As a leader in China's frozen food industry, Anjoy Foods Group Co.,Ltd. (603345.SH) has demonstrated fundamental stability despite its stock price undergoing adjustments after peaking in 2023. The company specializes in R&D, production, and sales of frozen prepared foods, frozen ready-to-cook dishes, and frozen rice/noodle products, boasting a diverse portfolio of over 500 SKUs and a nationwide distribution network centered in East China.
**Stabilizing Performance with Cross-Sector Expansion** For the first three quarters of 2025, revenue grew marginally by 2.7% YoY to RMB 11.4 billion, continuing a slowing trend. Net profit declined 9.35% to RMB 949 million, with non-GAAP net profit down 13.36%, attributed to rising costs of key ingredients (e.g., crayfish, surimi), fixed operating expenses, and asset impairment losses. Gross margin contracted by 3 percentage points due to: 1) Significant raw material cost inflation 2) Increased manufacturing overheads from facility upgrades 3) Strategic promotional spending to defend market share
Q3 standalone results showed improvement, with revenue up 6.61% (RMB 3.77 billion) and net profit growing 11.8%. Operating cash flow, however, dropped 32.58% to RMB 1.07 billion, reflecting inventory buildup pressures.
**Triple Growth Engines in a Thriving Sector** China's frozen food market, valued at RMB 221.2 billion in 2024 (second globally), is projected to grow at a 9.4% CAGR through 2029, driven by: - Rising restaurant chain penetration (currently half of mature markets) - Low per capita consumption (10kg vs. 62.2kg in U.S.)
Anjoy's three-pronged strategy covers: 1) **Frozen prepared foods** (9% market share, CR5 20%) - core products like hotpot ingredients 2) **Frozen rice/noodle products** (mature segment dominated by rivals) 3) **Ready-to-cook dishes** (16.1% CAGR projected) - prioritized growth area
The company executes a "hero SKU" approach, annually developing 3-5 star products (e.g., "Fresh Lock" hotpot series, shaomai). Its prepared food division combines in-house production ("Anjoy Kitchen"), OEM partnerships ("Mr. Frozen"), and M&A (crayfish processors) to capture market share. In 2024, 39 products exceeded RMB 100 million in sales, including four surpassing RMB 500 million.
**Capacity and Channel Synergies** With 12 production bases operating at 92.24% utilization (2022), Anjoy is transitioning from "produce where you sell" to "R&D and sell where you produce," enabling localized product development. Its omnichannel strategy spans: - Distributor networks (assisted with livestreaming setups) - Supermarket/O2O platforms - Foodservice clients (Haidilao, Yum China) - New retail (Hema, Dingdong)
Cost advantages allow aggressive promotions to gain market share while maintaining profitability. Recent strategic moves include: 1) **Dual listing**: July 2025 Hong Kong IPO to fund overseas expansion 2) **Frozen bakery foray**: Acquired Jiangsu Dingweilai (70%) and Dingyifeng (100%), redirecting RMB 361 million to bread production 3) **Product upgrades**: 2025 launch of premium "Meat Feast Sausage" line
**Insider Selling Raises Eyebrows** Following a 2023 control change (new controllers pledged 18-month no-sale), major shareholder Guoli Minsheng sold 5% (RMB 2.3 billion) pre-transition. Since 2018 lockup expiry, insiders have divested over RMB 6.2 billion collectively. While demonstrating operational resilience, Anjoy's shareholder dynamics warrant investor vigilance.
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