The Zhitong Finance App learned that under rapid development in the early stages, Huachuang Securities released a research report saying that under the rapid development of the precooked food industry, financing and production capacity were rapidly expanding, and industry competition deteriorated. At the current point, with the implementation of new industry regulations, the industry ecology and competitive pattern are expected to gradually improve. Coupled with the continuous extension of the catering industrialization logic, there is plenty of potential to increase the penetration rate of prepared dishes in the medium to long term. In the future, prepared food companies with strong comprehensive strength are expected to release high growth potential. The targets recommend Yasui (603345.SH), a leading premade food company, and Senbi (001215.SZ), which has excellent comprehensive strength and is gradually testing the waters for prepared dishes, and focus on Babi (605338.SH), Sanquan (002216.SZ), and Mishika (605089.SH).

The main views of Huacheng Securities are as follows:

Incident: On March 21, six departments including the General Administration of Market Regulation jointly issued the “Notice on Strengthening Food Safety Supervision and Promoting High-Quality Development of the Prepared Dishes Industry”, clarifying the scope of the precooked dish concept for the first time and promoting the standard system of prepared dishes and food safety supervision. Furthermore, on March 28, 9 departments including the Ministry of Commerce issued guidance on promoting the high-quality development of the catering industry, which proposed regulating the development of the prepared food industry.

Content analysis: For the first time, the definition and scope of prepared dishes were clarified at the national level, and the establishment of an industry standard system and food safety supervision was promoted, but entry thresholds were not involved yet. The notice mainly includes two major aspects. One is to continue to encourage the establishment of industry standard systems and high-quality development at the level of principles and guidelines, while also focusing on food safety supervision; the other is to provide guidance on actual operation:

The definition and scope of prepared dishes: that is, pre-packaged dishes that can only be eaten after heating or cooking without adding preservatives, excluding staple foods such as frozen rice and noodles, dishes prepared in a central kitchen, and uncooked clean dishes that are simply processed by cleaning, peeling, cutting, etc., are not prepared dishes. The definition is mandatory after enactment, but it does not cover strict prohibitions or entry thresholds, and the implementation rules need further details;

Vigorously promote the use of prepared dishes in the catering sector: This standard is advocated by the government, but it is not mandatory. It aims to guarantee consumers' right to know and choose, and guide the development of the restaurant industry in an orderly manner.

Impact outlook: Guide the industry to bid farewell to disorderly expansion, leading standardized enterprises are expected to benefit. As far as the precooked food category is concerned, under long-term definitions and unclear standards, market participants are mixed, and products and marketing are mixed, which not only damages consumers' trust in prepared dishes, but also leads to a low-level vicious competition situation at the enterprise level. If the new regulations take effect, the previous situation affecting prepared dishes due to school group meals (central kitchen) public opinion incidents can be effectively avoided. For local governments, once the definition is clear, it is more conducive to orderly investment in prepared dishes and rational construction of industrial parks in various regions, and to guide the industry to gradually achieve high-quality development in a targeted manner. As far as prepared food companies are concerned, the new regulations place higher requirements on food technology research and development, supply chain logistics, manufacturing equipment, etc., and regulations relating to food technology cannot be added, directly increasing the cost of small and medium-sized enterprises and indirectly raising the entry threshold. It is expected to accelerate the clearance of poor quality production capacity in the medium to long term, and standardized large enterprises are expected to continue to benefit.

Policy path: Refer to the interpretation of health products and medical and aesthetic regulations. The new regulations are only the first step in standardizing the industry, and future policies will still focus on care. On the one hand, industry regulatory policy formulation has generally experienced “frequent chaos, standard setting and repeated revisions, establishment of an enforcement rule system, and strict implementation of supervision”. This new rule is the government's official response to the precooked food chaos and food safety incidents in recent years. It is also the first step in the standardization of the prepared food industry. Future industry supervision policy formulation is expected to accelerate. On the other hand, compared to mature regulatory systems such as health products, medicine, etc., the prepared food industry does not currently have a strict registration and filing entry system, and there are still a number of regulatory details to be improved. Cooking presents the first, two, and three industries Integrated development has a long industrial chain and is related to the three agricultural issues. Therefore, the bank believes that strict supervision of the health products industry in 18-19 and the medical and aesthetic industry in 21-22 will not occur in the short term. The policy is more centered on care, and it is expected that the new regulations will not have a clear negative impact on terminal sales.

Risk warning: Cost reduction falls short of expectations, industry competition intensifies, etc.