"Glutinous but not rotten, fat but not greasy, tender and delicious, salty and sweet." As a time-honored brand in China, Wufangzhai is famous for its classic zongzi products.
However, with the changes in the market environment and the diversification of consumer needs, Wufangzhai is still stuck in the dilemma of the times although it continues to innovate and explore products, marketing and channels.
In the secondary market, the highlight of Wufangzhai was still at 44.21 yuan per share at the beginning of the listing, and the stock price continued to weaken after that. As of the close of trading on July 2, Wufangzhai quoted 24.91 yuan per share, with a total market value of 3.554 billion yuan.
In order to promote the return of the company's value, Wufangzhai is also actively implementing the share repurchase plan and stabilizing the dividend policy.
According to Wufangzhai's announcement on July 2, the company's 2023 annual equity distribution implementation plan is as follows: based on the total share capital of 139,044,400 shares, a cash dividend of RMB 10.00 will be distributed to all shareholders for every 10 shares, with a total cash dividend of RMB 139 million, accounting for 83.89% of the net profit attributable to the parent company in the same period, and 4.00 shares will be transferred to all shareholders for every 10 shares with capital reserve, and no bonus shares will be given.
The record date of this equity distribution is July 5, and the ex-dividend date is July 8.
Stock price and performance suffered a "double kill"
The history of Wufangzhai can be traced back to 1921. At that time, Zhang Jinquan, a businessman from Lanxi, Zhejiang, carried the burden to sell "Wufangzhai zongzi" in the old town of Jiaxing, which opened a historical chapter of the time-honored brand.
In 1992, Jiaxing Wufangzhai Zongzi Company was established, and "Wufangzhai" was rated as a time-honored brand in China. In 1998, Jiaxing Wufangzhai Zongzi Company was reorganized as a whole, and Zhejiang Wufangzhai Industrial Co., Ltd. was established.
In August 2022, Wufangzhai was successfully listed on the Shanghai Stock Exchange and became the "first stock of zongzi".
What is quite disappointing is that in the face of the strong rise of a number of time-honored brands such as Zhiweiguan, as well as the cross-border arrival of many new power brands, Wufangzhai seems a little "powerless".
Since its listing, Wufangzhai's performance has not only not seen significant growth, but even declined.
From 2021 to 2023, the company's operating income will be 2.892 billion yuan, 2.462 billion yuan, and 2.635 billion yuan respectively; The net profit attributable to the parent company was 194 million yuan, 137 million yuan and 166 million yuan respectively. Judging from the data, the development of Wufangzhai seems to have entered a bottleneck period.
In fact, affected by the seasonal factors of consumption, in the past two years, Wufangzhai only in the second quarter of the net profit for profit, the first, third and fourth quarter of the net profit is in a state of loss.
In the first quarter of 2024, Wufangzhai's operating income will be 207 million yuan, and the net profit attributable to the parent company will be -70 million yuan, both of which will decline from the same period in 2023.
Wufangzhai's profitability is also continuing to decline. In 2023, the company's gross profit margin on sales has fallen to 36.39%, and the net profit margin on sales is only 6.22%.
In the secondary market, the highlight of Wufangzhai was still at 44.21 yuan per share at the beginning of the listing, and the stock price continued to weaken after that. As of July 2, the latest price is 24.86 yuan per share, with a total market value of 3.546 billion yuan.
From the perspective of shareholder structure, the actual controllers of Wufangzhai are Li Jianping and Li Haojia, father and son. As of the first quarter of this year, Wufangzhai Group directly held 29.7% of the company's shares, and indirectly held 7.14% of the shares through its wholly-owned subsidiary, Sino-Ocean Decoration, which are currently restricted and tradable shares.
It is worth noting that the two funds of Dacheng Fund, Dacheng Ruixiang Mixed A and Dacheng Strategic Return Mixed A, both increased their holdings in the first quarter of this year, and the fund manager is Xu Yan.
A century-old brand, actively seeking change
In the eyes of industry insiders, the reasons for the generally low profitability of A-share time-honored listed companies are nothing more than the rigid system, high costs, traditional marketing and the embarrassment of not being able to open up young consumer groups.
The key to breaking the game: first, do a good job in the inheritance of time-honored brands; the second is to expand the time-honored brand industrial chain and develop to multi-product and multi-industrial chains; The third is to endow time-honored brands with "cultural attributes" and further deepen them into "social attributes", which is also the key to opening the revenue ceiling of time-honored brands.
In recent years, Wufangzhai has launched a brand rejuvenation strategy and continued to implement the "glutinous +" business development strategy. In addition, pursuing the business logic of "enterprise development = good strategy × organizational ability", by the end of 2023, Wufangzhai will complete the reform of the organizational structure and form three major business divisions: zongzi division, non-zongzi division, and chain division, to further clarify the strategic direction and improve the organizational guarantee.
On July 1, Wufangzhai released a record of investor relations activities. According to the plan, in 2024, Wufangzhai will continue to develop the second product growth curve around the two major categories of Chinese baking and quick-frozen rice and flour products, and carry out a marketing strategy of omni-channel coverage with Wuhan, Jiangsu, Zhejiang, Shanghai and Anhui as the regional model markets, open up the development model of non-dumpling categories, and form a growth model of non-dumpling products. Quick-frozen products will focus on the family breakfast scene, focusing on rice and flour snacks such as rice balls, siu mai, and glutinous rice balls, to create Wufangzhai special quick-frozen foods with a quality-price ratio.
According to the data, from the end of 2023 to the present, Wufangzhai has successively reviewed and explored the business model of the store, and finally clearly created the business model of "catering + retail" stores based on "Chinese fast food + breakfast scene". At present, this model is still being explored and refined. In 2024, the restaurant chain will steadily expand its stores within 200 kilometers of Jiaxing as the center to achieve large-scale operation in the core area.
It is worth noting that Wufangzhai has officially launched the restaurant chain at the end of March this year. Judging from the relevant franchise policies announced, the qualification review control is stricter, and the "one store and one trial" system is adopted, which is the principle of joining the quality as the goal to carry out the franchise work. Wufangzhai said that the operating conditions of the franchise stores that have been opened are relatively good, and all of them have met expectations.
In the eyes of industry insiders, whether the road of "catering + retail" in Wufangzhai can go through and whether it can become a new growth point for its performance in the future remains to be verified by time. In this mode, on the one hand, it is a very big test for offline channels and cold chain transportation; On the other hand, it is not only necessary to face the C-end group, but also to open the B-end market, which is a new challenge for Wufangzhai.