"King of Melon Seeds" Qiaqia Food, plummeted by 60%

Sharp eyes on finance

2024-08-07 17:51Posted on the official account of Beijing Ruiyan Finance

Junzheng Investment is famous for reducing its holdings in Dongpeng Beverage, two days ago, Brother Ruiyan had analyzed that Qiaqia Food is the largest A-share company behind Junzheng Investment, Chen Xianbao, chairman of Qiaqia Food, directly holds more than 8.5% of Junzheng Investment, and Qiaqia Food indirectly holds more than 3.6% of the shares, with a total of more than 12% of Junzheng Investment.

From the perspective of investment, Qiaqia Food and Chen Xianbao's investment in Dongpeng Beverage has been quite successful and has made a lot of profits in recent years, but the investment management of Qiaqia Food's main business in recent years has not been so successful.

The market value has fallen by more than 20 billion

The repurchase was less than 100 million

Qiaqia Food, it is okay to give a domestic "king of fried food", and its Qiaqia melon seeds have long been well-known.

Of course, the three squirrels created by Zhang Liaoyuan, a native of Jixi, Anhui Province, have also won the title of "King of Speculation", but since the listing of the three squirrels, Zhang Liaoyuan has become another Junzheng investment, and has frantically reduced his holdings of the three squirrels and cashed out, so far Zhang Liaoyuan himself has cashed out more than 3 billion, and the market value of the three squirrels has fallen from a high of more than 36 billion to less than 7 billion today, which is not the same as Qiaqia Food!

Interestingly, the highest market value in the history of Qiaqia Food is less than 36 billion, and now the market value is less than 14 billion.

However, the current situation of Qiaqia Food can only be "more than enough than the top", for the shareholders of Qiaqia Food, the past few years have also been quite difficult, after all, the stock price has plummeted by more than 60%, and the market value has fallen by more than 20 billion!

(Screenshot of the stock price trend of Qiaqia Food)

In the face of the continued downturn in stock prices, Qiaqia Food has also taken buyback measures since the beginning of this year.

On June 19 this year, Qiaqia Food announced a repurchase, planning to repurchase no less than 50 million and no more than 100 million yuan of the company's shares, and the upper limit of the repurchase price did not exceed 50.7 yuan per share. By July 10, it was announced that it had completed the repurchase, with a total of 3,504,700 shares, accounting for 0.69% of the total share capital, with the highest transaction price of 29.08 yuan per share, a total cost of 99.9875 million yuan, and an average transaction price of 28.53 yuan per share.

(Screenshot of Qiaqia Food Announcement)

Judging from the stock price performance, the repurchase of Qiaqia Food obviously did not reach the target, announcing that the company's stock price was 29.18 yuan / share the day before the repurchase, and the stock price was 26.86 yuan / share on the day of the completion of the repurchase, and about 20 days after the repurchase was completed, the lowest share price on July 30 touched 25.10 yuan / share, less than half of the upper limit of the repurchase plan price!

Therefore, on the evening of July 12, Qiaqia Food announced that Chen Qi, vice chairman and deputy general manager, increased his holdings of 111,100 shares of the company on July 12, and will continue to increase his holdings of no less than 30 million yuan and no more than 50 million yuan in the next 6 months since the first increase, including 3.0288 million yuan spent on the first increase.

(Screenshot of Qiaqia Food Announcement)

The "second-in-command" executives of Qiaqia Food personally increased their holdings, and finally had an effect on the company's stock price, announcing that the stock price rose by about 1% within a week after the announcement, and then continued to fall, and the stock price rebounded after entering August, with an increase of about 6% since the beginning of this month.

It is worth noting that the 39-year-old vice chairman Chen Qi is the daughter of chairman Chen Xianbao, and the annual salary she will receive at Qiaqia Food in 2023 is 1.0551 million.

Inventories have increased substantially

Gross profit margin continued to decline

The stock price of Qiaqia Food has continued to fall in recent years, which is naturally related to the change in its fundamentals.

The most obvious set of characteristics is that the share price of Qiaqia Food has fallen all the way since the third quarter of 2020, and at the same time, the company's net profit growth rate has also declined, from 42.3% in 2019 to -17.77% in 2023.

