---
title: "Want Want Loses Its Edge: Market Value Evaporates by 100 Billion HKD as Taiwanese Enterprises Face Collective Crisis"
description: "Since early 2015, China Want Want (0151.HK) has repurchased its shares 101 times, spending over 3 billion HKD, yet its market value has fallen from a peak of over 170 billion HKD in 2014 to around 60 billion HKD. Along with other Taiwanese-backed giants like Master Kong and Sun Art Retail, Want Want is facing declining performance and shrinking market value, signaling a collective crisis for Taiwanese enterprises in mainland China."
author: "面包财经"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2016-11-09"
language: "en"
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# Want Want Loses Its Edge: Market Value Evaporates by 100 Billion HKD as Taiwanese Enterprises Face Collective Crisis

> Since early 2015, China Want Want (0151.HK) has repurchased its shares 101 times, spending over 3 billion HKD, yet its market value has fallen from a peak of over 170 billion HKD in 2014 to around 60 billion HKD. Along with other Taiwanese-backed giants like Master Kong and Sun Art Retail, Want Want is facing declining performance and shrinking market value, signaling a collective crisis for Taiwanese enterprises in mainland China.

101 times.
From the beginning of 2015 to last weekend, China Want Want (0151.HK), listed on the Hong Kong main board, has repurchased its shares 101 times in the secondary market, spending a cumulative total of over 3 billion HKD. Both the number of repurchases and the amount involved rank among the top in the Hong Kong market. However, the continuous buybacks have not stopped the decline of Want Want's share price. In November, the total market value of China Want Want hovered around 60 billion HKD, having evaporated over 100 billion HKD from its peak in 2014.
Like many Taiwanese-backed retail and consumer goods giants such as Master Kong and Sun Art Retail, Want Want is currently under the dual pressure of declining performance and shrinking market value. As time passes, these Taiwanese giants, which once enjoyed favorable timing, geographical advantage, and popular support, seem to be collectively facing difficulties.
**Favorable Timing, Geographical Advantage, and Popular Support: Want Want Builds a 100-Billion Snack Empire Relying on the Mainland Market**
China Want Want originated in Yilan, Taiwan, and officially invested in the mainland market in 1992, becoming one of the earliest Taiwanese companies to register trademarks in mainland China.
Like other Taiwanese consumer brands that entered the mainland market earlier, such as Master Kong and Uni-President, Want Want caught the wave of the mainland consumer market explosion that lasted for 20 years starting in the early 1990s. By 2004, its revenue exceeded 4 billion RMB, just over a decade after entering the mainland market.
In 2008, China Want Want was listed on the Hong Kong main board, forming a "three places across two shores" model with major shareholders in Taiwan, market in mainland China, and listing in Hong Kong. In fact, this is a typical structure for many Taiwanese giants: Master Kong, Uni-President, Sun Art Retail (parent of RT-Mart), and even FIH Mobile (a subsidiary of Foxconn) all adopt this model.
For a long time, this model could be said to have occupied favorable timing, geographical advantage, and popular support. Taiwanese enterprises' once-leading management and operational levels, the convenient financing channels of the Hong Kong capital market, and the vast mainland market combined to allow Taiwanese giants to rapidly expand and create wealth myths. In addition, Taiwanese enterprises also enjoyed various "investment attraction" preferential policies and overt or covert support in many places.
Financial report data shows that from 2004 to 2013, China Want Want's revenue and net profit both grew more than sixfold. At its peak in 2013, revenue exceeded 23 billion RMB and net profit exceeded 4 billion RMB. The following chart, drawn by Bread Finance based on financial report data, shows the trends in China Want Want's revenue and net profit:
Nominally, Want Want also has overseas markets, but mainland China contributes almost all of its revenue and profit. From 2004 to the first half of 2016, China Want Want's revenue from mainland China totaled over 170 billion RMB, accounting for more than 97% of its total revenue.
After listing on the Hong Kong Stock Exchange, Want Want's share price once showed a strong upward trend. From 2008 to 2014, its total market value rose from a low of less than 30 billion HKD to a peak of over 170 billion HKD, making it one of the consumer goods companies with the highest total market value in Hong Kong stocks.
