meiji landou through various means such as private placement and the centralized bidding trading system of the shanghai stock exchange, and the "price" paid for it has become higher and higher. for example, in december 2020, mengniu invested 3 billion yuan to subscribe for meiji landou shares. the non-public offering price of this transaction was 29.71 yuan per share; in october 2022, when mengniu increased its holdings, the price had risen to 30.92 yuan per share.

after various operations, as of the first half of 2024, mengniu became the largest shareholder of yili with a shareholding ratio of 36.63%, and chai xiu became the second largest shareholder.

as mengniu continued to buy, yili's stock price also rose, reaching 84.5 yuan per share in may 2021, with a market value of more than 40 billion yuan.

however, as the market changes, the total market value of meiji landou has dropped to around 6 billion yuan.

"i am also very sad. the stock price fell from 84 yuan to 13 yuan, and billions of assets were lost." chai xiu said at the mulan annual conference of chinese business in april.

and she may have many considerations behind her decision to withdraw at this moment.