Who is behind Haidilao? Unravel the commercial legend of Yihai International, an investment diamond in the stock market!

Haidilao is familiar to everyone. With its excellent service, fresh ingredients, and unique recipe, it has become a leader in the hot pot industry. Yihai International (01579.HK) is also a leader among the leaders, with a current market value of HK$17.852 billion.

Financial reports show that in 2023, Yihai International's annual revenue reached 6.148 billion yuan and net profit of 907 million yuan, an increase of 11.2% over the previous year.

In terms of product types, the single hot pot seasoning category contributed 66.5% of the company's revenue. Well-known food industry analysts said that compound condiments must be the future direction of the industry:

According to a research report released by Ai Media Consulting, China's compound condiment market size is about 158.8 billion yuan in 2021. The market size is expected to reach 336.7 billion yuan in 2027, with a compound annual growth rate of about 13.3%. This growth rate is significantly higher than the overall condiment industry, which also shows that it is a racetrack with great market potential in the consumer sector.

In the Hong Kong stock market, Yihai International (01579.HK) has attracted much attention for its leading position in the condiment industry. As a company that started with hot pot ingredients and gradually developed into diversified condiments, Yihai International not only occupies an important position in the domestic market, but its brand influence and product strength are also gradually spreading around the world.

Next, Xiaobian will conduct an in-depth analysis of Yihai International's market performance, financial situation, product innovation, and channel development to provide more comprehensive information reference for investors' investment strategies.

Since its launch, Yihai International has achieved steady performance growth through deep cultivation in the hot pot seasoning market.

According to the latest financial report, the company's revenue for 2023 reached 6.148 billion yuan, down 6% from the previous year's revenue; net profit was 853 million yuan, up 11.2% year on year.

This achievement is particularly valuable in the current context of the gradual recovery of the consumer market. It also shows the competitiveness and profitability of Yihai International in the condiment industry.

Yihai International's financial report shows that as of 2023, the company's price-earnings ratio (TTM) was 16.060, net market ratio was 2.842, earnings per share were 0.875 yuan, and net assets per share were 4.65 yuan.

In 2023, Yihai International's financial performance showed significant fluctuations. Revenue declined throughout the year and fell short of market expectations. This was mainly affected by rising raw material costs and fluctuations in market demand. But even so, the company achieved an increase in earnings per share (EPS) by strictly controlling costs and improving operational efficiency, which exceeded analysts' expectations.

In terms of market response:

Following the release of its full-year results in March 2023, its stock price fell 17% in the short term due to declining revenue.

In September, the CEO's move to increase stock holdings boosted market confidence to a certain extent, causing stock prices to rise somewhat.

Beginning in November, as market sentiment improved, stock prices rebounded slightly again.

Overall, in the face of revenue pressure, Yihai International has maintained relatively stable profitability through internal management optimization, but the market is still cautious about its long-term growth potential. In the future, the company needs to further enhance its market share and product competitiveness to meet industry challenges and achieve sustainable growth.

In the past year, Yihai International launched a total of 26 new products in the three major series of soups, dipping sauces and compound seasonings. The launch of these new products had a positive impact on the company's earnings and stock price.

First, these new products helped the company expand its market share, attract more consumers, and increase the variety of revenue streams. The innovation and diversification of new products meets the changing taste needs of consumers and enhances brand loyalty.

Second, the successful launch of new products and market popularity have boosted investors' confidence in the company and boosted the short-term rise in stock prices. In September 2023, the company's stock price rose 8% after the release of the new product, which reflects the market's positive expectation that the new product will contribute to profitability.

Overall, the introduction of new products has laid the foundation for future profit growth. However, the company still needs to continue to innovate and optimize its product structure to maintain competitiveness and market position.

In 2023, Yihai International will actively implement channel development strategies, such as a sales partner mechanism.

The mechanism allows the company to establish closer partnerships with distributors and retailers around the world to more effectively bring products to market. This mechanism not only improves distribution efficiency, but also enhances channel flexibility and response speed, enables the company to more quickly adapt to changes in market demand, and significantly improves market coverage and sales efficiency.

In addition, the company has also expanded online sales channels to promote products through e-commerce platforms and social media to attract more young consumers. This expansion of online channels has increased brand exposure and sales, effectively making up for the shortcomings of traditional channels.

On the revenue side, although full-year revenue fell 6% from HK$6.5 billion the previous year to HK$6.1 billion, this negative impact was partially offset by profits from developing new channels. It has played a positive role in the company's revenue growth, increasing market penetration rate and product sales.

In terms of stock prices, the successful implementation of the channel expansion strategy has boosted market confidence. After the company announced the expansion of the sales partner mechanism, the stock price rose by about 8% in the short term, showing that investors are optimistic about the company's potential for future revenue growth.

At the same time, the growth in online channel sales has also boosted investors' confidence in the company's digital transformation and further boosted the rise in stock prices.

In summary, in 2023, Yihai International successfully expanded its market coverage and distribution efficiency through channel expansion and sales partnership mechanisms, partially offset the downward pressure on overall revenue and boosted investor confidence. As a result, the stock price increased.

Looking forward to the future, Yihai International has a clear development strategy.

The company will continue to use its strong product strength and brand influence to promote product and service upgrades, relying on advanced supply chain management and technological innovation. This will enable it to meet customer needs more effectively and enhance market competitiveness in the gradually recovering global consumer market.

At the same time, Yihai International is actively expanding the international market, adjusting the taste, appearance and packaging of overseas products through in-depth research and adapting to consumer preferences in different regions. To this end, the company has set up a dedicated overseas product development team with the aim of better understanding and integrating the cultural elements and eating habits of various regions, so as to develop more attractive localized products and promote brand diversification.

These efforts will not only increase the acceptance of products in international markets, but will also promote global awareness and market expansion of the company's brand.

Through these strategic initiatives, Yihai International will establish a more stable global business structure and enhance the long-term sustainable development capabilities of enterprises. The company also plans to strengthen relationships with international partners, explore new market opportunities through win-win cooperation, and jointly address challenges and changes in the global market.

Considering Yihai International's steady financial performance, strong brand advantage, and continued performance growth, Xiaobian believes that the company is an investment target worth paying attention to. However, investors should also pay attention to the following points:

Market competition: As the compound condiment market continues to expand, competition is also intensifying. Yihai International needs continuous innovation to maintain its market position.

Fluctuations in raw material prices: As a food manufacturer, fluctuations in raw material costs can have an impact on profit margins.

Macroeconomic environment: Slowing economic growth or declining consumer confidence may affect a company's sales.

Based on the above analysis, investors are advised to follow Yihai International for a long time and make investment decisions after comprehensively considering individual investment goals and risk tolerance.