Today, we understand the basic situation of the company's business through the annual report.
The first is the development status of the industry, which corresponds to the third section of the annual report, management discussion and analysis.
Through the management discussion and analysis in the third section of the annual report, the industry situation of the company during the reporting period in the second subsection of the annual report, we can understand the industry classification, market demand, future development space and other information of the case stocks.
The scale of China's plant-based protein beverage market continues to expand, and the overall growth trend is positive. Combined with the penetration rate of plant-based protein beverages in the beverage industry, it is predicted that the market size of plant-based protein beverages in China will exceed 140 billion yuan by 2026. The market size will be huge.
The market size of the industry is the ultimate ceiling of the company's operating income, as long as the operating income of the case company is still far from 140 billion, then there is room for sustainable growth in the future. Of course, there is room for growth does not mean that it will grow, and it depends on the operation of the specific company.
The market size is not static, the market size may become larger or smaller in the future, which mainly depends on the life cycle stage of the industry, that is, it depends on whether the industry is in the growth period, maturity period or recession period, and it is impossible for individual companies in the industry to reverse the situation of the industry, and can only follow the trend.
Let's take a look at the company's main business, main products, business model and operation strategy. Section 3 of the corresponding annual report Part 3 of the Management Discussion and Analysis --- the business of the company during the reporting period
Through this short introduction to the company's main business, we can get very important information. The company's main business is the research and development, production and sales of vegetable protein beverages mainly based on walnut kernels, and the company's main business has not undergone major changes during the reporting period.
Let's look at the business model. Through the part of "company business model", we can understand the procurement model, production model and sales model of the case company. Producing products and selling them is extremely important for any company.
First of all, you need to procure raw materials. The procurement cost determines the operating cost of the enterprise, which affects the level of gross profit margin. The procurement of the case company is guided by ensuring food safety, and has formulated a supplier selection, assessment, management and elimination system.
Through professional and centralized procurement, on the one hand, the quality of raw materials is guaranteed, and on the other hand, the procurement cost is reduced.
After purchasing raw materials, production and processing are required. In the case company, the production includes both self-production and contract processing, and the self-production model is "sales to production", and the production volume is determined according to the sales volume, which can prevent excessive inventory backlog, and it can be inferred that the inventory turnover rate may be good. From this, we can infer that the case company has a small inventory, a small inventory amount, and a high inventory turnover rate.
Looking at the financial statements through Oriental Finance can verify that the inventory is about the same every year, which is relatively well controlled. The inventory turnover rate has also been relatively stable in the past three years, and has basically returned to the pre-COVID level in the last two years, except for the unsalable due to the new crown in 2020.
The mode of commissioned processing is dematerialization, that is, the company provides all the raw and auxiliary materials and packaging, which are processed into finished products by the entrusted processing plant. We just talked about the problem of procurement, the case company has a large amount of raw materials, low cost, food safety control, the same raw materials, but also to ensure the unity of product taste, protect the brand reputation.
Once the product is produced, it needs to be sold. In the case company, the distributor-based sales model was adopted, and the sales were made directly to the dealers through outright. Now most of the industry is oversupplied, dealers can choose to sell whose goods do not sell whose goods, in general, the position of dealers is relatively strong.
In order to reduce the risk of unsalable, dealers like to adopt the method of "goods before payment", that is, dealers take the goods away to sell first, and then pay after selling. However, the case company can make the dealer pay the money before giving the goods, from which we can infer that its product recognition and brand recognition are relatively good, and the goods are not worried about selling, and it has a strong voice in the dealers.
Reflected in the financial statements is the pre-receivable payable - prepayment receivable >0, we can open the financial statement to verify it.
By reading the company's business model, we know that the case company strictly selects suppliers, strictly controls food safety, and reduces procurement costs when purchasing; when producing, there are self-produced and commissioned processing in order to meet the expanding market demand; when selling, there are distribution and direct sales, and the sales network is spread out as much as possible.
Section 3 of the Annual Report There is a lot more to read in the MDA, which we will continue next time.