KE MING FOOD(SZ:002661)2022-12-04 10:24Impact of COVID-19 on the Industry - The pandemic negatively affected the sales of short-shelf-life wet noodles due to restaurant closures, while dry noodles saw a 40% increase in orders compared to the same period last year [3] - The company maintained a leading market share in supermarkets despite some retail outlets being forced to close [4] Production Recovery Status - As of February 5, 2020, the company had restored 9 production lines for dry noodles, 1 for instant noodles, and 1 for fresh wet noodles, achieving approximately 20% of the annual production capacity of 600,000 tons for dry noodles [4] - The order fulfillment rate is currently below 50%, with instant noodles experiencing even lower fulfillment rates [7] Raw Material and Cost Management - The company has secured a stable supply of flour through its own flour factory and long-term contracts with suppliers, with no significant price fluctuations expected for wheat [4][5] - Logistics costs increased by nearly 24% year-on-year and over 16% month-on-month from January 28 to February 4, but logistics expenses remain below 5% of total costs [7] Sales and Marketing Strategy Adjustments - The sales expense strategy has shifted from a nationwide approach to more targeted spending on specific cities and distributors, with a goal to keep the sales expense ratio around 10% [5] - Consumer sensitivity to product prices has decreased during the pandemic, leading to a potential reduction in promotional activities and a shift towards higher-margin products [6] Inventory and Supply Chain Insights - Channel inventory is low, with some products already experiencing stockouts, indicating a tight supply chain [6] - The company anticipates that the new flour production line project will enhance self-sufficiency in flour supply once operational [8] Seasonal Sales Impact - Sales during the Spring Festival typically account for about 50% of the first quarter's total sales, with the festival's influence on sales volume estimated to be around 80% [8]