Yangyuan Beverage's revenue and net profit in the first three quarters increased in the first three quarters, and the resilience of the six walnuts highlighted the stability and improvement

Recently, Yangyuan Beverage (603156. SH) disclosed its performance report for the third quarter of 2023, and the overall revenue data reached more than double digits, of which the net profit grew faster year-on-year. According to the data, Yangyuan Beverage's revenue in the third quarter was 1.585 billion yuan, a year-on-year increase of 10.41%; net profit attributable to shareholders of the parent company was 378 million yuan, a year-on-year increase of 20.42%.

At a time when the overall economy is recovering, the development resilience shown by the increase in revenue scale and profitability of Yangyuan Beverage has boosted the confidence of the entire plant-based protein beverage industry. Relevant sources said, "As a leading domestic plant-based protein drink, Yangyuan Beverage has consolidated and strengthened the market share of 'six walnuts', and has recovered from the uncertainty of the epidemic in the past few years to rapid revenue growth." We have seen the strength of Yangyuan Beverage to expand its volume and explore the growth curve, and the resilience of the six walnuts of the core product has been highlighted, which has further consolidated and strengthened the dominance of the category, and also continued to inject confidence into the plant-based protein beverage category."

The core products are stable and improving, and the "second curve" is poised to be expected

In the third quarter of 2023, China's final consumption expenditure contributed 54.3% to economic growth, a new high in the past three years. Relying on the characteristics of low sugar, low fat and high fiber, plant-based protein drinks are in line with modern people's pursuit of healthy diet and have gradually become the mainstream demand of the market. According to the "2020-2025 China Plant-based Protein Beverage Industry Market Demand and Investment Planning Analysis Report" released by the Industry Research Institute, it is expected that the market size of plant-based protein drinks will exceed 300 billion yuan in 2025, and China's plant-based protein beverage market is ushering in new development opportunities.

As a pioneer in the plant-based protein beverage market, in 2023, Yangyuan Beverage will deliver satisfactory results from the first quarter performance report to the overall revenue and profitability in the third quarter, and the growth rate of Yangyuan Beverage will meet public expectations. In terms of business development, Yangyuan Beverage's core business, walnut milk, is stable, and the new business will also drive the benign diversification of Yangyuan Beverage's revenue structure.

According to the announcement, in the first three quarters, the cumulative revenue of Yangyuan Beverage reached 4.587 billion yuan, a year-on-year increase of 9.6%; The cumulative net profit attributable to the parent company was 1.289 billion yuan, a year-on-year increase of 27.98%.

Behind the rapid growth of the demand scale month-on-month is the growth competition chip won by the multi-product layout of Yangyuan Beverage. Among them, the blockbuster product "Six Walnuts 2430" for students and white-collar workers; Focus on improving nutritional content and multi-scale packaging of the "six walnut boutique series"; The low-sugar, prebiotic formula "Six Walnuts Health" series launched for the elderly and healthy consumers; There are also a number of new series that focus on the high-end market and integrate sugar-free, high-protein, phospholipid and other elements to adapt to the changes in current consumer demand. In addition, Yangyuan Beverage has launched Yangyuan plant-based milk and has completed the listing infrastructure of the first batch of key markets. In 2022, Yangyuan plant-based milk won the ITI International Top Taste Medal and won the silver medal at the World Food Quality Evaluation Conference, reaching the highest rating of plant-based milk currently on the market.

Industry insiders said that the competition in the plant protein beverage market is becoming increasingly fierce, and the plant milk that is still in the cultivation period is expected to become a new engine for the development of Yangyuan drinks, and the diversified product matrix of six walnut series + 2430 series + plant milk series will provide more opportunities and development momentum for the growth of Yangyuan in the plant protein beverage market.

Channel change and technology innovation in parallel, six walnuts aim at the health market

In recent years, China's beverage market has been changing, and in the plant-based protein beverage track, traditional Haoqiang is still the mainstream of the market. According to the data released by Euromonitor, in 2022, Yangyuan Beverage will account for the largest share of the domestic plant-based protein beverage market share with 5.44%. At the 2023 Six Walnut National Distributor Summit, Yangyuan Beverage proposed the "Mid-Autumn Festival Peak Season Marketing Strategy Deployment" to increase sales in terms of marketing, channels, and products, and also proposed a new marketing model to deal with diversified demand and fragmented channels.

"Yangyuan has five production and processing bases: Hengshui in Hebei, Chuzhou in Anhui, Yingtan in Jiangxi, Luohe in Henan and Jianyang in Sichuan; It has three major golden walnut producing areas in Xinjiang, Yunnan and Taihang Mountain, and selects and purchases more than 100 million kilograms of walnuts every year, which provides a strong guarantee for the long-term stable quality and output of raw materials," said the person in charge of Yangyuan Beverage.

As a leading brand established for 26 years, Yangyuan Beverage's "Six Walnuts" has a mature layout in offline supermarkets, convenience stores and other retail channels. However, under the new consumption habits of the people, Yangyuan Beverage has increased the layout of online e-commerce such as Douyin, Xiaohongshu, community, brand mini programs, KOL celebrity live broadcasts and other emerging channels, comprehensively promoted the full implementation of the characteristic marketing model of "global deep distribution + full-chain C-end operation", and established a three-dimensional sales network covering the whole country.

Adjusting the strategy to meet the demand of the peak season is only an important means for the company's development, and it is more important to pay attention to long-termism and achieve brand evergreen. To this end, Yangyuan Beverage officially put forward the development strategy of "100 years of Yangyuan", and continued to invest in building a super category king. Industry insiders said that based on the walnut brain culture of six walnuts, it awakens consumers' health cognition and health awareness, which will help inject new development momentum into the brand.

In 2023, Yangyuan Beverage will focus on marketing nodes such as "College Entrance Examination Season", "Mid-Autumn Season" and "Spring Festival Season", covering all new media touchpoints with high-value content as the carrier, and continuously improving consumers' trust in the brand. While strengthening the interaction with consumers, we will continue to enhance the brand potential.

In addition, Yangyuan Beverage has increased its investment in scientific research, and continuously improved its technological innovation capabilities and led the standardized development of the industry through continuous cooperation with top R&D institutions, well-known scientific research institutions, and domestic authoritative experts. At present, Six Walnuts and the Red Cross Foundation of China have jointly established the first national brain nutrition research fund in China, and will invest tens of millions of funds to carry out scientific research in three directions: brain nutrition, adolescent brain development, and brain diseases. The first batch of scientific research projects have been carried out by the Beijing Brain Science and Brain-like Research Center, Soochow University, and Beijing Technology and Business University.

The person in charge of Yangyuan Beverage said that in 2023, it will continue to focus on the principle of "stabilizing stock and creating increments", focus on work goals, pay close attention to implementation, and make breakthroughs. In the future, with the in-depth promotion of product layout and the further expansion of market demand, Yangyuan Beverage will usher in more growth opportunities and market space.