Text | Investor Network Xie Yingjie

With the aura of "the first share of high-end snacks", Liangpin Shop Co., Ltd. (hereinafter referred to as "Liangpin Shop", 603719.SH) has steadily increased its revenue in recent years and its stores have continued to expand. But at the same time, the company is also facing the dilemma of shareholders taking turns to reduce their holdings and the market value evaporating.

The core competitiveness of a good shop lies in its perfect product supply chain and rich industry experience, but there are still some problems such as quality control and low R&D expenses caused by OEM mode. Under the influence of high competition in the industry, the company has fallen into a vicious circle of stagflation in recent years, and its gross profit margin has also dropped from over 30% to around 27%.

Today, good shops have announced their return to the image of their neighbors. More than 300 sharp goods and explosive products have reduced their prices by an average of 22%, with the highest drop of 45%. After the news landed, the capital market gave an eager response, and the company’s share price went up and down twice.

However, there are still many practical problems before the company. On December 30, 2023, the second largest shareholder once again threw out the reduction plan.

Both revenue and net profit declined.

In the past two years, the performance of snack food companies has been generally under pressure. In addition to the pressure of high performance in previous years, the most important factor is the influence from the channel side. Snack shops have blossomed everywhere, and new brands such as "Zhao Yiming Snacks" and "Snacks Busy" have won the favor of capital, which has accelerated the pace of "staking the land".

As the industry enters the Red Sea period of competition, good shops continue to expand through the whole category layout SKU, driving revenue, and personally participate in the snack discount track competition.

In the second half of 2022, Liangpin Store launched its sub-brand "Snacks Hard Home" to expand the sinking market by joining mode, and the store mainly sold third-party brand products. In April 2023, Guangyuan Juyi, a wholly-owned subsidiary of Liangpin Store, invested 45 million yuan to participate in Zhao Yiming Food, and held 3% of the shares at that time.

A few months later, Liangpin Store sold all its shares, and at that time, the valuation of Zhao Yiming was only 3.5 billion yuan. Only 22 days after the equity transfer, Zhao Yiming announced the merger with Snacks, with an overall valuation of 10.5 billion yuan.

Liangpin Store is suing Zhao Yiming recently because it didn’t know the integration news in advance and sold its equity at a high valuation.

All of the above have intensified the operating pressure, and the performance has stagnated.

From 2020 to 2022, the operating income of good shops was 7.894 billion yuan, 9.324 billion yuan and 9.440 billion yuan, with growth rates of 232%, 18.11% and 124% respectively, and the net profit returned to the mother was 344 million yuan, 282 million yuan and 335 million yuan, with growth rates of 0.95% and-18.000% respectively.

In the first three quarters of 2023, the revenue of good shops was 5.999 billion, down 14.33% year-on-year; The net profit was 1.91 billion yuan, down 33.43% year-on-year; Among them, the net profit in the third quarter was only 1,998,400, a further sharp drop of 97.88% year-on-year.

The third quarterly report showed that the decline in net profit was mainly affected by changes in the market and platform, the operating income of online channels declined, and the proportion of fixed expenses attributable to shareholders of listed companies increased.

The turnover rate of total assets also showed a downward trend, with 1.49 times, 1.38 times and 1.18 times from the first three quarters of 2021 to the first three quarters of 2023 respectively. This means that the overall operating costs have increased and the growth momentum has shown signs of decline.

As a result, some research institutions have lowered their profit forecasts. Considering that the company’s online business is in the adjustment stage and the layout process of offline stores remains to be seen, Everbright Securities lowered its net profit from 2023 to 2025 to 2.72/3.85/431 billion yuan (down 35.3%/27.54%/31.55% compared with the previous one).

Homogeneous competition depresses gross profit margin

Liangpin Shop is the representative of the last round of snack chain operation. It cut into the market with high-end snacks, opened up offline channels and actively embraced e-commerce and landed in the capital market.

In order to get deus ex from low-end snacks, in 2018, good shops began to market "high-end personal products". The company upgraded its Logo, replaced its brand image with a simple "good" mark, and offline stores began to take the "apple style" with a generous atmosphere. In marketing, the company highlighted internationalization, youthfulness and high-end.

