---
title: "A Battle Between Anjoy and Sanquan Is Inevitable! Who Is the Real King of Frozen Food?"
description: "The frozen food industry has developed since the 1970s, and frozen food has become an indispensable part of daily diet for urban Chinese consumers, gradually becoming one of the mainstream foods for families. With continuous advancements in production and processing technology, products are now diverse and meet various consumer needs. Amid this booming development, large-scale enterprises in the frozen food industry have attracted widespread attention, such as Sanquan Foods, the industry giant that developed China's first frozen tangyuan and zongzi, and Anjoy Foods, the leader in frozen hot pot ingredients."
author: "陈峰"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-09-18"
language: "en"
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# A Battle Between Anjoy and Sanquan Is Inevitable! Who Is the Real King of Frozen Food?

> The frozen food industry has developed since the 1970s, and frozen food has become an indispensable part of daily diet for urban Chinese consumers, gradually becoming one of the mainstream foods for families. With continuous advancements in production and processing technology, products are now diverse and meet various consumer needs. Amid this booming development, large-scale enterprises in the frozen food industry have attracted widespread attention, such as Sanquan Foods, the industry giant that developed China's first frozen tangyuan and zongzi, and Anjoy Foods, the leader in frozen hot pot ingredients.

The frozen food industry began developing in the 1970s, and now frozen food has become an indispensable part of the daily diet of urban Chinese consumers, gradually becoming one of the mainstream foods for families.
With the continuous development of production and processing technology in the freezing industry, today's products are more diverse and can meet various consumer needs.
At the same time, the booming development has brought large-scale enterprises in the frozen food industry into the spotlight. For example, Sanquan Foods, the industry giant that developed China's first frozen tangyuan and the first frozen zongzi; Anjoy Foods, the "boss" of frozen hot pot ingredients and prepared foods, and so on.
In the first half of this year, the sudden outbreak of the pandemic caught most consumer goods industries off guard, but the frozen food industry quickly saw its performance rise after a brief reaction. In particular, several leading listed companies saw their stock prices soar several times over, which made the already rapidly developing frozen food industry completely hot in recent years.
**-01-**
**Is a Battle Between the Two Inevitable?**
As the industry develops, the product categories of leading brands are increasingly overlapping, especially Anjoy and Sanquan, which are frequently mentioned together. This has led to a view in the industry: "A battle between Anjoy and Sanquan is inevitable!"
Why such a view? It should be noted that although these two frozen food giants are in the same industry, Sanquan is a leader in frozen flour and rice products, while Anjoy is the leader in frozen hot pot ingredients and prepared foods. The core product categories do not conflict seriously.
In fact, although the development paths in sub-categories differ, **as enterprises scale up, the boundary between frozen flour and rice products and frozen hot pot balls is becoming increasingly blurred, and the trend of industry integration is becoming more prominent.**
Under this trend, the product categories of both sides have already overlapped. Anjoy has long been developing flour and rice products, calling itself the "dual leader in frozen hot pot ingredients and leavened flour products." Sanquan is not to be outdone, recently launching its new business "Sanquan Shuan Shao Hui" in the hot pot and barbecue categories where Anjoy holds a dominant position, making a frontal attack.
Therefore, "A battle between Anjoy and Sanquan is inevitable!" is already in progress. Since Anjoy and Sanquan are now in direct confrontation, who will win this competition?
**-02-**
**Performance Victory or Market Value as "King"?**
**Let's start with the data.
More than half of 2020 has passed, and the semi-annual reports of major listed companies have been released one after another. On the evening of August 19, Anjoy Foods and Sanquan Foods successively announced their semi-annual results:
Sanquan Foods achieved operating revenue of 3.73 billion yuan in the first half of 2020, a year-on-year increase of 22.60%; net profit attributable to shareholders of the listed company was 452 million yuan, a year-on-year increase of 409.61%.
