--- title: "The 'King' of snacks, Salted Fish! Market value shrinks by over 10 billion yuan" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/23101234.md" description: "The days of rapid growth for Yanjin Shop may be over. On August 8, Yanjin Shop disclosed its semi-annual report: revenue in the first half reached 2.459 billion yuan, a year-on-year increase of 29.84%; net profit was 319 million yuan, up 30.00% year-on-year. At first glance, these results seem decent, but that's not actually the case. Looking at the second quarter alone, Yanjin Shop's revenue was 1.236 billion yuan, with a growth rate of 23.44%; net profit was 158.9 million yuan, growing at 19.11%. From the data..." datetime: "2024-08-12T02:35:33.000Z" locales: - [en](https://longbridge.com/en/topics/23101234.md) - [zh-CN](https://longbridge.com/zh-CN/topics/23101234.md) - [zh-HK](https://longbridge.com/zh-HK/topics/23101234.md) author: "[侃见财经](https://longbridge.com/en/profiles/3206955.md)" generator: "portal-rs" --- # The 'King' of snacks, Salted Fish! Market value shrinks by over 10 billion yuan The days of rapid growth for Yanjin Shop may be over. On August 8, Yanjin Shop disclosed its semi-annual report: revenue for the first half of the year reached 2.459 billion yuan, a year-on-year increase of 29.84%; net profit was 319 million yuan, up 30.00% year-on-year. At first glance, these results seem decent, but in reality, they are not. Looking at the second quarter alone, Yanjin Shop achieved revenue of 1.236 billion yuan, with a growth rate of 23.44%; net profit was 158.9 million yuan, up 19.11% year-on-year. Although the second-quarter performance still shows double-digit growth, a longer-term perspective reveals that Yanjin Shop's net profit growth rate is the lowest in nearly 10 quarters. Compared to past growth rates of dozens or even hundreds of percent, Yanjin Shop's performance growth has clearly slowed down. Affected by its performance, Yanjin Shop's stock price has also performed poorly this year. As of the close on August 9, the stock price was 37.75 yuan per share. Although it has rebounded slightly, the year-to-date decline still stands at 22.26%. Compared to its peak of 74.35 yuan per share, the current price is nearly halved, with a market capitalization loss of 10 billion yuan. For Yanjin Shop, hitting a "growth bottleneck" is now an undeniable fact. The question worth pondering is—can Yanjin Shop break through this bottleneck and find new growth drivers? # **Trapped by Low-Cost Channels** The reason for Yanjin Shop's slowing growth can be summed up in one sentence: it's being "trapped" by its sales channels. Over the past few years, Yanjin Shop's performance has maintained strong growth—in 2022 and 2023, revenue growth rates were 26.83% and 201.47% and 72.83%, respectively. This high growth was largely due to its rapid entry into the budget snack market in 2021. According to media reports, Yanjin Shop began expanding into the budget snack channel in the second half of 2021, when the sector was rapidly rising. Per the "2023 China Budget Snack Industry Blue Paper," the number of budget snack stores nationwide surged from 2,500 at the end of 2021 to 25,000 in 2023—a 1,000% increase. Meanwhile, Snack Busy Group, a direct partner of Yanjin Shop, grew from 1,150 stores in 2021 to about 6,500 in 2023, a sixfold increase in two years. With the rapid rise of budget snack channels, they have now become Yanjin Shop's primary revenue source. Statistics show that from 2017 to 2023, the proportion of direct sales revenue dropped from 53.6% to 8.1%, while distribution channel revenue rose from 40% to 72%, and e-commerce revenue increased from 7% to 20%. However, budget snack channels are a double-edged sword. While driving revenue growth, they are also "eroding" Yanjin Shop's profits. Over time, the company's profit margins have steadily declined, with gross margins of 42.87%, 43.83%, 35.71%, 34.72%, and 33.54% from 2019 to 2023. Moreover, the focus of budget snack channels is low prices. As these channels account for an increasing share of sales, Yanjin Shop's gross margins may continue to fall. According to media reports, the company recently reduced the wholesale price of a certain quail egg product supplied to Snack Busy from 185 yuan to 158 yuan, while the retail price dropped from 23.5 yuan to 19.8 yuan—a reduction of about 15%. Of course, if budget snack channels could maintain the growth rates of the past two years, trading volume for lower prices might still work. But it's worth noting—the growth of budget snack channels may soon plateau. Media analysis predicts that the number of budget snack stores will exceed 30,000 by 2025. As mentioned earlier, there were about 25,000 stores in 2023, meaning only 5,000 new stores will be added in 2024 and 2025—a growth rate of less than 30%, significantly slower than during the peak period. There's no denying that partnering with budget snack stores was a smart move, helping Yanjin Shop enjoy two years of rapid growth. However, with the expansion phase of these stores nearing its end and the need to maintain low-price competitiveness, Yanjin Shop is now clearly "trapped" by these channels. # **When Will the Bottom Come?** Although growth has slowed, Yanjin Shop faces even greater challenges ahead. Why? Because as the budget channel 红利 fades, so does the 红利 of product diversification. As one of the few companies in the industry with its own production chain, product diversification has always been Yanjin Shop's strength. Previously, Chairman Zhang Xuewu proposed a "product leadership" strategy, emphasizing the development of sub-brands under the main Yanjin Shop brand to become a "snack brand incubator." Over the past two years, Yanjin Shop successfully launched viral hits like the "Big Devil" konjac snacks and "Egg King" quail egg products. The "Big Devil" line grew 120.32% in 2022, while "Egg King" surged 594.52% in 2023. In other words, product 红利 was a key driver of growth during those years. However, as of the first half of 2024, Yanjin Shop has yet to produce another hit like "Big Devil" or "Egg King." Additionally, the company's non-GAAP net profit showed negative growth in the first half of the year, partly due to these two products. According to disclosures, Yanjin Shop increased sales spending in Q2 to boost the brand presence of "Egg King" and "Big Devil" in B2B channels, squeezing profit margins. This is reflected in the numbers. As product 红利 wanes, sales expenses have risen sharply. The semi-annual report shows sales costs of 326.3 million yuan, up 37.15% year-on-year. In Q2 alone, sales expenses reached 167.2 million yuan, a 52.2 million increase (over 40%) compared to 115 million yuan in Q2 2023. For now, the fading 红利 of budget channels and product innovation make Yanjin Shop's future look particularly tough—after all, sales expenses have already surged as 红利 periods near their end. If 红利 disappears entirely, expenses may rise further, further eroding profits. Perhaps due to these concerns, Yanjin Shop's stock performance has been weak this year. As of August 9, shares closed at 37.75 yuan, still down 22.26% year-to-date. Compared to the peak of 74.35 yuan, the stock has nearly halved, wiping out 10 billion yuan in market value. ### Related Stocks - [002847.CN](https://longbridge.com/en/quote/002847.CN.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**