Introduction: Zhou Black Duck's profits in recent years have been declining, and the problems involved are multifaceted, mainly from three dimensions, one of which is the strong rise of competitors, such as the delicious duck neck, and even leisure brands such as three squirrels. Second, Zhou Black Duck's own positioning of high-end, benchmarking Starbucks These strategies are actually inappropriate, it is difficult to make a high-end temperament of the marinated food itself, mix-and-match and cross-border will sometimes make it different, and customers who are difficult to be loyal will naturally flow to competitors. Third, the late opening of the zhou black duck direct operation model, the poor performance of franchisees, and excessive investment in brand marketing have directly weakened profitability.
(Text/Zhang Yu Editor/Ma Yuanyuan) Streetsides, stations, airports, and chain stores across the country can be seen everywhere "Zhou Black Duck" (01458. HK) has been facing a decline in performance in recent years.
With the continuous expansion of giants such as Absolute Duck Neck and Huang Shanghuang, as well as the intensification of competition in the same industry such as Liao Ji Stick Chicken, Ziyan Baiwei Chicken, and Halogen Jiangnan, the pace of development of Zhou Black Duck has gradually slowed down, and its performance is also facing a severe test.
On the evening of August 2, Zhou Black Duck issued a profit warning, during the reporting period, the company's net profit is expected to be between 10 million yuan and 20 million yuan, compared with 230 million yuan in 2021, a decrease of about 91.3% to 95.65%.
Profits fell sharply
Zhou Black Duck, whose net profit has fallen sharply, is not optimistic about operating income. According to the announcement, the total revenue of Black Duck in the first half of the year is expected to fall by about 20% year-on-year, while the operating income in the same period of 2021 is 1.453 billion yuan.
For the decline in performance in the first half of the year, Zhou Black Duck admitted that mainly due to the repeated domestic new crown epidemic, the implementation of strict prevention and control measures in many places across the country, the sharp decline in the flow of people led to a significant decrease in the flow of customers in stores, logistics and distribution are also limited, which has a certain impact on the company's sales and profits. At the same time, due to the increase in raw material prices, the pressure on the cost side in the first half of the year increased, as well as the increase in exchange losses, the profit side of the group was greatly affected.
Compared with Zhou Black Duck, the net profit attributable to shareholders of listed companies in the first half of the year is expected to be 90 million yuan to 110 million yuan, down 78.08% to 82.07% year-on-year.
Compared with the competitors' absolutely delicious duck neck, zhou black duck profits have lagged far behind. Under the epidemic situation, the speed of the decline in the net profit of Zhou Black Duck is also far beyond that of its peers.
In fact, the Observer Network noted that in recent years, the performance growth rate of Zhou Black Duck has gradually shown fatigue. Wind data shows that in 2017, the growth rate of Zhou Black Duck's net profit plummeted to 6.43%. In the following three years, the growth rate of net profit quickly widened to negative values, -29.09%, -24.56% and -62.89% respectively. In 2021, Zhou Black Duck achieved a net profit of 342 million yuan, an increase of 126.44% year-on-year.
Lin Yue, an analyst in the catering industry and chief consultant of Lingyan Management Consulting, told the Observer Network that the profits of Zhou Black Duck in recent years have been declining, and the problems involved are multifaceted, mainly from three dimensions, one of which is the strong rise of competitors, such as the neck of the delicious duck, and even the leisure brands such as three squirrels. Second, Zhou Black Duck's own positioning of high-end, benchmarking Starbucks These strategies are actually inappropriate, it is difficult to make a high-end temperament of the marinated food itself, mix-and-match and cross-border will sometimes make it different, and customers who are difficult to be loyal will naturally flow to competitors. Third, the late opening of the zhou black duck direct operation model, the poor performance of franchisees, and excessive investment in brand marketing have directly weakened profitability.
For the first half of the year's operating conditions, the observer network called Zhou Black Duck for consultation, and the customer service staff said that the company currently has no investor relations telephone.
High-end strategic folding?
Public information shows that Zhou Fuyu, the founder of Zhou Black Duck, was born in a poor family in Chongqing, and went to Wuhan to work when he was less than 20 years old, in a brine shop, Zhou Fuyu learned the craft of making food, and then began to start a business.
In 2016, Zhou Fuyu led Zhou Black Duck to the capital market, and the market value was once as high as 20 billion yuan, becoming a veritable "duck neck king".
As one of the "three giants of halogen taste", Zhou Black Duck's strategy is to high-end - breaking the price ceiling of the halogen track and freeing up profit margins through higher gross profit margins.
Wind data shows that from 2019 to 2021, the gross profit margin of Zhou Black Duck's sales was 56.54%, 55.47% and 57.78%, respectively. In contrast, the gross profit margin of sales of Tasteless Food in the past three years was 33.95%, 33.48% and 31.68%, respectively. Huang Shanghuang's gross profit margin of sales was 37.59%, 37.8% and 33% respectively.
In the eyes of industry insiders, the cornerstone of Zhou Black Duck's high-end strategy lies in the uniqueness created by the direct store model. It is reported that in the early stage of Zhou Fuyu, it also attracted many relatives and friends to join, but the quality difficulty of management brought with it led to the decline in the brand evaluation of Zhou Black Duck. In 2006, Zhou Fuyu carried out a drastic reform, buying back all franchise stores at high prices, introducing professional managers, and dissuading relatives who did not meet the needs of the job.