Relying on the mainland market, during the same period, Master Kong and Sun Art Retail and other Taiwanese companies also set records in revenue and total market value. From 2006 to 2015, Master Kong's revenue increased by 4.48 times, with cumulative revenue from mainland China exceeding 440 billion RMB, accounting for 99.15% of total revenue. Sun Art Retail's revenue increased by 5.54 times between 2008 and 2015, with revenue from mainland China approaching 560 billion RMB, accounting for 99.71% of total revenue.
Around 2013, the total market values of the three companies all exceeded 100 billion. The Taiwanese consumer and retail giants under the "three places across two shores" model collectively entered a glorious period.
**Changing Times, Failed Tactics: Taiwanese Giants Face Collective Difficulties**
China Want Want's "peak season" came to an abrupt end in 2014. That year, revenue slightly decreased by about 1%, while net profit fell by 11.15%. Since then, Want Want has been on a downward trend. Master Kong and Sun Art Retail have also experienced slowing revenue growth and even profit declines.
There are many reasons for Want Want's profit decline. In addition to the slowdown in the mainland macroeconomy, brand aging, fierce homogenized competition among domestic products, the impact of foreign brand foods, and the sharp decline in the number of children in China have all put pressure on performance.
Looking at the strategies of Taiwanese brands like Want Want, Master Kong, and Uni-President in expanding in the mainland market, they can be summarized as the "three axes": expanding channels, advertising, and expanding product categories. For a long time, this approach seemed simple and crude, but it was concise and effective. So much so that companies like Master Kong kept almost the same annual report format for over a decade after listing, always emphasizing channels at the beginning and elaborating on marketing and category expansion.
However, in recent years, with the saturation of the mainland market, demographic changes, retail channel reforms, and changes in communication channels brought about by the development of mobile internet, these once-revered "golden rules" have been increasingly challenged.
Take Want Want as an example. It has three product lines: rice crackers, dairy beverages, and leisure food. In the first half of this year, except for a slight 0.8% increase in revenue from the old rice cracker business, revenue from the dairy beverage business and leisure food business decreased by 18.5% and 11.1%, respectively.
In the rapidly changing market, Want Want still relies on some "old products" to contribute profits, showing obvious lack of innovation. Once old products decline, it hits overall performance.
For example, "Want Want Milk" has been on the market for many years. Want Want Milk accounts for 90% of revenue from dairy and beverages, and the dairy and beverage business accounts for about 48.2% of total revenue in the first half of this year. In the first half of this year, due to the weak overall environment, industry destocking with price cuts and promotions, and competition from room-temperature yogurt, this part of revenue fell by 17.4% compared to the same period last year. Financial reports show that China Want Want's revenue and net profit have been declining since 2014. Net profit fell by 11.15% and 7.33% in 2014 and 2015, respectively.
Similar problems also appear at Master Kong. The "Braised Beef Noodles" that has been on the market for many years is still Master Kong's main product. Apart from taking over PepsiCo's China business a few years ago and conducting large-scale channel integration, the beverage business has not seen major breakthroughs. After 2013, Master Kong's revenue and profit continued to decline, and in the first half of this year, net profit plummeted by more than 60%.
The share prices of many Taiwanese brands such as Master Kong, Want Want, and Sun Art Retail have collectively plummeted in the past two years, often halving. The total market value of the three companies has fallen by more than 300 billion HKD from their peaks.
Time flies, and circumstances change. Looking back at the performance of Taiwanese enterprises in the mainland retail market and Hong Kong capital market over the past few decades, it is clear that the difficulties faced by Taiwanese giants in recent years are not limited to individual companies or industries.
Is there really a solution to the collective crisis of Taiwanese enterprises?
**Bonus at the End: Four Heavenly Kings in Crisis, Over 100 Billion Vanished**
Author: Bread Finance (ID: mbcaijing)
Disclaimer: This article is for information sharing only and does not constitute any investment advice to anyone.


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