Anjoy Foods' operating revenue in the first half of 2020 was approximately 2.853 billion yuan, a year-on-year increase of 22.14%; net profit attributable to shareholders of the listed company was approximately 260 million yuan, a year-on-year increase of 57.36%.
As of now, Sanquan's market value is 28.4 billion yuan, while Anjoy's market value has reached 41.4 billion yuan.
**From the semi-annual reports, the revenue growth rates of both sides are basically flat, but Sanquan is slightly ahead in revenue, and its profitability is more outstanding, with a significant increase in growth rate.**
From a performance perspective, Sanquan is undoubtedly the current "number one" in frozen food, but in terms of market value, Anjoy clearly surpasses Sanquan by a large margin. Why is this?
Although the current data is like this, the performance and market value in the first half of 2020 are closely related to the sudden pandemic. Therefore, the editor believes that the performance data of the frozen food industry in the first half of this year is not representative.
Why? Let's look at the changes in stock prices of various companies over the past six months. Anjoy's stock price surged from a low of 51.47 yuan in February to today's 175.26 yuan; Sanquan also rose from a low of 13.5 yuan in February to today's 35.5 yuan.
In addition to these two, other listed frozen food companies such as Haixin Foods and Huifa Foods saw their stock prices soar to about three times their February levels.
It can be seen that this wave of market conditions was greatly affected by the pandemic. As a special event, no matter how great its impact on the industry, it will eventually pass. Therefore, looking at the performance and stock market value of the first half of the year may be biased, but it also shows that the capital market currently seems to favor Anjoy.
Since the first half of the year's performance is not a good basis for judging the strength of the two, let's turn back time. Can the performance of the two before 2019 confirm some conjectures?
Comparison of revenue over the past five years, with Sanquan Foods above and Anjoy Foods below
Comparison of net profit over the past five years
From the performance of the past five years, Sanquan Foods' operating revenue is higher than Anjoy Foods, but in absolute terms, the gap is getting smaller: in 2015, the gap was 1.68 billion yuan, and in 2019, it was 720 million yuan; in terms of net profit, Sanquan Foods is lower than Anjoy Foods.
It can be seen that **in terms of profitability, Sanquan has not matched Anjoy in the past five years. However, comparing gross margins, Sanquan Foods has a higher gross margin, so the difference in net margin is mainly due to the impact of period expenses.**
In general, **Sanquan currently holds a scale advantage, but Anjoy has not fallen too far behind and is growing faster; profitability also surpasses Sanquan; the capital market also favors Anjoy; therefore, Anjoy seems to have the momentum of the industry's "number one."**
**-03-**
**Sanquan Deepens Catering and E-commerce Layout; Anjoy's Development Limited by Capacity?**
**Why does Sanquan have higher revenue but a lower net profit margin than Anjoy? After channel adjustments and deepening its catering and e-commerce business, can Sanquan maintain its scale advantage? What constraints lie behind Anjoy's rapid growth?
Below, we will examine the opportunities and problems faced by the two in future development from an operational perspective.
**2C Not as Good as 2B?**
First is the issue of profit margin. Sanquan has an advantage in revenue scale and a higher gross margin than Anjoy. According to general market rules, the leader should also be top-notch in profitability, so why has Sanquan's net profit always been lower than Anjoy's?
The editor speculates that the main reason lies in the sales model.
It is understood that Sanquan Foods' sales channels are mainly concentrated in supermarkets (about 70%), meaning it mainly faces the C-end. 2C channels require higher market investment costs, including new product entry fees, promotional advertising fees, etc. **Excessive costs consume Sanquan's high gross margin, leading to lower profitability than Anjoy.**
In contrast, Anjoy's sales channels are mainly catering distribution, supplemented by supermarkets and e-commerce. Among them, the sales model is mainly dealer-based, accounting for 86%. In 2019, the number of dealers increased by 10.4% year-on-year to 682. Compared with the 2C model, **Anjoy, which relies mainly on dealers, spends far less on advertising and entry fees than Sanquan.**
In response to this situation, Sanquan has also made adjustments, **deepening its layout in catering channels and e-commerce channels (including home delivery e-commerce, community group buying, etc.) in recent years.**
Compared with previous years, the proportion of sales from catering and e-commerce channels is indeed expanding, and the revenue growth rate is also quite high. Taking catering as an example, in 2019, Sanquan's revenue in the catering market was 784 million yuan, a year-on-year increase of 40.45%; net profit was 53.2615 million yuan, a year-on-year increase of 43.86%.
