Fragrance is closely related to the lives of the general public, such as the addition of flavored cigarettes. In 1996, after Huabao Co., Ltd. (300741, SZ) entered the industry, it gradually expanded its production and sales of tobacco flavor products. In the past four years, the company's annual sales ranked first in the industry, and it was called “China's tobacco flavor king”. At present, Huabao's tobacco flavor business revenue accounts for more than 80% of the company's total revenue. Domestic provincial tobacco companies such as Yunnan Zhongyan, Zhejiang Zhongyan, and Hunan Zhongyan are all important customers.
In order to maintain its relationship with local tobacco companies, Huabao has established a joint venture with a number of local tobacco companies to produce tobacco flavors. However, even if it is deeply bound to a large number of large customers, Huabao shares are difficult to cover up in recent years.PerformanceAwkward. In 2014, the company's revenue was 3.2 billion yuan.Net profitIt was 1.553 billion yuan; by 2018, Huabao's revenue was 2.169 billion yuan, and the net profit for the same period was 1.176 billion yuan.
Net salesinterest rateHigher than Maotai
As a fragrance manufacturer, Huabao has a total of 31 subsidiaries at home and abroad, and its annual sales rank first in the industry in the past four years. Guangming, Huiyuan, Taitai Le, Jinyu and other enterprises are customers of Huabao, but tobacco companies such as Yunnan Zhongyan, Shanghai Tobacco, Guangdong Zhongyan, Shandong Zhongyan are the foundation of the company.
According to the prospectus of Huabao, as disclosed in June 2017, the top ten customers are all provincial-level Chinese tobacco companies. Among them, Yunnan Zhongyan is the company's largest customer for many years. In 2015 and 2016, Yunnan Zhongyan contributed 644 million yuan and 653 million yuan respectively to the company; in the first half of 2017, it contributed 259 million yuan in revenue. , accounting for 27.11% of total revenue.
In 2015, 2016 and the first half of 2017, Huabao's sales to tobacco companies were 2.281 billion yuan, 2.165 billion yuan and 774 million yuan, respectively, which accounted for 81.72%, 82.80% and 81.14% of total revenue respectively. %.
As we all know, tobacco is a typical monopoly industry, and it is not easy to become a supplier to domestic tobacco companies. How does Huabao Co., Ltd. hold up the “thigh” of major domestic tobacco companies in the ups and downs of the commercial seas for many years? One of the reasons or the benefit sharing mechanism between the two parties.
Huabao has established joint ventures with a number of important customers. For example, Yunnan Zhongyan, the largest customer of Huabao, indirectly holds 40% of the equity of Yunnan Tianhong Fragrance Co., Ltd. (hereinafter referred to as Yunnan Tianhong), a subsidiary of Huabao. Yunnan Tianhong has been stable and profitable. In the first half of 2018, the company achieved a net profit of 17.483 million yuan.
In addition, Shanghai Peony, the fourth largest customer of Huabao, which is a holding subsidiary of Shanghai Tobacco, also holds a 28% stake in Shanghai Danhua Xianghua Technology Co., Ltd. (hereinafter referred to as Shanghai Danhua), and the remaining 72% of the latter is China. Bao shares held. Shanghai Danhua has been stable and profitable in recent years.
An important customer of Huabao Co., Ltd. - Shandong Zhongyan indirectly holds a 30% stake in Qingdao Huabao Flavor Co., Ltd. (hereinafter referred to as Qingdao Huabao). Guangdong Zhongyan holds a 16.3% stake in Guangzhou Fanghua Cigar Flavor Co., Ltd. (hereinafter referred to as Guangzhou Fanghua). In the first half of 2018, Guangzhou Fanghua's net profit was 3.47 million yuan.
After "deeply binding" with several major tobacco giants, the benefits are also obvious. From 2014 to 2016 and the first half of 2017, Huabao and the above joint venturesshareholderThe total amount of related transactions between the tobacco giants (Yunnan Zhongyan, Shanghai Tobacco, etc.) was 1.36 billion yuan, 1.01 billion yuan, 980 million yuan and 350 million yuan respectively, accounting for 42.48%, 36.31% and 37.36% of the company's business income for the same period. And 36.36%.
Customer stable Huabao shares, in recent years Maointerest rateThe net interest rate has remained at a high level. From 2014 to 2018, the company's gross profit margin was 73.82%, 72.98%, 73.93%, 78.44% and 77.64% respectively. In the same period, the net sales margins were 50.68%, 49.4%, 48.84%, 53.08% and 55.03%, respectively. As of the end of the third quarter of 2018, Guizhou Moutai's net profit margin was only 50.86%.
"As far as I know, this phenomenon of equity cooperation with downstream tobacco giants is not uncommon in the tobacco supporting industry. Its purpose is also very simple, mainly to stabilize the company's important customers." A person close to Huabao shares "Daily Economic News" reporter said.
Revenue for four years
Even if it is backed by the tobacco giant, Huabao is still difficult to hide the decline in performance in recent years.
From 2015 to 2018, Huabao's revenues were 2.79 billion yuan, 2.61 billion yuan, 2.198 billion yuan and 2.169 billion yuan, down 13.02%, 6.33%, 15.96% and 1.3% respectively. The net profit for the same period was 13.27. 100 million yuan, 1.263 billion yuan, 1.148 billion yuan and 1.176 billion yuan, down 14.55%, 4.77%, 9.13% and 2.4% year-on-year respectively.
"In 2018, the company's net profit has increased." Huabao shares related sources told reporters. Indeed, in 2018, Huabao’s net profit increased slightly by 2.4%, but only 70% of its net profit in 2014. In 2014, Huabao's net profit was 1.553 billion yuan.
Why has Huabao's performance in recent years showed a general decline? A person close to Huabao shares told the reporter of "Daily Economic News" that this was mainly due to the divestiture of the tobacco raw materials business sector in July 2016. However, even if the impact of this part is removed, the overall business of Huabao will decline.
From the outside world, the performance mainly depends on the performance of Huabao's shares of the major Chinese tobacco giants, or by the decline of the downstream tobacco industry.
In recent years, the domestic tobacco industry has generally declined. In 2018, China's tobacco industry enterprises above designated size achieved a main business income of 929.12 billion yuan, a year-on-year increase of 4.9%. The total profit of the tobacco industry reached 92.35 billion yuan, down 4.6% year-on-year, falling for three consecutive years.
Previously, the "Healthy China 2030 Plan" clearly stated the specific targets for smoking bans and tobacco control, and required 20% of the current smoking population in China to be reduced to 20% by 2030. According to the population of 1.5 billion, it should be controlled below 300 million people. This will have a long-term impact on the development of the Chinese tobacco industry.
"The impact of the downstream tobacco industry on the company's performance is not easy to judge for the time being." Huabao shares told reporters that their personal judgments on the future performance of the company may be relatively stable and will not appear too volatile.
(Article source: Daily Economic News)