The sky is unlimited for birds to fly at ease, as the ocean is boundless for fish to leap at will. On September 14th, the Shanghai and Shenzhen stock markets welcomed the "first stock of fish snacks", and Huawen Food Co., Ltd. made its debut on the Shenzhen Stock Exchange's SME board, officially competing in the capital market. Huawen Food has become the third leisure food listed company in Hunan after Juewei Food and Yanjinpuzi.

On June 14, 2019, the China Securities Regulatory Commission accepted the application for listing of Huawen Food on the SME board; On November 29th, the China Securities Regulatory Commission disclosed the first round of inquiries from the company; Pre disclosed updates on December 13th; On June 4th, 2020, the company successfully passed the meeting; Received approval on August 21st; Successfully launched on September 14th.

Looking back at the process of Chinese food's "rush exam", from submitting listing materials to officially listing on the A-share market, it took 15 months. This food company from Yueyang, known as "Jinzai Deep Sea Fish", has finally "jumped the dragon gate".

Since the beginning of this year, food and beverage stocks have been highly sought after by the capital market. Taking Ganyuan Food, which recently went public, as an example, this company belongs to the leisure snack sector along with Huawen Food, and its valuation after listing is as high as 80 times. Based on this valuation level, the stock price of Huawen Food is expected to reach around 25 yuan, which means the company is likely to impact a market value of billions.

At the listing ceremony, the chairman of the company, Zhou Jinsong, was deeply moved. He stated that the company will focus on the traditional flavor leisure food industry, seize the opportunities of rapid industry development, and build itself into a world-renowned leisure food enterprise.

Dual wheel drive, leading product market share

Huawen Food is a modern food enterprise that focuses on the research and development, manufacturing, and sales of traditional flavor snack foods.

Since its establishment in 2010, the company has seized the opportunity of rapid industry development and deeply cultivated in the field of traditional flavor leisure food. Through self built raw material bases, full process cold chain transportation, refined warehousing, intelligent production, global marketing, etc., the company has continuously improved its smart supply chain system and actively promoted the construction of a food traceability system to ensure food safety and quality.

By leveraging our own strengths, continuously exploring market demand, actively laying out advantageous areas, and delving deeper into market business. After years of accumulation, Huawen Food has established a nationwide marketing network.

Offline, there are more than 1000 cooperative distributors of Chinese food, and stable cooperative relationships have been reached with Carrefour, Wal Mart, CR Vanguard and other well-known chain stores; Online, Huawen Food is one of the first leisure food companies to enter the e-commerce industry, and has now formed an integrated e-commerce channel pattern with multiple platforms such as Tmall, JD.com, Pinduoduo, and WeChat mini programs.

By walking on two legs online and offline, Chinese food has become more stable. From 2017 to 2019, the company's operating revenue was 767 million yuan, 805 million yuan, and 895 million yuan respectively, and the net profit attributable to the parent company was 75.6619 million yuan, 115 million yuan, and 118 million yuan respectively, all of which achieved steady income growth.

Even under the impact of the COVID-19 in the first half of 2020, the net profit of Chinese food revenue also increased positively. In the first half of 2020, the company's operating revenue was 450 million yuan, and the net profit attributable to the parent company increased by over 5% year-on-year to 63.893 million yuan. According to the company's forecast, the net profit attributable to the parent company from January to September 2020 is expected to reach 78.7323 million yuan to 86.6055 million yuan, with a change rate of 0-10% compared to the same period last year.

Huawen Food stated that it will continue to focus on channels such as large shopping malls, convenience stores, and new retail, and further expand its market share through online and offline dual wheel drive. The company's profitability is expected to further improve.

Brand polishing, achieving 1.2 billion yuan underwriting of crown star products

In the leisure food industry with a large quantity, sufficient competition, and high degree of marketization, brand has become the key to enterprise growth and strength. 

According to a research report by Chuancai Securities, big brands seize the opportunity to grab market share. Since 2010, the growth rate of the non branded leisure braised products market has only been 5% -10%, while the growth rate of the branded leisure braised products market has reached as high as 29% -33%.