Among the domestic leisure and snack listed companies, only the online and offline channels of good shops account for an even proportion of revenue, and the two channels basically account for half of the revenue. By the end of the third quarter of 2023, there were 3,344 stores in the company, of which direct sales accounted for about 40%.

Among peer companies, Three Squirrels (300783.SZ) and Miss You (002582.SZ) mainly earn online income, and online sales revenue accounts for about 80%; Laiyifen (603777.SH) and qiaqia Food (002557.SZ) mainly rely on offline store revenue, accounting for about 90% of offline revenue.

Online or offline performance growth problems will put pressure on the company’s overall profitability, and the high sales expenses are also dragging down the gross profit margin. The data shows that the sales expense in the third quarter of 2023 was 1.15 billion yuan, accounting for 19.17% of the total revenue.

From the results, the high-end not only failed to improve the profitability of enterprises, but left the impression of "snack assassin" to the market.

The financial report shows that the gross profit margin of good shops has dropped from over 30% in previous years to about 27%, and it was 28.54% in the first three quarters of 2023, which is at a low level among similar enterprises. In terms of peer-to-peer companies, the gross profit margins of Yanjinpu and Laiyi are around 38% and 42% respectively.

In the pre-sale list of double 11 Tmall leisure snacks in 2023, good shops also fell out of the top 10, while in 2022 and 2021, they ranked eighth and second respectively.

In the secondary market, in 2023, the share price of good shops kept falling. From February to September, 2023, the share price dropped from 40 yuan to below 20 yuan.

The stock price downturn is the result of multiple factors: limited product competitiveness, wrong management decisions and overall stock market decline, while the far-reaching background is that the snack industry is changing rapidly-from consumption upgrading to discounts.

Shareholders issue a reduction plan.

According to the data of China Commercial Industry Research Institute, offline channels still account for more than 85% of the circulation share of snack foods. Modern channels such as snack specialty stores and convenience stores continue to occupy the market share of traditional small stores, while the growth of e-commerce platforms is gradually slowing down.

As an old brand, the concern of a good shop is obvious. The most worrying thing is that it will lose its right to speak in the process of playing games with new channels and eventually become a foundry role.

Yang Yinfen, the new chairman of Liangpin Store, recently announced a large-scale product price reduction. According to the open letter issued by the chairman of the board of directors on November 29th, the price of 300 products from all channels of the company was reduced simultaneously, with an average price reduction of 22% and the highest drop of 45%, which was the largest price reduction for the first time in the 17 years since the establishment of the company.

After the news of price reduction was released, the share price of good shops rose sharply. On December 1, it closed at 21.32 yuan/share, recording a daily limit. At this time, it has fallen by 46.18% from the high point of the year in February. In the last month, its share price is still hovering around 20 yuan/share.

In the view of some organizations, good shops are still actively transforming and have achieved some results. Some investors are also worried that under the mode of OEM, the cost and difficulty of quality control in good shops will increase, which will bring product quality problems.

The root cause lies in the brand’s high dependence on the foundry, lack of product research and development capabilities, and price reduction "treats the symptoms rather than the root cause". In the first three quarters of 2023, the research and development expenses of good shops were 36.2 million yuan, accounting for 0.6% of the revenue; In the same period, the research and development expenses of Yanjin Puzi and Chacha Food were 63.19 million yuan and 43.09 million yuan, accounting for 2.1% and 1% of the revenue.

It is worth noting that some shareholders are voting with their feet.

On December 30th, Liangpin Store announced the reduction of shares. Dayong Co., Ltd., the second largest shareholder holding 26.05%, plans to reduce the company’s shares by no more than 12.03 million shares, and the reduction ratio does not exceed 3% of the company’s total share capital.

During the period from May 25th to November 29th, 2023, Dayong Limited reduced its holdings by 17 million shares, accounting for 4.25% of the company’s total share capital, and cashed in 404 million yuan.

Good shops also suffered a clearance of high-quality goods. During the IPO of Liangpin Store, Gaochun Capital held a total of 46,800,300 shares, accounting for 11.67% of the total share capital. As of September 30, 2023, the number of shares held by Gaochun Capital was 16,040,600, and the shareholding ratio dropped to 4%.

