With the slowdown in the consumer market in China and the intensification of competition in the corporate market, “pre-packaged meals” are facing unprecedented challenges. Recently, the performance and stock price of “Wizhi Xiang”, known as the “first stock of pre-packaged meals” in the A-share market, have suffered a double blow.
According to reports from Haibao News and Kanjian Finance, Suzhou Wizhi Xiang Food Co., Ltd. (referred to as “Wizhi Xiang”) recently released its 2024 interim report. The data shows that in the first half of the year, Wizhi Xiang achieved operating income of about 327 million yuan, a decrease of 21.53% year-on-year; net profit was about 42.2891 million yuan, a decrease of 43.37% year-on-year.
In the financial report, “Wizhi Xiang” explained that the decline in revenue was mainly due to the impact of the market environment leading to a decrease in income.
Additionally, the stock price of “Wizhi Xiang” has continued to decline, dropping to 16.38 yuan per share on September 18. As of the latest closing, compared to its highest point since listing, the cumulative decline has exceeded 75%, with a market value evaporating over 10.6 billion yuan, leaving a market value of only 3.075 billion yuan.
Established in 2008, “Wizhi Xiang” went public on the Shanghai Stock Exchange in 2021, mainly engaged in the research and development, production, and sales of semi-finished dishes. According to the financial report, “Wizhi Xiang” primarily operates through distribution, with a small amount of direct sales, all of which are one-time sales. The company’s sales channels mainly consist of retail and wholesale channels, with the retail channels divided into distribution store channels and franchise store channels based on company management policies, brand authorization, and customer conditions.
The official website shows that “Wizhi Xiang” requires franchise stores to have a business area of not less than 8 square meters, a frontage of more than 3 meters, and the location of the store mainly in agricultural markets, fresh supermarkets, etc. The franchise threshold is not high, with no franchise fee required. The total cost, including performance guarantees, basic display props, and opening support fees, is around 42,800 yuan. Staff wages, rent, procurement costs, etc., are borne by the franchisee, and 100% of the store profits go to the franchisee.
Looking at the main operating data in the financial report, the revenue of “Wizhi Xiang” franchise stores in the first half of the year was not ideal, with a total income of 176 million yuan, a decrease of 20.6% year-on-year. Regarding changes in distributors, the number of franchise stores decreased from 1,823 at the beginning of the reporting period to 1,778, with 82 new franchise stores added and 127 closed during the reporting period.
According to China New Economic Longitude, aside from the decline in performance, in 2021, Wizhi Xiang closed 102 franchise stores; in 2022, the company closed 183 franchise stores; in the 2023 interim period and the third quarter, Wizhi Xiang respectively closed 106 and 66 franchise stores.