QIANHE(SH:603027) Chang Jiang Shang Bao·2025-07-06 22:39Core Viewpoint - The marketing strategy of "zero additives" by Qianhe Flavor Industry has backfired, leading to a significant loss of consumer trust and a drop in stock price, resulting in a market value loss of nearly 1 billion yuan [1][10]. Company Overview - Founded by Wu Chaoqun nearly 30 years ago, Qianhe Flavor Industry has become one of the top three players in the seasoning industry [2]. - In 2023, Wu Chaoqun injected 800 million yuan into Qianhe for the construction of 600,000 tons of production capacity, indicating his ambitious plans for the company [3]. Financial Performance - In 2024, Qianhe Flavor Industry experienced its first decline in both revenue and net profit, with a projected revenue of 3.073 billion yuan and a net profit of 514 million yuan, marking a year-on-year decrease of 4.16% and 3.07% respectively [19]. - In the first quarter of 2024, the company reported a revenue of 831 million yuan, a year-on-year decline of 7.15% [19]. Marketing and Consumer Trust Issues - The "zero additives" claim has been called into question after a report revealed that many soy sauces, including Qianhe's, contained trace amounts of harmful substances like cadmium [6][7]. - Qianhe's branding strategy, particularly the "Qianhe 0" trademark, has been criticized for misleading consumers into believing it signifies "zero additives" [8][9]. - The company has faced backlash for perceived false advertising, leading to a significant drop in consumer trust and sales [10][22]. Industry Context - The seasoning industry is experiencing increasing product homogeneity, making it difficult for Qianhe to maintain a competitive edge [22]. - New regulations from the National Health Commission and the State Administration for Market Regulation will restrict the use of terms like "zero additives," which could further impact Qianhe's marketing strategy [23][24]. Production Capacity Expansion - In 2023, Qianhe Flavor Industry completed a major expansion, increasing its annual production capacity to approximately 1.2 million tons, doubling its capacity from the end of 2022 [26][27]. - The new production facility aims to enhance efficiency, optimize costs, and replicate traditional soy sauce flavors on a large scale [27]. Future Outlook - The company is currently focused on brand recovery, product development, and expanding its sales network as it navigates the aftermath of the trust crisis [28].