Consumer Staples Author：EqualOcean News , Yijuan Li Editor：Tao Ni Feb 23, 2022 11:56 PM (GMT+8)

Even as the food industry recovers from Covid-19 and makes more profits, the capital market seems to have lingering doubts

Qiaqia

Qiaqia Food (002557) (Chinese: 洽洽食品), China’s largest  producer of roasted seeds and nuts by market value, reported on February 22  a revenue of CNY 5.985 billion (USD 945.513 million) in 2021, up 13.15% year on year. 

The company also posted a net profit attributable to shareholders of the listed company of CNY 930 million, registering a year-on-year growth of 15.52%. 

Faced with recurrent epidemic outbreaks worldwide and the ever-changing business environment, Qiaqia doubled down on e-commerce and continued to enlarge its sales channels and explore new consumption scenarios in 2021, said the company in a public filing. 

The company also continued to optimize the product mix and tweaked product prices according to changes in demand and supply.

Besides products, the food producer adjusted its organizational structure in May 2021. The business department was overhauled according to product categories into separate units covering domestic sunflower seeds, nuts, and comfort food. The head of each unit is in fully responsible for the gains and losses and marketing channels of certain products. 

Meanwhile, the snack firm also set up aseparate department to focus on expansion and operations abroad. According to Qiaqia, these measures are aimed at creating stronger synergies between its product and sales teams.

Following the reshuffle, Qiaqia said it forecasted annual sales to exceed CNY 10 billion over the next two to three years. In addition, it projected the number of its retail stores to reach 1 million in three to five years. 

Nonetheless, the epidemic still has hampered a full recovery of the snack industry even though many players appear to have escaped from the worst of a Covid-led slowdown.

Competitors of Qiaqia have banked on better sales as the pandemic subsides and customers return, but the spike in revenue hasn’t translated into stronger stock prices for some.

The nut seller Three Squirrels (300783) (Chinese: 三只松鼠) reported a net profit of CNY 442.25 million in the first three quarters of 2021, up 67% year on year. 

But the company’s shares in 2021 failed to reach the 250-day moving average of the A-share market, meaning a stock’s average closing price in the preceding 250 days, which is a key barometer of stock performance.

Three Squirrels stock prices have almost slid to the level when it first went public. The company’s market cap stood at CNY 12.988 billion as of Wednesday. Many investors, such as Nice Growth Limited, historically trimmed their stakes in the company and sparked sell-offs, sending its shares plunging.

Snack brand Bestore (603719) (Chinese: 良品铺子) recorded a net profit of CNY 317.59 million in the first three quarters of 2021, up 20.3% from the same period the previous year. Its stocks closed 2.15% higher today, putting the market cap at CNY 14.665 billion, almost half of Qiaqia’s CNY 28.646 billion.

According to Eastmoney (Chinese: 东方财富), a financial data platform, the Wuhan-based snack company had a balance of financing of CNY 101 million as of yesterday, hitting a record low over the recent year.

Another listed snack company, Shanghai-based LYFEN (Chinese: 来伊份) , also ended higher in today’s trading, up 1.55%, but its market cap is much smaller, hovering around a mere CNY 4.2 billion.

As of today’s trading, Qiaqia’s shares rose 5.21% to CNY 56.5 apiece, with a market cap of CNY 28.646 billion.