A-shares expansion, stocks starting with "002" have been fully staffed, and the era of "003" has officially begun. The first Chinese food brand in fish snacks, holding the listing number "003000", is trying out the new era. On September 2nd, Huawen Food announced its listing and issuance at a price of 5.02 yuan per share, and will officially launch online subscription tomorrow.

Huawen Food is one of the well-known traditional flavor snack food enterprises in China, known for its "Jinzai Deep Sea Fish" brand. With years of technological accumulation and the brand effect of celebrity endorsements, the brand is highly favored by consumers. According to data, in 2019, "Jinzai Deep Sea Small Fish" sold over 1.2 billion packs and held a market share of about 5% in the fish snack industry, becoming the leader in this segment.

This public offering of Chinese food does not exceed 40.01 million shares, accounting for no less than 10% of the total equity after the offering. All of them are new shares. It is planned to raise 161 million yuan to continue to deepen the layout of the research, production and marketing integrated industrial chain, which will be used to invest in the technological transformation project of the flavored fish production line and the brand promotion and marketing center construction project, with a view to further consolidating the leading edge in the fish and leisure food segmentation field on the basis of the company's existing main business, and improving the core competitiveness and market share.

Deep cultivation of the track, dual growth of revenue and net profit against the epidemic

Under the national banner of supporting the consumption cycle, food enterprises are expected to further open up market growth space through differentiated competition. As the top selling brand of ready to eat fish snacks online for three consecutive years, Jinzai has always adhered to independent research and innovation, deeply cultivating the fish snack market while continuously enriching the variety of leisure snack products in the same series, forming a hierarchical product diversification development trend.

At present, through multiple investigations and repeated research and development, Jinzai has developed five characteristic flavors based on the taste preferences of different regions in China, including Nanlu, Beijiang, Dongxiang, Xima, and Zhongla, and successfully put them into production, creating an annual sales volume of 1.2 billion packages of star products and consolidating its leading position in the segmented industry.

At the same time, Huawen Food fully utilizes its economies of scale and resource advantages, and improves its bargaining power through the distribution model of "payment before delivery", promoting synchronous and steady growth of revenue and net profit. From 2017 to 2019, the company achieved operating revenues of 767 million yuan, 805 million yuan, and 895 million yuan respectively, with net profits of 75.6619 million yuan, 115 million yuan, and 118 million yuan.

Faced with the impact of the epidemic at the beginning of the year, Huawen Food took the initiative to respond to challenges, deeply explored the advantages of the integrated research, production, and sales industry chain, and enhanced its voice in the industry chain. In the first half of 2020, its operating revenue reached 451 million yuan, and its net profit increased by 5.05% year-on-year to 63.8937 million yuan, achieving a double growth of revenue and net profit against the epidemic.

The market is vast, and the global strategic layout is imminent

Based on the optimistic outlook on the company's prospects, as early as 2016, Huawen Food obtained a strategic investment of 300 million yuan from Jiawo Group, a subsidiary of Lenovo Holdings. As of now, Lenovo Holdings' subsidiary Jiawo Group holds 19.80% of the shares, making it the second largest shareholder of the company.

According to the official website information, in order to comply with the policy trend of "continuously improving the food safety standard system" in the 13th Five Year Plan, Huawen Food has established a complete and strict quality management system and successfully passed certification systems such as HACCP and ISO9001. In 2019, guiding documents were issued to deepen reform and strengthen food safety work, raise entry barriers in the food industry, and provide solid guarantees for the sustainable development of enterprises that meet quality requirements in the industry.

According to data from the National Bureau of Statistics, the year-on-year growth rate of revenue for food manufacturing enterprises in China has remained above 5% from 2010 to 2018. It is expected that by 2020, the retail market size of leisure food in China will reach 1.2984 trillion yuan, with huge market growth potential. In addition, the countries along the the Belt and Road also show great interest in food enterprises with Chinese characteristics under the strong promotion of the country on the "Belt and Road".

Faced with a vast market space, Huawen Food stated that in the future, it will continue to follow the national requirements for "deeply exploring local specialty foods and traditional Chinese foods" as guidance, continuously adhere to independent research and development and technological innovation, continuously improve traditional product formulas, deeply cultivate the domestic market, layout a globalization strategy, fully leverage its competitive advantages, and further expand and strengthen in segmented markets.