Anjoy is also making changes. In its 2019 annual report, it stated that **its channel strategy has shifted from "catering distribution as the main, supermarkets and e-commerce as supplementary" to "balancing B and C ends, dual-wheel drive," increasing channel development in supermarkets, community e-commerce, and e-commerce, further enhancing the strategic position of C-end channels.**
It can be seen that **the two are not only constantly colliding in product categories, but also making their own moves in channels, with the purpose of seizing market opportunities in the process of increasing industry concentration.** As for the pros and cons of 2C and 2B channels, it is not absolute. **Sanquan has gained household brand awareness through years of 2C operations, which Anjoy, focusing on 2B channels, does not have.**
**Is Anjoy's Capacity Limiting Its Development?**
In the process of rapid development, enterprises need capacity support. In terms of total capacity of the two, in 2019, Sanquan's total output was 626,500 tons, with inventory of 197,000 tons; Anjoy's total output was 513,400 tons, but capacity utilization had already reached 116%.
With this momentum, if Anjoy wants to maintain rapid growth, it must first solve the capacity problem to get rid of restrictions. In contrast, Sanquan does not need to worry about capacity, as it has production bases across the country, with a relatively balanced distribution of capacity and marketing networks. In this regard, Sanquan seems to have a certain advantage.
In addition, in terms of **cold chain, Anjoy entrusts all to third parties, while Sanquan's branch logistics has 70% of its own vehicles,** which gives Sanquan better bargaining power in this regard.
In response to capacity constraints, Anjoy has actually been prepared for a long time, as its capacity utilization has been above 100% since 2015. Therefore, it has also invested a lot of resources in building new production bases. Currently, there is abundant capacity under construction, with 7 major production bases nationwide. At that time, it will not only solve the limitation of capacity on enterprise development but also further reduce logistics costs for Anjoy.
In the process of mutual penetration and development in product categories, channels, and other aspects, both sides have realized the importance of brand building. Anjoy has gradually increased its brand promotion efforts, starting to promote in various channels. Sanquan continues its brand building approach, increasing investment in various platforms and offline advertising to continuously enhance brand awareness.
In the annual reports of both companies, we can see the determination of both sides to learn from each other's strengths and penetrate each other's fields. Therefore, the competition between the two will become more intense in the future, and both giants have their own advantages and confidence.
It is still too early to determine who will be the "number one" in frozen food in the future.
Sanquan's advantage lies in its leading brand building. Its years of 2C model and brand accumulation give it a grasp of consumer demand changes and core supply chain resources, and it also has a certain lead in capacity. In recent years, it has made efforts in omni-channel development and diversified product innovation.
For example, it has launched new products such as private kitchen "super seafood" dumplings, colorful dessert tangyuan, and children's shrimp dumplings; it has also added several product categories for the catering market and fresh food sector.
Anjoy, on the other hand, has a strong dealer channel and holds an absolute advantage in the catering market. It has also seen the industry's high-end trend and timely launched mid-to-high-end products such as "fresh-lock packaging" and "three big balls," using its huge sales channel advantage to quickly seize the industry's high ground and promote sustainable development.
In the post-pandemic era, with strong support from both the demand and supply sides, China's frozen food industry has great potential and development space. For frozen food enterprises, enriching their product lines to broaden consumption scenarios, improving R&D and innovation capabilities to meet new user needs, and integrating the industrial chain to maximize benefits will become future priorities.
To truly win over consumers, both Sanquan and Anjoy must continue to expand online and offline channels, establish differentiated competitive advantages, build brand image, and enhance product premium capabilities.
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