To sum up, the transformation of good shops is still in its infancy, and there is still a long way to realize large-scale benefits. The recent shareholder reduction and the lawsuit against Zhao Yiming have cast a layer of uncertainty on the company’s future. Research institutions are cautious about the company’s secondary market forecast, and remind investors to be alert to trading risks.

　　When you go out to play during the holidays, many people will send beautiful pictures in the circle of friends and add location positioning to "punch in", but what you didn’t expect is that this information may be false. Recently, some media exposed the news that "the lowest 10 yuan can modify the friend circle positioning service". According to the reporter’s investigation, some merchants on the e-commerce platform provide virtual positioning and photo service. Experts suggest that this kind of behavior not only has many security risks, but also may be suspected of breaking the law, so consumers should use it with caution.

　　10 yuan modifies the orientation of friends circle.

　　Buy software that can be used unlimited times.

　　The reporter searched on a well-known e-commerce platform and found that some sellers’ display pages read advertisements with the words "friends circle location", "anywhere in the world" and "pictures and videos are acceptable", while the prices for providing positioning modification services ranged from 10 yuan to 100 yuan, and some sellers sold nearly 2,000 copies a month. The reporter tried to place orders with multiple merchants and found that there are three main forms to modify the friend circle positioning service: single manual delivery, unlimited operation of software, and permanent use of hardware.

　　Among them, only 10 yuan and 20 yuan are needed for a single forwarding, and users need to edit the content of their friends circle first, and set it to "only visible to themselves" to tell the seller the required geographical location, and the seller will provide a QR code. After scanning, the user will allow the seller to remotely log in to his WeChat account and modify the location to post friends circle. A seller told reporters that after logging in, you can’t see the information column of the user’s friend list, but you can see all the circle of friends that the user posted before. Another seller directly asked the reporter for the account number and password to log in.

　　After the reporter raised security concerns, the seller recommended to buy plug-in software, which is more expensive, generally around 100 yuan. Users can download the APP and follow the tutorial sent by the seller, so they can modify the circle of friends indefinitely. At present, there are many such softwares on the market. In addition, users can also buy a hardware device like a charging head, which can directly change the position of the mobile phone by plugging it in, and then modify the positioning of any software on the mobile phone.

　　In addition to this virtual location service, some sellers also provide "high-end life photos of friends circle" materials, and play advertisements such as weekly updates and photos taken by professional photographers. It can be seen that the "fine decoration" of friends circle has now become a business.

　　The risk of privacy disclosure is high.

　　Sellers may be involved in "unfair competition"

　　Insiders pointed out that this kind of virtual positioning technology is not complicated, which is similar to providing a GPS sensor and changing the way for software to obtain location information from the GPS sensor that comes with the mobile phone. However, users will face great security risks, and service providers may also be suspected of committing crimes.

　　First of all, authorizing the seller to send a circle of friends will reveal personal privacy on the one hand, and on the other hand, the QR code with unknown sources is likely to read personal account information, causing property security risks.

　　In the investigation, the reporter found that some sellers also specifically indicated "for high-end Wechat business service". Party Xiaolin, a lawyer of Beijing Sanyou Intellectual Property Agency Co., Ltd., pointed out that Wechat business and purchasing groups are likely to be the main customer groups who pay for virtual location services. "There may be cases where the release is located abroad to prove that the goods sold are genuine foreign products, but in fact they are selling fakes and deceiving consumers."

　　Dang Xiaolin said that if the "high-end photos of life" and virtual positioning services provided by sellers on the e-commerce platform are used for commercial promotion and false publicity, it is suspected of violating the relevant provisions of the Anti-Unfair Competition Law of People’s Republic of China (PRC) and the Advertising Law of People’s Republic of China (PRC). Once it constitutes unfair competition or false publicity, service providers and Wechat business Daigou will face administrative penalties such as fines and civil liabilities such as stopping infringement and compensating losses.

　　Wechat response

　　Require the e-commerce platform to remove related services.

　　In this regard, WeChat Security Center issued a public response through Tencent Technology account on the 11th, saying that virtual positioning is a plug-in developed by group control technology, which is usually packaged as a "micro-marketing" artifact, and the use of plug-ins is a clear violation. In response, the WeChat team said that this plug-in software not only destroyed the ecological balance and normal operation of the WeChat platform, but also provided convenient conditions for malicious marketing behavior and caused harassment to normal users.