(Source: Straight Flush website)

Behind the decline in net profit is actually the year-on-year decline in the gross profit margin of Qiaqia Food, which was 33.26% in 2019, dropped to 31.89% in 2020, and then fell sharply to 26.75% in 2023.

(Source: Straight Flush website)

Judging from the growth rate of net profit and gross profit margin trend of Qiaqia Food, there is really a big bubble in the stock price that will more than double in 2020. This bubble seems to have been validated by the changes in the inventory and accounts receivable of Qiaqia Food in the past few years.

From 2019 to 2022, the inventory of Qiaqia Food has continued to decline, from this point of view alone, it shows that the product sales of Qiaqia Food have been very good in recent years, but combined with the continuous growth of accounts receivable, it shows that it is not the product sales that are good, but the result of Qiaqia Food taking the initiative to de-inventory and turn inventory into accounts receivable.

(Source: Straight Flush website)

(Source: Straight Flush website)

This sign of active destocking has been verified again in the "scissors difference" between inventory and accounts receivable in 2023, and the accounts receivable of Qiaqia Food will decline significantly in 2023, indicating that the company intends to strengthen the management of accounts receivable to recover funds, but as soon as the management of accounts receivable is strengthened, the company's inventory will go up!

So, in the case of continuous decline in gross profit margin, how can product sales still be very good?

It can be seen from the trend of the above main financial indicators that Qiaqia Food has had some problems in product sales since 2019, at least not as well as before.

Under ultra-low R&D investment

Where is the third growth curve?

What happened to Qiaqia Food in 2019 to make the sales of Qiaqia Food blocked?

Coincidentally, there is one thing that can be corresponded in time, that is, in August 2019, it was revealed that Qiaqia melon seeds sold the same product and different quality products to Hong Kong and the mainland, which is known as "double standard", and the "double standard" problem exposed by Haitian Soy Sauce at the end of 2022 has caused serious damage to the brand image, so that product sales, secondary market stock prices, etc. have continued to decline, which is a typical case of angering consumers.

The cause of the 2019 incident was that the 9th food safety sampling inspection in Guangzhou that year was once again on the gang, and a batch of caramel melon seeds was detected with excessive mold and sulfur dioxide residues. Then the matter fermented, and some netizens revealed that the products sold in the mainland and Hong Kong were of different quality, and the earliest could even be traced back to March 2002, when the Hong Kong agent of Qiaqia melon seeds took the initiative to recall the products on the market, and the products in the mainland were marked with the words "only sold in the Chinese mainland market".

So far, although almost 5 years have passed since this incident, consumers have naturally expressed their attitude towards Qiaqia melon seeds with actions, and there are not a few consumers who complain about the quality of Qiaqia melon seeds!

(Screenshot of Black Cat's complaint)

Perhaps, it is also under the pressure of such product sales that this year, Qiaqia Food has put forward the slogan of "looking for the third growth curve".

In May this year, in an institutional survey, Qiaqia Food said that the company is planning its strategy for the next 3-5 years in the near future, and is also looking for a third growth curve, which may start in due course in 2025, but this must be a category with market size, at least its own turnover can reach 2 billion to 5 billion in the medium and long term.

(Screenshot of Qiaqia Food Announcement)

Some people may wonder, how can it be the third growth curve? In fact, as early as 2017, Qiaqia Food has basically found the second growth curve, that is, the nut business, and by 2023, the nut business has accounted for more than a quarter, but the growth rate has slowed down significantly in recent years, and there is no clear direction for the third growth curve!

It's no wonder, after all, Qiaqia Food's investment in R&D over the years can really be called "stingy", with a revenue of 6.806 billion in 2023, only 64.6045 million will be spent on R&D, and the R&D expense rate is less than 1%, which is about the same as the interest income of 55.4823 million.

Speaking of which, it is worth noting that as of the first quarter of this year, Qiaqia Food held a total cash of 5.752 billion, accounting for 61.24% of the total assets of 9.392 billion!

With most of the assets in the bank "lying down" and only a little bit of investment in R&D, it is not surprising that no new growth point can be found in the face of declining performance.

However, for Qiaqia Food, it seems that the more important thing at present is not the second or third growth curve, but the need to pay close attention to product quality, and establish an image of focusing on product quality and food safety in the hearts of consumers, which is the foundation for recovering the company's performance!

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