On August 29th, Bestore Co.,Ltd.'s stock price continued its decline, closing at 13.21 yuan per share, down 1.05%.
From equity transfer disputes to the "peanuts growing on trees" controversy, and now to significant first-half performance declines, the leading snack company Bestore has been facing mounting challenges recently.
**First Half Loss Approaches 100 Million Yuan**
Bestore recently released its first-half performance report. The financial results show that in the first half of the year, Bestore achieved revenue of 2.829 billion yuan, down 27.21% year-on-year; net profit attributable to shareholders was -93.5531 million yuan, declining 491.59% year-on-year; adjusted net profit attributable to shareholders was -119 million yuan, plummeting 1,694.33% year-on-year; total profit was -111 million yuan, down 312.6% year-on-year.
Regarding these results, Bestore stated in its financial report that the decline in adjusted net profit was due to several factors. On one hand, the company continued to optimize and adjust its products, with price reductions on some products and product mix adjustments affecting the company's gross margin. On the other hand, since 2024, the company has been continuously optimizing its store structure, proactively eliminating underperforming stores, leading to decreased sales scale as store numbers declined. Additionally, rising traffic costs in online channels contributed to the year-on-year decline in both sales scale and net profit.
The decline in total profit and net profit attributable to shareholders was also affected by a decrease of approximately 11 million yuan in interest income and wealth management returns compared to the same period last year, plus a reduction of about 19 million yuan in government subsidies received.
By business segment, in the first half of this year, Bestore's e-commerce channel revenue was 1.156 billion yuan, down approximately 29% year-on-year; franchise channel revenue was 683 million yuan, declining significantly by 33.37% year-on-year; direct sales channel revenue was 726 million yuan, down 23.5% year-on-year.
It's worth noting that in 2023, Bestore implemented its largest price reduction strategy in 17 years, with over 300 products seeing an average price cut of 22%, with maximum reductions reaching 45%. In 2024, the company continued its "lower prices, not lower quality" strategy and launched the "Natural Healthy New Snacks" brand proposition.
**"Peanuts Growing on Trees" Incident Sparks Controversy**
Alongside the company's half-year report, Bestore's "peanuts growing on trees" promotional poster also drew attention.
Recently, internet users discovered that on Bestore's e-commerce platform, the product detail page for a "Four Red Peanuts" item contained a poster with a basic scientific error. Peanuts, as crops that flower above ground but fruit below ground, should have their fruits formed and mature in soil. However, the poster depicted peanuts hanging from tree branches, which contradicts their actual growth pattern.
Bestore subsequently responded, stating that due to work oversight, the company incorrectly used AI-generated image materials on the e-commerce platform's product detail pages, causing unnecessary misunderstanding and discussion. The company expressed sincere apologies to all friends who care about and support the company.
"After discovering the problem, we immediately updated and corrected the relevant pages and have initiated a comprehensive scientific accuracy review of all product promotional materials. Meanwhile, we are further upgrading our content review mechanisms and optimizing internal management processes to ensure that all future content output is more rigorous and reliable," Bestore stated.
A senior researcher commented that the "peanuts growing on trees" incident exposed loopholes in Bestore's advertising review mechanisms and management processes. The company's use of AI-generated images without strict review, leading to basic factual errors, indicates inadequate internal management and poor control over advertising content.
**Equity Transfer Still Faces Uncertainties**
Bestore has also recently attracted attention due to equity transfer events.
On the evening of July 17th, Bestore announced that the company would introduce Changjiang International Trade (Wuhan State-owned Assets) as a strategic investor. The company's major shareholder Ningbo Hanyi and its concert party Liangpin Investment planned to transfer a total of 84.21 million shares of Bestore to Changjiang International Trade through agreement, representing 21% of the company's total shares. After the equity transfer completion, the company's actual controller would become Wuhan Municipal State-owned Assets Supervision and Administration Commission, with the founder becoming the company's second-largest shareholder.
However, Guangzhou Light Industry (Guangzhou State-owned Assets), which had previously been in contact with Ningbo Hanyi, filed a lawsuit against Ningbo Hanyi over the equity transfer dispute and applied for property preservation, freezing approximately 79.764 million shares held by Ningbo Hanyi. Recently, Guangzhou Light Industry's lawsuit amount against Ningbo Hanyi escalated to 1.023 billion yuan, which the industry interprets as an escalation in the dispute over Bestore's equity transfer.
The aforementioned share freezing and litigation matters may create uncertainty risks for the control transfer between Ningbo Hanyi and Changjiang International Trade. Bestore's equity transfer matters still face significant variables.
An industry analyst believes that with intense competition in the current snack industry, Bestore faces pressure in market expansion and product innovation, with increasing operating costs and net profit decline far exceeding industry peers. Fortunately, Bestore still maintains a certain brand foundation and market share in the leisure snack sector, and should continue to focus on product innovation and market expansion in the future.
A securities research report noted that Bestore launched its "Natural Healthy New Snacks" brand proposition in 2024, but due to pricing and brand positioning adjustments, the company's profits came under pressure. Meanwhile, the company continues to explore and optimize store models, reducing costs and increasing efficiency through supply chain improvements to adapt to its development strategy, increasing supplier scale to reduce costs. From a long-term perspective, Bestore's new positioning and supply chain optimization are expected to help drive the company's sales growth.
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