After today's plate, bread and pastry maker Peach and Lee Bread () disclosed the 2019 annual results express. According to the company's forecast, last year it achieved total operating income of 100 million yuan, a year-on-year increase of%; total profit of 100 million yuan, a year-on-year increase of%; net profit attributable to shareholders of listed companies of 100 million yuan, a year-on-year increase of%; net profit attributable to shareholders of listed companies of 100 million yuan, a year-on-year increase of%; and basic earnings per share.
The company disclosed that the main reasons for its revenue growth during the reporting period include: constantly strengthening marketing channels, improving the quality of distribution services to increase single store sales; opening up new markets and increasing the number of sales terminals. The company's net profit attributable to shareholders in listed companies grew by% year-on-year, significantly lower than revenue growth due to increased spending on new markets during the period.
As of today's close, the latest offer for peach and plum bread was in yuan, a small decline of%. The latest total market value of the company is 100 million yuan. For the whole of last year, the company's stock price emerged from a wave of continuing uptrends from the beginning of the year to october, and on october 11th its share price hit an all-time high before a small correction.
Peach and Plum Bread, formerly known as Shenyang Peach and Plum Food Co., Ltd., was founded in 1997, focusing on the production and sale of high-quality baking products with bread and pastry as the core. Its main products include \"Peach and Plum\" brand soft bread, crisp bread and conditioning bread three series of bread. In addition, the company also produces moon cakes, zongzi and other traditional festival food.
By the middle of last year, the company had a wide range of operations in Northeast China, North China, East China, Southwest China, Northwest China, East China, Southwest China, Northwest China and South China.However, in terms of revenue share, peach and plum bread originating in Shenyang are still more dependent on the Northeast, North China and East China markets, which contribute%,% and% of the company's revenue respectively.
Compared with the data for 2019 and mid-2018, we can find that in addition to the increase of more than 100 million in Northeast and South China, the market growth in the rest of the region is relatively weak. Northwest region, south-west region, south china region contribution revenue growth of less than 50 million yuan.
Last november, a financial media published \"peach and plum bread major shareholder intensive reduction in revenue growth slowed several data doubts,\" said that peach and plum bread bread face unable to open up new markets, into the cycle of frequent refinancing shareholders re-holding, and the company has a number of data fraud suspected.
But if accounting data is suspected of being fake, the blame for the company's inability to open up the market and slow revenues is supported by data. Looking back at company revenue data for 2016,2017,2018 and the latest 2019, its year-on-year growth rate is%,%,% and% respectively - and its revenue growth is indeed slowing in terms of numbers.
In last year's China Daily, the company said that in the first half of the year, the focus was on accelerating the construction of strategic regional sales networks and expanding new markets such as East and South China. But according to Zhu Danpeng point of view, peach and plum bread in South China market is facing greater competition or because the baking market in the region appears earlier and the industry is more competitive. In addition, the shelf life of peach and plum bread is about 5-7 days in winter, but the shelf life is longer in South China, which is difficult to cater to the consumption habits of local consumers.
As of the first half of last year, the company still had less than 7 per cent of revenue in south china, and its subsidiaries in shanghai, shenzhen, wuhan, jiangsu, hefei, guangxi, changsha and xiamen were still in a state of loss, according to the company. Obviously, investing too much resources\/money in the new market without making a corresponding return is also responsible for the sharp decline in full-year profit growth.
On the other hand, aggressive expansion naturally requires more money. Launched in December 2015, the company raised a total of 100 million yuan for Shenyang bread series product production base construction project, noodle food production and processing phase II project, Harbin bread series product production base construction project, Shijiazhuang peach and plum bread series product production base construction project.
In December 2017 and September 2019, the company again raised 100 million yuan and 1 billion yuan through targeted additional issuance and issuance of convertible bonds for the construction of production projects in Wuhan, Chongqing, Xi'an and Jiangsu, Sichuan, Qingdao and Zhejiang, respectively. But it is worth noting that soon after the 2017 fundraising plan was proposed, the company announced that it would change the use of the raised funds that have not been used in the food production projects in Chongqing and Xi'an to the baked food production project in Shandong Taoli, and extended the planned construction completion time of the baked food production project in Wuhan from March 2019 to June 2020.
It is assumed that the company's Wuhan project delayed production or its poor performance in central China. The company's ever-changing business plans will make it difficult to get enough confidence in its prospects.
At the same time, another inevitable \"side effect\" of the big expansion is the huge increase in sales costs. In the first three quarters of last year, the company's sales expenses were 100 million yuan, an increase of% over the same period last year. And looking back at the 2017 China News, although its sales expense growth rate has been reduced from% to%, the sales expense still partially eroded the profit margin of the company's reporting period.
It is reported that the company's sales expenses mainly include store expenses, product distribution expenses and advertising expenses – a part of the cost that seems inevitable for the peach and plum bread that has been badly feedbackd in the new market but still insists on expanding aggressively.
Back to roots, peach and plum bread was first founded in 1997 by retired teacher wu zhigang. As a family business, its holdings are also highly concentrated in Wu Zhigang and his relatives. As at 14 November last year, eight of the company's top 10 shareholders, excluding Hong Kong Central Clearing Limited and Taikang Life Insurance, respectively, were controlling shareholders and their main relatives, holding more than 76% of the company's shares.
In addition to their highly concentrated holdings, these shareholders are also keen to reduce their holdings. From february to the end of last year alone, the company's fifth-largest shareholder, wu xuelong, reduced its holdings six times and its seventh-largest shareholder, sheng yaping, five times. However, the company said the frequent reduction of its executives did not have a reason for lack of confidence in the company's development, but only because of \"personal life needs \".
In today's full-year results express, peach and plum bread also said it had 100 million shares of equity at the end of the year, an increase of% from the beginning of the year, mainly due to the introduction of equity assignments during the reporting period, with capital accumulation fund transfers to all shareholders. In addition, due to the issuance of convertible bonds during the period, the company's total assets at the end of the period was 100 million yuan, an increase of% over the same period last year.
In terms of the company's major shareholders and its operations, it seems to be more concerned about its share price performance than it is in the new market, which is struggling to achieve the expected growth in net profit.
But it is clear that the company's stock-price growth cannot be divorced from fundamentals in the long run. If growth in peach and plum bread continues to slow, the trend may also eventually be reflected in the stock performance of its secondary market.