On the evening of April 25, the "fresh" forces of the domestic dairy industry released the 2023 performance report on behalf of the brand New Dairy. According to the report, in 2023, New Dairy will achieve operating income of 10.987 billion yuan, a year-on-year increase of 9.8%, net profit attributable to the parent company of 431 million yuan, a year-on-year increase of 19.3%, non-net profit attributable to the parent company of 465 million yuan, a year-on-year increase of 57.9%, and a net sales profit margin of 4.0%, a year-on-year increase of 0.37 percentage points. In 2023, the company's net cash flow from operating activities was RMB1.557 billion, up 50.6% year-on-year, and the weighted average return on equity was 16.76%, up 2.71 percentage points year-on-year. At the same time, in order to better reward investors, the company has significantly increased the dividend ratio this year, and the dividend amount per share has increased by 76.47% year-on-year. In the first quarter of 2024, the company achieved revenue of 2.614 billion yuan, a year-on-year increase of 3.66%, net profit attributable to the parent company of 90 million yuan, a year-on-year increase of 46.93%, and a year-on-year increase of 1.01 percentage points in net profit margin.
The data shows that in 2023, the dairy industry will face the pressure of insufficient demand and weak consumption, and the overall sales of liquid milk will decline slightly. New Dairy accurately grasps the situation of the coexistence of high-end and cost-effective in the market, adheres to the continuous deepening of the "Fresh Cube" strategy, builds a solid value barrier by strengthening the core business, increasing scientific and technological innovation and distributed operation, and drives with new quality power to achieve strong growth beyond the industry market, and promotes the comprehensive implementation of sustainable development planning and social responsibility system.
Enhance core business capabilities and steadily increase endogenous profitability
In the context of the long-term improvement and cyclical adjustment of the dairy industry, the fresh milk business with "freshness" as the core has become one of the dairy segments with significant anti-cyclical and fastest growth in recent years due to its strong competitive barriers and high entry requirements. In May last year, New Dairy released a strategic plan, putting forward the strategic goal of "making the core business bigger and stronger, enhancing the value of the enterprise, and doubling the net profit margin in five years", and established the strategic realization path of strengthening low temperature, value leading, science and technology support, experience-oriented, endogenous-based, supplemented by mergers and acquisitions, distributed operation, and regional deep cultivation.
Under the guidance of the strategic plan, New Dairy has concentrated its efforts to strengthen the market positioning with "freshness" as the core, enhanced the operation capability of extreme freshness, and clearly proposed to take "24-hour" fresh milk consumption and DTC channels as the two major realization paths to strengthen the core business of "freshness", so as to create the first scenario engine to drive the high-quality growth of New Dairy. Judging from the annual report, New Dairy has achieved the expected results on these two paths. In 2023, the company's fresh milk increased by double digits year-on-year, the overall revenue of DTC business increased by more than 15% year-on-year, and the revenue of new products accounted for 12%, and the market positioning with "fresh" as the core continued to strengthen.
In FY2023, New Dairy will focus on low-temperature fresh milk and low-temperature specialty yogurt, and launch a number of new products to further upgrade the low-temperature category, becoming an important engine for growth. Among them, "24-hour fresh organic milk" refreshes the definition of "fresh organic" with "true freshness, true activity, and true traceability", as the country's first organic fresh milk product that is only sold on the same day, and the "24-hour" high-end series products have a year-on-year growth rate of nearly 40%; the main fresh "Today's Fresh Milk Shop" has launched a high-calcium upgraded version, and the "thick" milk has doubled year-on-year; the low-temperature yogurt "Huorun Crystal Ball" product has completed a 1000+ times iterative upgrade; and the special product bubble yogurt "Leqi" has two new flavors: peach and cola.
On the channel side, New Dairy has intensively cultivated local resources, improved its operating capabilities, and driven the continuous expansion of its "fresh territory", with significant growth in the scale and management level of DTC business. In 2023, the overall revenue of New Dairy's DTC business will increase by more than 15% year-on-year, of which the far-field e-commerce business will increase by more than 40% year-on-year, and the self-subscription business will increase by more than 15% year-on-year. The sales volume of "Fresh GO" exceeded 270 million, and the number of global digital users exceeded 19 million, a year-on-year increase of nearly 50%.
Under the continuous promotion of the urban agglomeration strategy, New Dairy has strengthened the construction of three-dimensional channels, actively expanded core channels such as snacks, fresh food, and supermarkets in key areas around the base market, accelerated the penetration of surrounding foreign markets, and further increased its market share. Focusing on fresh products with one hand and three-dimensional channels with the other, New Dairy focused on its core business capabilities, further enhanced its endogenous momentum, and significantly increased its net sales margin in 2023.
Science and technology innovation blesses user experience, and the sharpness of brand potential energy has been steadily improved
In order to continue to implement the strategy of "science and technology support, experience first", in fiscal year 2023, New Dairy will invest in hard-core technology fields such as biotechnology and digital technology around the "Fresh Cube Strategy", and on this basis, it has realized continuous innovation achievements in products, services, marketing and other paths, achieved leadership in precision nutrition and high-quality milk processing, and built a scientific and technological moat for consolidating the company's core business. According to the data, in 2023, the revenue of new products of New Dairy will account for 12%, and the proportion will remain in double digits for three consecutive years.
