New Stock News | Yan's House Becomes China's Largest Bird's Nest Product Company with a 14% Market Share in 2022 through Listening Examination.

According to disclosure by the Hong Kong Stock Exchange on November 19th, Xiamen Yanzhiwu Bird's Nest Industry Co., Ltd. (referred to as "Yanzhiwu") conducted a hearing for listing on the main board of the Hong Kong Stock Exchange, with CICC and GF Financing (Hong Kong) serving as its joint sponsors. According to the prospectus, Yanzhiwu is a leading brand in the Chinese bird's nest product market, dedicated to research, production, and sale of high-quality modern bird's nest products. According to a Frost & Sullivan report, the company had the largest market share of bird's nest products in China's traceable bird's nest market based on retail sales volume in 2022, with a market share of 14%. According to the same data source, the company also ranked first in China's bird's nest product market based on the number of specialized bird's nest stores and the number of imports certified by the China Inspection and Testing Institute in 2022. Currently, Yanzhiwu has three main product categories, namely pure bird's nest products, bird's nest + products, and + bird's nest products. In 2022, the company had 250 SKUs, of which pure bird's nest products accounted for 194 varieties in the four product series, including bowl bird's nest, fresh stewed bird's nest, rock sugar bird's nest, and dry bird's nest. In addition, the company has extended the value chain of the bird's nest industry by developing other bird's nest products, including bowl bird's nest with vitality and ginseng rock sugar bird's nest, as well as bird's nest congee and bird's nest skincare products. The company has established a diversified physical sales network, including self-operated stores and distributor stores. As of May 31, 2023, the company had a nationwide offline sales network consisting of 91 self-operated stores and 214 offline distributors, covering 614 distributor stores in China. The number of offline distributors increased from 136 as of January 1, 2020, to 214 as of May 31, 2023. To seize the opportunities brought by the rapid development of e-commerce in recent years, the company has also expanded its online business on major e-commerce or social media platforms such as Tmall, JD.com, Douyin, and Xiaohongshu. China has a wide and longstanding cultural foundation and consumption history of edible bird's nest, and has always been the main market and largest consumer of bird's nest products. According to the Frost & Sullivan report, the retail sales volume of China's bird's nest market is expected to grow from RMB 43 billion in 2022 to RMB 92.1 billion in 2027, with a compound annual growth rate of 16.5%. As an industry leader, the company has outperformed the industry average. From 2020 to 2022, its total retail sales volume grew at a high compound annual growth rate of 12.3%, exceeding the industry average by 8.6 percentage points and ranking highest among the top five bird's nest brands in the same year. The company believes it has the ability to seize significant market opportunities. In terms of financials, the company's operating income for the fiscal years 2020, 2021, 2022, and the period ending May 31, 2023 were RMB 1.301 billion, RMB 1.507 billion, RMB 1.73 billion, and RMB 783 million respectively; and the net profits for the same periods were RMB 123 million, RMB 172 million, RMB 206 million, and RMB 100 million respectively. However, price fluctuations and quality changes in raw materials and packaging materials may have an adverse impact on the company's profitability and operating performance. In 2020, 2021, and 2022, the cost of raw materials accounted for 76.7%, 79.3%, and 77.3% of the company's total sales cost, respectively. In the future, the company expects the cost of raw materials to continue to account for a large portion of its sales cost.