Huawen Food is obviously well versed in this field. Since its establishment, it has always attached great importance to brand building and development, and has invested nearly 100 million yuan in brand promotion over the past three years. Last May, Jinzai Deep Sea Fish announced a new celebrity spokesperson, Deng Lun. Prior to this, Hunan TV host Wang Han had long endorsed the brand, laying a broad mass base.

After years of deep cultivation and operation, "Jinzai" has gained high recognition nationwide and has many loyal and stable consumers.

Data shows that in 2019, in the field of ready to eat fish snacks, Jinzai's offline channel sales accounted for nearly 90%, ranking first in the industry for three consecutive years; According to the industry rankings of instant fish snacks on Taobao and Tmall online, from 2018 to 2019, Jinzai's sales exceeded 80 million yuan, ranking first in the industry and surpassing second place by about 30%.

In 2019, the annual sales volume of Jinzai Deep Sea Small Fish under Huawen Food exceeded 1.2 billion bags, with a market share of about 5% in the leisure fish snack industry, firmly ranking first in the industry; Jinzai flavor dried tofu rank among the top ten in the industry. Our company's products are exported to multiple overseas countries such as the United States, Canada, and Australia.

Having tasted the sweetness, Huawen Food stated that it will further increase the company's brand promotion efforts on the basis of its existing brand advantages, enhance the influence of the "Jinzai" brand in the national market, and further strengthen marketing investment through various means such as new media promotion and ground brand promotion.

On the one hand, through various methods such as celebrity endorsements, live streaming promotions, media placements, and terminal promotions, the company's brand culture can be more directly, comprehensively, and accurately interpreted to enhance product visibility; On the other hand, starting from product quality, further enhancing the market recognition and reputation of the product through product upgrades, increasing product added value, and other means.

Technological empowerment further solidifies the first mover advantage

The global layout of the brand requires stable and strong production capacity as support.

To this end, Huawen Food has invested a large amount of funds in building modern production bases and actively promoting the automation production of traditional flavored snack foods. We have cooperated with equipment manufacturers to improve various production equipment and independently developed multiple production technologies.

The prospectus shows that Chinese food has obtained 18 core patent technologies, including flavored small fish processing technology, flavored dried tofu processing technology, and automated equipment production technology, as well as 9 research reserve technologies, including research and development of high-end fish and meat products, and development of hunger filling nutritious bean products.

As early as 2017, Chinese Food signed a strategic cooperation agreement with the School of Food, Jiangnan University. The "Teaching Practice Base of the School of Food, Jiangnan University" was settled in the production base of Chinese food snack food. The two sides will have in-depth cooperation in the production technology of flavored small fish, the processing characteristics of fish resources, and the production technology of fish leisure convenient food.

It is worth mentioning that at present, in addition to the two star products of Jinzai flavor small fish and flavor dried tofu, Chinese food has also launched a series of poultry products such as flavor dried meat, konjac, and flavor vegetarian products; Taking into account the dietary habits and consumer tastes of various regions across the country, we have launched a variety of flavors including spicy, numbing, sauce flavored, sweet and sour, and grilled.

The company stated that it will continue to increase research and development investment in the future, strive to launch more new products and flavors, and minimize the risk of a single product.

The IPO of Chinese food raised 160 million yuan, and nearly 100 million yuan will be invested in the technological transformation project of the flavored small fish production line.

It is reported that the project of Chinese food is planned to be built on the existing land of Pingjiang Chinese in Pingjiang Industrial Park, which is mainly used for technical transformation of flavored small fish production line and construction and purchase of supporting facilities. The project will automatically upgrade the packaging and feeding system of the back section of the original flavored small fish production line, and at the same time build a cold storage and other supporting facilities closely related to the production of flavored small fish.

According to the prospectus, in 2019, the production capacity of Huawen Food Flavored Small Fish was 18000 tons, with a capacity utilization rate of nearly 90%. The company will further expand its production capacity and develop new products through fundraising projects, which will help the company consolidate its leading advantage in the leisure food segment and expand its market share. At the same time, it will significantly improve the automation level of the company's production, better ensure product quality and production stability.