During the reporting period, New Dairy established a "molecular power" biotechnology company, focusing on the research and transformation of achievements in the direction of biotechnology such as probiotics and enzyme engineering, with more than 1,500 strains in the platform strain bank, and has realized the industrialization of its own starter culture and probiotics, taking a solid step in the domestic substitution of strain "chips". In 2023, New Dairy will obtain a total of 40 patents, including 15 invention patents, and continue to invest in key technologies such as biological fermentation, enzyme engineering, precision nutrition, high-quality milk processing, and major scientific and technological issues in food safety, providing a solid foundation for New Dairy to consolidate its core competitiveness.
Based on the transformation of scientific and technological achievements, New Dairy has achieved outstanding performance in a number of new products during the reporting period. In the field of low-temperature flavored milk, New Dairy leads the fast consumption outlet, quickly iterates and replicates new and nationwide, and newly launches mung bean shuang, beibei pumpkin and five black nutritional milk according to seasonal flavors, and becomes a new engine for growth through low-temperature flavored milk trendy products;
In the field of specialty milk, which has attracted much attention in recent years, New Dairy has built four series of characteristic milk sources: "Galaxy Ranch, Forest Ranch, Cloud Ranch and Water Ranch", which achieved a year-on-year increase of more than 70% during the year. Among them, the products of Saishang Ranch have been upgraded based on the geographical environment advantages of "Wuzhong - China's Selenium Capital", highlighting the nutritional attributes of "native selenium", doubling year-on-year; "Helan Mountain Juepin" will be fully renovated in 2023, and with its unique resource advantages, differentiated product positioning and outstanding market performance, it has won industry awards such as "2023 China Food Industry Annual Limited Helan Mountain Milk Category Coordinates"; Hongya Ranch has upgraded its characteristic brand, highlighting the "forest system" + "local" natural experience, and its sales volume has doubled year-on-year.
While enriching the supply of products, New Dairy is also constantly strengthening the dissemination of fresh value, and as a representative brand of fresh forces, it continues to make the "fresh" track longer and wider. During the reporting period, under the theme of "New Life, Fresh Departure", New Dairy successfully held the "9th Milk Fan Festival" and the "4th Fresh Milk Festival" in 7 cities across the country, enhancing the brand potential and sharpness through user-centered global new marketing. In terms of brand rejuvenation marketing, while actively co-branding major IPs, New Dairy strives to build a private domain traffic pool, incubates hundreds of internal high-quality KOCs and KOLs, and through in-depth integration with IMC, precise operation, and focuses on core products, a total of 25,000 pieces of content have been released annually, with a total of more than 70 million total readers.
Digitalization improves quality and efficiency to build a green and sustainable dairy industry
In 2023, the digital construction of the lighthouse project group promoted by New Dairy will continue to deepen, and the initial investment will begin to feed back the entire industrial chain from marketing to production, from factory to pasture, especially the digitalization of the supply chain based on digital factory, PMC lean management and optimization, and milk source digitalization, which has significantly improved the company's operational efficiency.
For the breeding sector, New Dairy has strengthened refined management through digital means, continuously promoted the progress of breeding technology, focused on improving operation efficiency, and established a demonstration farm for key technologies for green quality and efficiency improvement of dairy cows. After the launch of the new dairy digital factory, it further met the needs of flexible production, and the lean management of the supply chain promoted the online rate of the whole business system and omni-channel orders to reach 90%, realized the streamlining of personnel and the improvement of efficiency, and reduced the cost of the whole supply chain system, and the annual labor and manufacturing costs per ton decreased by more than 5% year-on-year. New Dairy's Xinhua West plant won the TPM (Global Manufacturing Excellence Award) Excellence Award and will continue to promote WCM's world-class manufacturing plant.
At the same time, the digital traceability platform "Fresh Source" project has realized transparent closed-loop management and forward and reverse quality traceability in the whole process, realized the docking with the food safety information system of local governments such as Yunnan, improved the accuracy of quality analysis and the sensitivity of abnormal alarms, and better ensured food safety in the form of digital technology. At the 5th China Quality Conference in 2023, New Dairy was shortlisted in the top 10 typical case organizations of "Digital Quality Management Innovation and Practice".
With its remarkable achievements in improving operational capabilities and green development, New Dairy has been awarded the "China Best Management Company" by Deloitte for four consecutive years, the "Resilient Growth Brand" by Kantar Global Brand Footprint 2023, Xinhua West, Xiajin Dairy and Hunan Nanshan have been awarded the National Green Factory, Kunming Xuelan has been awarded the Yunnan Province Digital Transformation Benchmarking Demonstration Enterprise, and Qingdao Qinpai has been awarded the Shandong Provincial Management Benchmarking Enterprise.
As the industry enters a new stage of high-quality development with multiple upgrades of product structure, product quality and consumer experience, New Dairy will decisively embrace the opportunities of scientific and technological change and industry transformation and upgrading, adhere to the mission of "fresh, make life better", focus on the core business, strengthen endogenous power from scientific and technological innovation, quality and efficiency improvement, enhance corporate value, drive by new quality power, achieve the stage goal of doubling the five-year net profit margin, and strive to promote the green and sustainable development of the whole supply chain. Technology and other links support the development of the industrial chain, help rural revitalization, and fulfill the social responsibility of listed companies.
Source: China.com Food