　　The WeChat team said that since the beginning of this year, WeChat has been strengthening the crackdown on WeChat plug-in software, focusing on governance, and has repeatedly publicized relevant crackdowns. For all accounts that have been complained by users and verified as using plug-ins, WeChat will impose penalties such as restricting functions (adding friends, greeting people nearby, etc.) and restricting login according to the relevant national laws and regulations, Tencent WeChat Software License and Service Agreement and WeChat Personal Account Usage Specification, and according to the degree of violation. For those who violate the rules for many times, the punishment will be aggravated.

　　In addition, the WeChat team also called on users not to use such plug-in services, and not to give their WeChat accounts, passwords and verification codes to strangers, so as not to bring many risks such as privacy and property security. According to Xinhua News Agency

　　() Financial Research Center on November 13th, some investors asked (), who are the first-generation and second-generation biodiesel customers of your company?

　　The company replied, Hello, one of the company’s main businesses is the production and sales of hydrocarbon-based biodiesel. The hydrocarbon-based biodiesel produced by the company can replace fossil-based diesel, and the carbon emission reduction rate can reach more than 80% compared with fossil-based diesel, which has the advantages of low carbon, cleanliness and environmental friendliness. The main customers of the company’s hydrocarbon-based biodiesel are large international energy suppliers and commodity traders. Thank you for your attention!

　　Biden can’t stop, and the world has to guard against it!

　　In order to boost the economy and compete with China, Biden has worked hard. No, not long after the $1.9 trillion COVID-19 bailout bill was passed, he wanted to build large-scale infrastructure, and it was $2.3 trillion at first.

　　However, the United States, the world’s largest "landlord", has no surplus food. Such a large sum of money can only be taken from the rich and enterprises in the United States, but how can the rich allow the new president to "operate on them"?

　　On April 1st, McConnell, the minority leader of the US Senate and a Republican, released malicious words to lead the Republican Party to fight to the end.

　　On April 1st, McConnell was interviewed by the media in Kentucky. Source: dailymail

　　But Biden has made up his mind and hopes that Congress will approve this $2.3 trillion infrastructure plan this summer. However, even if the cakes of the rich and enterprises are moved, this huge sum of money is still not enough.

　　Where did the rest of the money come from? More importantly, is this plan a revival or a trap for the United States and the world?

　　Want to bully the bow again?

　　After Biden announced his ambitious infrastructure plan, US stocks soared, and the S&P 500 index broke through the 4000 mark for the first time in history with the help of technology stocks.

　　But not everyone welcomes this new plan.

　　"Personally, I like Biden. I mean, we were friends for a long time." But this does not affect McConnell’s position on the infrastructure plan. After comparing Biden’s infrastructure plan to a "Trojan horse" with a hidden crisis, McConnell again rejected the new proposal of "old friends" on April 1. He said that the government did not get the authorization of voters, and then increased taxes on enterprises and the rich with annual incomes exceeding $400,000.

　　"My view on infrastructure is that we should build affordable infrastructure, instead of hitting the economy by substantially increasing taxes and not increasing the burden of national debt." McConnell said.

　　"There are huge differences between us, which makes it more and more difficult for us to reach a consensus." He said that Biden’s infrastructure plan will not be supported by any Republican senator. This means that if Biden wants to push the plan through, he must ensure that the Democratic senators are United enough and do not run for one vote.

　　Is it so yellow? Xu Mingqi, a distinguished researcher at Shanghai Institute of International Finance and Economics and vice chairman of Shanghai International Economic Exchange Center, believes that it is still possible for the Democratic Party to push the $2.3 trillion infrastructure plan through.

　　According to American media reports, it seems that the Democratic Party does not intend to bite the hard bone of the Republican Party. Instead, it plans to stage the scene of pushing the $1.9 trillion bailout bill again, start the legislative process of "budget coordination", bypass the Republican Party, and pass legislation by a simple majority.

　　Where did so much money come from?

　　Biden and the Democratic Party, who are eager to get the $2.3 trillion infrastructure plan approved this summer, have started the "I don’t listen, I don’t listen, I don’t listen" mode.