On the other side of the coin, zhou black duck insisted on the direct operation model in the early stage, resulting in slower opening of stores. In contrast, the taste of joining the model has expanded rapidly and increased rapidly.
A research report from Zhongtai Securities pointed out: "As of the end of 2019, there were 10,954 stores with revenue of 5.172 billion yuan; 3,706 Huangshanghuang stores with revenue of 2.117 billion yuan; and 1,301 Zhouhei Duck stores with revenue of 3.186 billion yuan." ”
Since 2019, Zhou Black Duck has gradually opened up franchises on the basis of the direct operation model. In 2020, Zhou Black Duck upgraded the "direct operation + franchise" business model, explored three franchise models of developmental licensing, single-store franchise and employee creation, and greatly reduced the threshold for franchisees, and the funding requirements were reduced from 5 million to 300,000 (single-store franchise). In 2021, the total number of franchised stores opened in Zhou Black Duck reached 1535.
Zhu Danpeng, vice president of the Guangdong Food Safety And Security Promotion Association, told the Observer Network that "with the acceleration of Zhou Black Duck's store opening, its asset-heavy model has gradually become prominent, and the company's overall profit will also be dragged down by the opening of stores."
Observer Network saw in the "franchise application" section of the WeChat public platform of Zhou Black Duck that the current one-time concession fee of Zhou Black Duck is 50,000 yuan, and only 30,000 yuan needs to be paid for the first time, and 20,000 yuan is paid after three years; In addition, a deposit of 50,000 yuan is required, and 40,000 yuan is refunded without default after three months of opening the store, which is equivalent to only 10,000 yuan of security deposit; Decoration and equipment 60,000 to 100,000 yuan; The investment of a main store is about 100,000 to 150,000 yuan (excluding rent).
Specific to the income, Zhou Black Duck distributes benefits in accordance with the actual turnover share, and the concession distribution ratio is unified as: 37% of the actual turnover.
"The whole operation process of Zhou Black Duck is still very conservative and stable, although it has not recovered to before the epidemic, but from the proportion of the entire direct operation and franchise, there are still certain opportunities for its subsequent development." Zhu Danpeng said.
Halogen track "smoke filled"
According to public information, halogen products are processed products made by boiling meat, some aquatic products or vegetables as the main raw materials, adding salt, soy sauce and other seasonings and spices.
According to the industry segmentation, halogen products can be divided into food halogen food, leisure halogen food and new hot halogen. The consumer group of food with meals and brine foods is mainly the group that forms a family, which meets the dietary needs of family members with meal consumption, and the representative brands include Ziyan Baiwei Chicken, Liao Ji Stick Chicken, etc.; The consumers of leisure halogenated foods are mostly young women, and as a leisure snack, they meet the needs of seeking relaxation and self-reward, representing brands such as Zhou Black Duck, Absolute Taste, Huang Shanghuang and so on. The new hot halogen consumer population focuses on the younger Generation Z, focusing on fresh, fresh halogen for sale, store location is mainly in shopping malls and popular business circles, to meet the needs of shopping and consumption, seeking self-pleasure, representative brands are Sheng Xiang Ting, Yan HaloGen Hall, Halogen Aunt and so on.
According to Ai Media Consulting, the market size of China's halogen products industry in 2021 will be about 329.6 billion yuan, an increase of 15.0% year-on-year. At present, the market size of halogen products with meals is slightly larger than that of leisure halogen products, but the growth rate of the leisure halogen products industry is faster.
Guotai Junan research report pointed out that in 2020, China's halogen products market CR3 (the market share occupied by the top three companies in business scale) is 3.66%, and the top three brands are Absolute Taste Food, Ziyan Food and Huangshanghuang, with market shares of 1.93%, 0.98% and 0.75% respectively, indicating that the mainland halogen products market has low industry concentration, the market pattern is scattered, and there is still a large room for new brands to develop in the future.
In this context, in early July, the Pre-disclosure Prospectus of Texas Grilled Chicken is intended to be listed on the Shanghai Main Board. On July 7, Ziyan Food successfully passed the meeting and will soon land on the A-share market.
In addition, in recent years, the new hot halogens that mainly focus on the sale of live halogen have shown explosive growth, and new tracks have gradually been derived. According to enterprise investigation, there are currently more than 2700 registered enterprises operating hot halogen, of which the number of registered enterprises within 3 years of establishment is about 1970, and the number of new enterprises in 2021 will reach 1025. From the perspective of investment and financing, the investment and financing of the new hot halogen track is mainly in the early stage, and in April and June 2021, Sheng Xiangting has completed strategic investment and A round of financing; In July 2021, Hot Halogen Eclipse completed the angel round of financing; In August 2021, Aunt Halo completed the angel round of financing; In September and October 2021, Yan Halogen Completed Angel Round and Series A Financing.
It is not difficult to see that the track of industry competition is becoming increasingly crowded, and Zhou Black Duck, who once had a bright moment, seems to need to make more efforts to consolidate his position in the industry.
"Sometimes, it's not necessarily your peers who kill you, such as prepared dishes and snack foods, which are very direct opponents." Lin Yue said.
This article is an exclusive manuscript of the Observer Network and may not be reproduced without authorization.