Last night, Haitian Weiye, the leading condiment company in the industry, often dubbed 'Sauce Maotai', released its 2024 annual report, showing growth in both revenue and net profit, delivering a performance that 'stops the decline and rebounds'. According to the financial report, Haitian Weiye's 2024 revenue was 26.901 billion yuan, up 9.53% year-on-year; net profit attributable to shareholders was 6.344 billion yuan, up 12.75%, returning to a growth trajectory. Additionally, net assets attributable to shareholders of the listed company were 30.895 billion yuan, up 8.29% year-on-year; overall net profit margin was 23.63%, an increase of 0.65 percentage points from the previous year. Image source: Haitian Weiye financial report (screenshot) Returning to Growth: How Did Haitian 'Stabilize'? Before 2020, Haitian maintained high growth of over 20%. Since 2021, growth has continued to decline. In 2022, affected by the 'double standard' incident, net profit saw its first negative growth. In 2023, revenue and net profit declines widened to 4.1% and 9.27% respectively. It wasn't until 2024 that growth improved. However, Haitian's 9.53% revenue growth still exceeds the industry average of 5%-7%, maintaining its leading position. From the 2024 product sales data, traditional soy sauce and oyster sauce remain the mainstays. Soy sauce sales reached 13.758 billion yuan, up 8.87% year-on-year, consolidating its market-leading position in the soy sauce category; sauce sales were 2.669 billion yuan, up 9.97%; oyster sauce sales were 4.615 billion yuan, up 8.56%, hitting a record high. According to market trends, demand for healthy condiments such as low-salt and zero-additive products continues to grow, and Haitian Weiye is increasing its presence in this area. The market is nearing saturation, and the past dividend period has ended. Consumer demand is shifting from basic condiments to healthy, convenient, and multifunctional options. Growth in the condiment market now relies more on consumption upgrades, product innovation, and brand influence. Online Growth 39.78%, Offline Growth 8.93% Dealer Numbers Return to Growth In 2024, Haitian Weiye's online channel revenue was 1.243 billion yuan, up 39.78% year-on-year, while offline revenue was 23.885 billion yuan, up 8.93%. It's clear that online growth far exceeds offline, with significant growth in e-commerce, new retail, and community group buying. However, it's worth noting: on one hand, online channels have higher promotion and traffic costs, often leading to lower gross margins than offline; on the other hand, consumers have lower loyalty when buying condiments online, making them susceptible to price wars. In the long run, how to maintain online growth while improving profit margins is a question Haitian needs to consider. Secondly, in offline channels, Haitian's dealer count increased by 116 in 2024, reaching 6,707, ending a three-year decline. This indicates Haitian is returning to expansion and will manage and optimize offline channels more finely.
Haitian Weiye's Channel Refinement: A 'New Test' for Dealers
The report shows that over 91% of Haitian Weiye's revenue comes from dealer channels, reflecting its strong distribution system. However, in past market visits, the author learned that Haitian has made several adjustments in channel management, such as raising inventory management requirements and refining agency rights. The essence of these changes is the fine-tuning of the dealership model in the process of optimizing the supply chain and improving market coverage efficiency. But for some dealers, this also means changes in business models and increased challenges. First, the company has adjusted its strategy in supply chain optimization and market share stability, raising supply requirements. The intention is to optimize market supply rhythm and ensure terminal coverage, but it has also extended some dealers' capital turnover cycles, increasing cash flow pressure, especially when market growth slows, making inventory buildup a concern. Second, the agency model is being refined, and market structure is adjusting. Traditionally, Haitian's agency model was based on regional divisions, but in recent years, the company has gradually promoted channel and product line segmentation to increase market penetration and terminal control. Channel segmentation: Different channels within a region (such as supermarkets, catering) are now handled by different dealers, diluting the market share of original full-channel agents. Product line segmentation: Some regions have begun to allocate agency rights by product series, such as soy sauce, oyster sauce, and compound condiments being handled by different dealers. For original large dealers, market control has decreased and competition has intensified, while for new dealers, it means more market opportunities but also requires more refined channel operation capabilities. One dealer said: 'Previously, we could cover all Haitian products in the entire region. Now, different categories and channels have dedicated agents, making market division more detailed and competition fiercer.' New Leader Cheng Xue Pushes for Hong Kong Listing Since September 2024, when Pang Kang stepped back, Cheng Xue, known as the 'Soy Sauce Queen', who previously served as corporate planning director, vice president, executive president, and director, took over as chairman. Announcing the Hong Kong listing was Cheng Xue's first major move after taking office. In December 2024, Haitian Weiye announced plans to issue H shares and list on the Main Board of the Hong Kong Stock Exchange. According to reports, Haitian Weiye has commissioned three major international investment banks, including CICC, Goldman Sachs, and Morgan Stanley, for its second listing plan, with expected fundraising of up to $1.5 billion (approximately 10.9 billion yuan). On January 13 this year, Haitian Weiye submitted its listing application to the Hong Kong Stock Exchange, and on February 20, the China Securities Regulatory Commission accepted its filing materials. To date, Haitian Weiye's products are sold in over 90 countries and regions worldwide, but overseas sales still account for a relatively low proportion. Therefore, the Hong Kong listing is intended to 'further advance the globalization strategy and enhance the international brand image and comprehensive competitiveness.' Final Thoughts From the 2024 financial report, Haitian Weiye has not returned to its peak growth rate but still maintains its industry-leading position. The rapid growth of its online channels, market recognition of health-oriented products, and refined channel operations are all important supports for its performance growth. Growth has returned, but challenges remain in the face of market saturation, intensified competition, and rising costs. Haitian's next steps are worth watching for the industry.