　　However, in addition to the Republican Party, there are also public opinions from all walks of life who question Biden.

Most Americans think that investing in infrastructure is right, but there are many disputes about the source and destination of funds. Source: GJ

　　Where the money comes from is a serious problem.

　　The Wall Street Journal shouted "Biden tax is coming". Although Biden did not specify whether the "annual income exceeding $400,000" was aimed at individuals or families, the commentary said that "the middle class in the United States will bear the largest tax increase since 1968".

　　Biden tax is coming. Source: wsj webpage screenshot

　　For American companies that have enjoyed the "welfare" of large-scale tax reduction since 2017, it is even more unacceptable to increase the federal corporate income tax rate from 21% to 28%, increase the minimum tax rate of overseas profits of American companies from 10.5% to 21%, and reduce the tax breaks enjoyed by fossil energy companies.

　　However, the tax increase is not enough to offset Biden’s self-proclaimed "unparalleled in the world" and "once in a generation" infrastructure costs. According to the calculation of Schneider, an analyst at Cornerstone Macro Consulting, the infrastructure plan will also lead to a cumulative increase of about 500 billion US dollars in the US fiscal deficit.

　　The federal government’s fiscal deficit, which has soared year after year, makes people worry about the risk of subprime mortgage crisis.

　　As long as "trillion" can recover?

　　"How did Biden become a president with a dollar sign ($)?" A commentary on the American political news network wrote, "But when all the money is spent, will anyone really feel the change?" Both the author of this article and the British newspaper The Guardian believe that Biden’s infrastructure plan may, in the end, be like the economic stimulus policy during the Obama administration. At first, he made lofty words with great ambition, but in the end, he "didn’t leave too many traces".

　　Of course, "change" will still happen, but it may not be the kind that Biden and Democrats want.

　　The American media pointed out that Biden’s new plan seems to create millions of jobs for the United States, but the substantially increased corporate tax rate will force enterprises to pass on costs.

　　At the same time, Americans themselves are not sure about the stimulus effect of infrastructure projects on the economy. Willcocks, who once led the domestic economic department of the Federal Reserve and served as a senior adviser to the chairman of the Federal Reserve, said that paying for infrastructure costs by "robbing the rich" would "greatly reduce the economic growth potential". Some economists believe that economic recovery in the post-epidemic era is a long process, and artificially stimulating the economy may lead to overheating, trigger a new round of inflation, and make consumer goods prices rise, the yield of long-term US government bonds rise, and even financial turmoil. In the end, ordinary Americans will be forced to pay for all the consequences.

　　Faced with these concerns, the Federal Reserve said that the government would effectively control the price increase, but former US Treasury Secretary Summers expressed doubts. In an interview with Bloomberg, he said that the hyperinflation experienced by the United States in the 1970s is no different.

　　Former us treasury secretary summers. Source: businessinsider

　　As for the impact of Biden’s "drastic measures" on the global economy after the $1.9 trillion rescue bill, Xu Mingqi said that due to the demand for infrastructure raw materials in the United States, it may play a certain role in pulling the global economy and promoting China’s export of related raw materials to the United States.

　　However, it is worth noting that inflation in the United States has started and negative economic effects have emerged, which will bring significant spillover effects and have a negative impact on the global economy.

　　Georgieva, managing director of the International Monetary Fund, recently warned that the accelerated economic recovery in the United States may lead to a rapid increase in interest rates, which will lead to a sharp tightening of the global financing environment and a large amount of international capital flowing out of emerging and developing economies. This will especially bring serious challenges to middle-income countries with huge external financing needs and high debt levels.

　　And global price increases will also be inevitable. The rising prices of oil, steel, nonferrous metals and other commodities will be transmitted to the downstream, which will lead to the general increase of household appliances and construction machinery, and the pressure of imported inflation faced by some economies will also increase.

　　This is not all. According to the US Political News Network, a $2 trillion money-throwing plan focusing on education and medical care is still on the way. Even so, some Democrats are still disgusted that the scale of money-throwing is not large enough.

　　Rep PraMilla Jayapal, a Democrat, thinks that the scale of the infrastructure plan should be even larger. Source: wsj

　　It seems that Biden can’t stop and the world has to guard against it.