Shanghai Ziyan Foods (SH:603057) Soochow Securities·2025-11-03 15:38Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company is a leading player in the marinated food sector, with a strong focus on fresh products and a stable core product lineup. It has been transitioning from family management to modern corporate governance while expanding its market presence nationally and internationally [8][19]. - The marinated food market in China is characterized by a large market with many small enterprises, indicating significant growth potential for leading brands like the company, which holds a market share of 3.1% [48][57]. - The company is diversifying its operations, exploring new markets such as campus and B2B sectors domestically, and expanding internationally with a focus on establishing stores overseas and securing supply chains [8][19]. Summary by Sections 1. Company Overview - The company has evolved through three main stages: regional focus, national expansion, and the initiation of a global strategy. It was founded in 1989 and has grown to over 6,300 stores by mid-2024 [14][15]. - The product mix is heavily weighted towards fresh goods, which accounted for 83.4% of revenue in 2024, with core products like "Couple's Lung Slice" and "Whole Poultry" maintaining a stable market share [20][21]. 2. Market Landscape - The marinated food industry in China has seen a compound annual growth rate (CAGR) of 11.9% from 2018 to 2022, with the market size expanding from 1,498 billion yuan to 2,350 billion yuan [48][57]. - The company leads in store count among competitors, with over 5,000 stores, while the top five brands collectively hold only 5.1% market share, indicating low industry concentration and room for growth [57][64]. 3. Leadership Transition and Global Strategy - The second generation of leadership is actively pursuing a global strategy, with initiatives including the establishment of overseas stores and partnerships for sourcing raw materials [19][80]. - The company is also focusing on diversifying its domestic channels, particularly in the campus and B2B markets, to enhance brand visibility among younger consumers [19][34]. 4. Financial Analysis and Projections - Revenue projections for 2025-2027 are estimated at 31.6 billion yuan, 34.3 billion yuan, and 36.4 billion yuan, respectively, with corresponding net profits of 2.5 billion yuan, 2.9 billion yuan, and 3.4 billion yuan [1][8]. - The company's gross margin is closely tied to raw material prices, which have shown volatility but are expected to stabilize, allowing for potential margin improvements in the future [40][46].