The price is reduced by up to 45%, and the stock price of BESTORE should be up and down!
The casual snack track is still "rolled" to the price!
Yesterday, BESTORE (603719. SH) announced a significant price reduction, with an average price reduction of 22% for more than 300 products on sale in stores, with a maximum reduction of up to 45%. It is reported that this is the largest price reduction in the company's 17 years since its establishment, and there is no one.
On December 1, BESTORE's share price jumped high, with a limit of 10%, and the company's move was obviously to "exchange price for volume", in order to cope with the involution of the current leisure snack track and seek a way to break the situation.
At present, the company closed at 21.32 yuan per share, with a market value of 8.549 billion yuan. It is worth noting that since the second half of 2020, BESTORE has begun to weaken, with a cumulative decline of more than 70% so far. Of course, the three squirrels next door (300783. SZ) fell similarly, falling less than a squirrel, and the two companies can be described as brothers.
Significant price reductions to save the "urgent need" of declining performance
BESTORE's price reduction is so large that it quickly became the "front page headline" of the leisure snack industry. The author's first reaction when he saw this news was, with so much price reduction, can the company still make money, which is too "bloody".
The third quarter report of BESTORE this year shows that the company's gross profit margin is 28.54%, and the net profit margin is only 3.18%, which can be described as a meager profit.
However, the company does not seem to be worried, saying that it has negotiated with upstream suppliers to squeeze the profit margins within the supply chain as a whole, and the increase in scale effect through price reductions may offset the negative impact of price reductions and help the company occupy more market share.
Having said that, the "painful period" of BESTORE's reform should be inevitable. The promoter of the price reduction is the company's new chairman and general manager Yang Yinfen, who has just taken office for three days, which can be described as the new official taking office three fires, the company offered a series of actions such as "changing the commander" and "price reduction", which is obviously not a coincidence, in the words of Mr. Yang himself, the company is facing the "problem of not being able to live".
According to the financial report, from 2020 to 2022, the total revenue of BESTORE increased from 7.894 billion yuan to 9.440 billion yuan, while the net profit attributable to the parent company decreased from 344 million yuan to 335 million yuan in the same period, which was significantly slower than the growth rate of 20% to 30% in previous years.
In the first three quarters of this year, BESTORE achieved revenue of 5.999 billion yuan, down 14.33% year-on-year, and net profit attributable to the parent company of 191 million yuan, down 33.43% year-on-year. Looking at the third quarter alone, the company's net profit attributable to the parent company was only 1.9984 million yuan, a year-on-year decline of 97.88%.
At the end of the three-year epidemic, the performance has not increased but declined, and the company's products seem to be unable to sell. The company has always regarded itself as the "No. 1 stock of high-end snacks", and its customer unit price is also higher than that of competitors in the same industry.
Some netizens found that the price of 1 kg of A240 purple cashew nuts is 37.9 yuan, the price of three squirrels is only 21.8 yuan, the price of 110 grams of boneless duck palms is 20.9 yuan, and the price of 125 grams of boneless duck palms is only 16.9 yuan. Although the company said that the high price was due to the good raw materials, it was still questioned by netizens as a "snack assassin".
Under the current macro background, Ma Yun once mentioned that we should pay attention to the "Tao system" ecology, Hema and Sam started a price war, and on the consumer side, "ice cream assassins" and "yogurt bandits" are also being abandoned by consumers, and careful planning has become the mainstream.
BESTORE's price reduction can be seen as a continuation of the above plot. Some analysts believe that in the current economic environment, adhering to the positioning of high-end snacks may lose market share, and leisure snacks are in the stage of stock game, and the competition is extremely fierce.
The e-commerce dividend has peaked, and the channel reform is imminent
Unlike Internet brands such as Three Squirrels and Baicaowei, BESTORE's channels are more balanced, and the online and offline channels are equally divided.
According to the data, the online e-commerce business revenue of BESTORE in the third quarter was 852 million yuan, a year-on-year decrease of 19.42%, and the gross profit margin decreased by 3.91 percentage points year-on-year. The dividend of the e-commerce channel has peaked, and the increase in customer acquisition costs may lead to a decline in gross profit margin.
In terms of the offline market, the rapid rise of snack mass sales, such as "catfish", has an impact on traditional snack sales channels that cannot be underestimated.
Snack mass sales is actually to gather all kinds of snacks together and achieve the purpose of increasing sales through more flexible and inexpensive sales methods. According to a brokerage research report, the unit price of BESTORE and Laiyifen is 56 yuan and 61 yuan respectively, and the unit price of snack stores is 38 yuan.
The data shows that since 2022, the mass sales snack track has accelerated the opening of stores, and the total number of stores in the country has increased from about 250 in 2021 to nearly 8,000 in 2022, and is expected to reach 22,000 to 25,000 in 2023, and the total sales scale is expected to reach 70 billion yuan to 80 billion yuan.
The company has taken the initiative to make channel changes to capture the tastes of young people. BESTORE once invested in Zhao Yiming's snacks, and later chose to clear the warehouse and cash out, making a net profit of 60 million yuan. However, the company said that it will continue to focus on cultivating the mass-selling snack brand "Snack Stubborn", which is a new brand launched by BESTORE to expand its mass-selling snack business.
Conclusion——
At present, the leisure snack industry has entered a very involution cycle. Whether BESTORE's price reduction will induce a new round of "price war", whether the company wants to take the "people-friendly" route, whether there is a conflict with its past strategy, and what impact it will have on performance in the future, is still unclear for the time being, and still needs to be further tracked.
Author: Flying Fish