Original title: The overall business structure is relatively simple
Wolong, the creator of the “Daily Nuts” category, is about to go on the market? On January 8, a reporter from Beijing Business Daily learned that Qingdao Wolong Food Co., Ltd. (hereinafter referred to as “Wolong”) has recently submitted an initial public offering prospectus (draft), and plans to sprint for an IPO listing on the Shanghai Stock Exchange. It is expected to raise funds 700 million yuan, 310 million yuan for intelligent production transformation and intelligent warehousing and logistics center construction projects, 210 million yuan for brand image and omni-channel sales network construction projects, and 180 million yuan for supplementary working capital.
According to the information on the official website, Wolong was established in 2016. It is an enterprise integrating production, processing, international trade and e-commerce. It is the first in China to create a series of daily nut products. series. On June 22, 2022, Wolong Foods had pre-disclosed the prospectus, and the sponsor was CITIC Securities.
As the pioneer of the daily nut category, Wallon’s sales once exceeded 1 billion yuan by virtue of the first bonus. But in recent years, Wallon has been somewhat “made in nuts, trapped in nuts”. According to the latest prospectus, from 2019 to 2021, Wolong’s main business revenue accounted for 99.53%, 98.78%, and 98.92%, respectively, of which the revenue from mixed nut products accounted for 92.14%, 85.73%, and 85.73% respectively. 75.74%. On the whole, the nut business is still the main force of Wallon, and the overall business structure is relatively simple.
In the prospectus, Wolong stated that during the reporting period, the revenue from mixed nut products still accounted for a relatively high proportion. If the market competition for such products intensifies or changes in consumer preferences in the future, it may have an adverse impact on the company’s production, operation and performance. . According to the data from Qianzhan Industry Research Institute, the market growth rate of China’s mixed nut industry has gradually dropped from 400% in 2016 to 16% in 2021, and the overall growth rate of the industry has slowed down. The risk may be even higher.
According to the prospectus, in 2019, 2020, 2021 and the first half of 2022, Wolong will achieve revenues of 1.1649 billion yuan, 889.4 million yuan, 1.1079 billion yuan and 436 million yuan respectively, with net profits of 131.2 million yuan and 887.085 billion yuan respectively. 10,000 yuan, 119.6 million yuan, and 26.8453 million yuan. According to Wolong’s forecast, the revenue in 2022 will be between 1 billion and 1.2 billion yuan, a decrease of 9.74% to an increase of 8.31% compared with the same period of the previous year; the net profit attributable to shareholders of the parent company is expected to be 90 million to 110 million yuan, A year-on-year decrease of 24.74%-8.02%.
At the same time, due to the low threshold and strong substitutability of the nut industry, there are many entrants. Many snack food companies have also aggressively joined the competition in the nut market. Brands such as Three Squirrels, BESTORE, and Baicaowei have also launched daily nut categories. The market share has been eroded, and the market share is gradually declining.
The data shows that in 2019, Wallon’s market share in the mixed nut industry reached 13%, ranking first in the industry; by 2021, Wallon’s market share is only 7.2%, and has slipped to third place. In iiMedia’s list of “Top 15 Chinese Nut Snack Brands in 2021”, Wolong ranked fifth after Baicaowei, Three Squirrels, BESTORE, and Qiaqia.
From the perspective of the industry, Wallon’s product structure is single, relying only on daily nuts, and there is a risk of lack of follow-up for explosive products. Wallon needs to gradually explore the layout of multiple categories and build a solid product moat. At present, new products still focus on nuts and related categories.
Shen Meng, chief strategist of Guangke Consulting, a subsidiary of Guangke Academy of Sciences, said that many consumers are familiar with “Daily Nuts” but not Wolong, which shows that its brand power needs to be strengthened. Whether it is a category or a corporate brand, it needs to highlight its competitiveness with other competitors. Product difference. The risk of Wallon’s business structure comes from the fact that the proportion of a single business is too large and the competitive advantage of differentiation is not obvious, which may lead to large fluctuations in performance due to competitive pressure. Wallon urgently needs to create brand differentiation and improve competitiveness.
Regarding the above issues and subsequent developments, a reporter from Beijing Business Daily sent an email to Wolong’s official website mailbox for an interview, but no reply was received as of press time. (Reporter Guo Xiujuan Zhang Han)