Want Want's net income declines to force drinks

In the same way as the market performance in the first half of last year, Wangwang failed to deliver a satisfactory report card last year. The company's performance announced yesterday showed that the annual revenue was 3.427 billion yuan, down 9.2% year-on-year, and the equity holder’s attributable profit was 542 million yuan, down 12.9% year-on-year. The decline in both revenue and net profit has brought new challenges to the business layout of Want Want 2016.

Want Want currently has three major business segments: rice crackers, dairy products, beverages, and snack foods. Dairy products and beverages account for the largest share, accounting for 50% of the 2015 revenue. For last year's decline in operating income and net profit, Want Want said it was adversely affected by the performance of dairy products and beverages and ice products, which led to a decline in performance. Looking at the business segment, only Wanggo's revenue and operating profit rose from 3% to 14% in the three major business segments last year, while the revenue from dairy products, beverages, and snack foods fell by 14% and 11% respectively. Operating profit fell by 5% and 14% respectively. The performance of the three major business segments contrasts sharply with the decline in the performance of the rice fruit business segment in the two years before Wangwang.

Due to the lack of growth of rice cracker products in recent years, Wangwang has embarked on a diversified road, focusing on beverages, dairy products, snack foods, etc., launching a series of new products such as instant noodles, infant food supplements, and fresh food product circulation, which also tastes It was a bit of a big pie and no focus. For a diversified strategy, Wangwang also highlighted in its announcement yesterday: “There are many categories of products in the Group. In the past, many new products were developed because they missed the opportunity.”

The industry believes that the layout of the Want Want business segment is particularly important at the same time as both earnings and profits decline. In early March, Wangwang held a new beverage conference and stated that in 2016, it will focus on five markets, namely light, juice, herbs, coffee and energy. At present, beverages have already accounted for half of Wangwang’s revenue. The industry believes that Want Want can use its strength in the category of beverages to make it stronger. However, the new category also has new challenges, whether it is light or juice drinks, there are giants entrenched, from the giant "mouth" snatch food more test the product development, marketing capabilities Want want.