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ProduceSeagamessoccersingaporeResearch Institute of Sina Finance listed companies
Author: wave Diet / Hao Xian
In the continuous decline in performanceSeagamessoccersingaporeAgainst the backdrop, Laifen launched the second phase of the employee stock ownership plan, which intends to grant shares to no more than 230 employees.
The award comes from previous buybacks. From August 2023 to February 2024, Laifen paid an average price of 12%.Seagamessoccersingapore.75 yuan per share buyback 274SeagamessoccersingaporeAt present, the share price has fallen to about 10 yuan.
It is worth mentioning that while the company buys back, the controlling shareholders are reducing their holdings. Laifen issued an announcement in May 2023 that the controlling shareholder intends to reduce its stake by no more than 3% in the next six months. On March 28 this year, the management of house-loving companies received a fine from the Securities and Futures Commission for excessive proportion reduction. According to the announcement, on May 22, 2023, the shareholding reduction of Love Housing Enterprises reached 5%, far exceeding the upper limit of the previous announcement. The Securities Regulatory Commission ordered the management of Love House to buy back the shares sold in excess of the proportion.
The sharp decline in net profit of Laiyi began in 2018 and began to reduce its holdings in 2019. At present, Ifen has entered a stage of sharp decline in revenue, can the employee stock ownership plan save the company's performance?
Laifen's revenue continues to decline, and direct stores are still shrinking.
Since 2023, Yifen achieved operating income of 3.977 billion yuan, a decrease of 9.25% over the same period last year, a net profit of 57.0454 million yuan, a decrease of 44.09% over the same period last year, and a deduction of 11.6962 million yuan for non-net profit, a decrease of 80.43% over the same period last year.
This is the first decline in revenue since 2014, and in its annual report, the company explained that the decline in ecommerce sales was mainly due to a decline in group buying revenue from specific channels and strategic tuning of some online ecommerce businesses.
The special canal is mainly group purchase income, which has been greatly developed due to the influence of supply factors during the epidemic, and is now gradually decreasing. E-commerce, which has been vigorously promoted by the company, has been facing sluggish growth in recent years and is in a state of loss. After adjustment, the e-commerce track changed from self-operation and agent operation mode to distribution mode, and achieved a turnround through contraction and transformation.
Last year, revenue from special channels and e-commerce fell by 38.54% and 34.58% respectively, totaling 543 million yuan, down from 19% in the previous year to 14%, and the contribution of income decreased significantly.
Laiyifen's main business is leisure snacks, and its income mainly comes from direct stores and franchisee channels, which continues to shrink is the main reason for the company's revenue decline.
Laiyifen has previously been dominated by direct stores, with revenue of 3.056 billion yuan in 2019, accounting for 98.86% of the revenue. After a continuous decline, income now accounts for about 65%. Last year, the revenue of direct stores was 2.57 billion yuan, down 6.41% from the same period last year, and the number of direct stores decreased by 10% to 1910. The downward trend continues.
Direct stores in Ifen came to a standstill as early as around 2017, and the growth in the number of stores could not drive revenue growth. Around 2017, the company put forward a "million lights" plan to expand franchise stores to drive growth.
Last year, revenue from franchise channels increased by 14.29% to 731 million yuan, while franchise stores increased by 48% to 1775. Franchise stores account for 48% of the total, but revenue accounts for only 18%. And due to the rapid expansion, the revenue of the franchise store fell by 3.81%. If we simply calculate the business income and the number of stores, the revenue of joining stores in 2023 will be 411900 yuan, 16300 yuan less than in 2022.
At present, the biggest problem facing Laifen is that direct stores, the core source of revenue, continue to shrink, while franchise stores that have high hopes for a relatively small share of revenue in recent years will not be able to drive the company's growth in the short term.
In the first quarter of 2024, Laiyi's revenue continued to decline by 12.47%, and it is estimated that the main business has not stopped bleeding.
The "abnormally high" expense rate
Another problem troubling Laifen is that the net interest rate is too low. From 2018 to 2021, the company's net interest rate has been below 1%, and the non-net interest rate has been negative. The net interest rate rose to 2.33% in 2022 and fell again to 1.56% in 2023.
The main reason for the low net interest rate is the high expense rate. In 2021, for example, the sales expense rate reached 32.53%, the management expense rate reached 11.63%, and the financial expense rate reached 0.45%, the total of the three reached nearly 45%. In that year, the company's gross profit margin was only 43.54%, and the net profit rate was-1.57%. It is in a state of deducting non-loss.
Compared with companies in the same industry, the cost rate of Laiyi is obviously "abnormally high". In 2023, the median rate of sales expenses of 10 leisure snack enterprises in A shares was 12.37%, and that of Laifei was as high as 27.92%. The median rate of management expenses is 6.03%, while that of Laifei is 13.31%.
Generally speaking, the direct operation model will produce a higher sales expense rate, which has been more than 30% since 2017, but with the small decline in the proportion of direct stores' revenue, the company's sales expense rate has not dropped significantly. It has been maintained at more than 27% in the past two years. At the same time, the management expense rate of Laifei is also relatively high, approaching 10% in 2017. With the decline of the sales expense rate in recent years, the management expense rate has continued to increase, reaching 13.31% in 2023.
There are two reasons for the abnormally high expense rate of Laifei. On the one hand, because the company is mainly in direct operation mode, and at the same time, it has been expanding in recent years, in the process of franchise expansion, it is necessary to increase advertising and increase preferential treatment to franchisees; on the other hand, it is also because of the low operating efficiency of the company, in 2023 A-share 10 leisure snack listed companies, Laifen per capita income of 756700 yuan, ranking third from the bottom. Yanjin Shop, negotiation Food and other companies are about 1 million yuan, much higher than Laifei.
In this state, Laifen has been under the pressure of loss. Non-losses will be deducted for four consecutive years from 2018 to 2021, and profits will be maintained by non-recurring profits and losses. The company's non-recurrent profit and loss mainly comes from government subsidies and net investment income, among which the investment income fluctuates greatly. The net investment income was as high as 77.35 million yuan in 2021 and changed to-2.15 million in 2023, which is also an important reason for the great decline in net profit last year.
It is worth noting that with the change in the income structure, the gross profit margin of Laiyi is also declining, with the gross margin above 44% before 2017, falling to 43.13% by 2022 and further to 42.23% in 20323. In 2023, the gross profit margin of Yifen stores is about 50%, that of franchise stores is about 20%, and that of Tequ and e-commerce is 27% and 25% respectively.
In the future, if franchise revenue expands and direct sales revenue continues to shrink, the company's overall gross profit margin will decline. If Laiyifen cannot reduce the expense ratio as the income structure changes, net profit will inevitably continue to be under pressure.
