Annual revenue exceeds 1.6 billion yuan, driven by strong sales of air fryers

In recent years, air fryers have become popular all over the world, and some companies have even gone public by selling air fryers overseas.

Biyi shares' annual revenue exceeded 1.6 billion yuan, a year-on-year increase of more than 40%

Biyi shares, known as the "first air fryer stock", recently released its 2021 annual report and 2022 first quarter financial report.

The financial report shows that in 2021, Biyi shares achieved revenue of 1.633 billion yuan, a year-on-year increase of 40.43%, with a strong growth rate. The net profit attributable to shareholders of the listed company was 119 million yuan, a year-on-year increase of 13.15%.

In the first quarter of 2022, Biyi's operating income was 367 million yuan, a year-on-year increase of 13.45%, and its net profit attributable to shareholders of listed companies was 25.47 million yuan, a year-on-year increase of 11.31%. Compared with the data for the whole year of 2021, the growth rates of its revenue and net profit have declined.

It is understood that Biyi Co., Ltd. is located in Yuyao City, Zhejiang Province. It was established in 2001. At the beginning, it mainly sold deep fryers. In 2014, it began to develop air fryers. Since then, air fryers have gradually become the company's main product. The financial report shows that Biyi Co., Ltd. is based in the field of high-quality small household appliances, and its core business is the design, manufacture and sales of small kitchen cooking appliances . The main products include air fryers, air ovens, deep fryers, grills, etc.

Among the company's main products, air fryers are its main product. In 2021, sales exceeded 5.6 million units, with revenue reaching 1.039 billion yuan, a year-on-year increase of 62.07%, accounting for 63.74% of the main revenue. Air ovens and deep fryers accounted for 15.24% and 13.70% of the main business revenue. In terms of product output and sales, the proportion of air fryers and air ovens is increasing, while the proportion of deep fryers is decreasing.

In terms of regional revenue, Biyi's export revenue accounted for 94.81% of its main business revenue in 2021. It is an out-and-out cross-border enterprise, with export customers mainly concentrated in North America, Europe, and South America, and some customers are distributed in the Middle East and South Africa.

Affected by the epidemic, air fryers have been rapidly popularized in overseas regions. According to data from the NPD Group, a total of 25.6 million air fryers were sold in the US market from January 2020 to December 2021. It is against this background that Biyi shares has achieved rapid growth in its business.

From the perspective of business model, Biyi’s business mainly includes ODM , OEM business and “BIYI” independent brand OBM business . Currently, ODM/OEM business is its main business model, and its independent brand is still in the early stages of development.

In the ODM/OEM model, Biyi's main customers include Philips, France's Cyber ​​Group, Lechu, Supor, Bear Electric, etc. In 2021, Philips became Biyi's largest customer, and Biyi's annual sales to Philips reached 404 million.

Therefore, although the revenue is considerable and the growth is strong, in terms of business model, Biyi Co., Ltd. is a cross-border enterprise mainly engaged in product OEM. It is still in the stage of "product export" and brand building is still in the early stages.

With the decline in revenue growth, Biyi shares face both "danger" and "opportunity"

Judging from the financial report data, Biyi shares face both "dangers" and "opportunities".

First of all, the revenue growth rate of Biyi Co., Ltd. in the first quarter of 2022 showed a significant decline compared with the whole year of 2021.

In addition to revenue, Biyi's profits have also declined. The financial report shows that the company's gross profit margins for the whole year of 2020, the whole year of 2021, and the first quarter of 2022 were 21.09%, 15.39%, and 12.92%, respectively, showing a downward trend year by year. In the first quarter of 2021, the net profit attributable to shareholders of listed companies after deducting non-recurring items even showed negative growth of -9.21%. The main reason for this is the increase in operating costs.

Biyi shares' financial reports for 2021 and the first quarter of 2022 show that its operating cost growth rate exceeded 50% and 15% respectively, both higher than the revenue growth rate in the same period. In its 2021 financial report, it stated that the increase in operating costs was mainly due to rising raw material prices.

In addition, Biyi’s business model, which is mainly based on OEM, also magnifies the impact of rising operating costs on profits.

According to the prospectus of Biyi Shares, the revenue share of the company's ODM, OEM and OBM businesses in the first half of 2021 was 86.03%, 13.50% and 0.47% respectively. The ODM and OEM foundry businesses together accounted for more than 99% of its revenue. As we all know, companies in the foundry model usually have weak bargaining power and small product profit margins, and cost fluctuations will greatly affect the company's profits. Therefore, the rapid decline in Biyi Shares' profit margin is not difficult to understand.

In its financial report, Biyi shares stated that it wanted to build its own brand influence. However, taking the brand route not only requires a large amount of investment, but also means competing with its existing customers. What impact this will have on Biyi shares' business is currently unpredictable.

Biyi's product line is also relatively simple, with air fryers accounting for nearly two-thirds of its revenue, and the three main products accounting for more than 90% of its revenue . At the same time, Biyi is also highly dependent on major customers. In 2021, Biyi's sales to the top five customers reached 815 million yuan , accounting for 49.97% of the annual total sales .

However, despite many unfavorable factors, Biyi shares still have considerable opportunities.

Although the company's business model is mainly based on OEM, OEM is divided into different models. Among them, ODM is a full range of services provided by OEM companies from R&D, design to production and post-maintenance according to customer needs, while OEM is a production and processing service provided by OEM companies based on the design drawings provided by customers.

It can be seen that ODM requires higher technology and R&D strength of OEM enterprises. Biyi shares' OEM model is mainly ODM. In addition, the financial report shows that Biyi shares has a total of 123 authorized patents, which also indirectly shows that it has certain technical strength. If it wants to take the branding route, Biyi shares also needs to increase its investment in marketing.

Regarding the issue of a single product line, Biyi shares stated in its prospectus that it will expand its product line in the future and will make multi-functional breakfast machines and multi-functional steaming and baking machines its key research and development directions.

From the market situation, air fryers still have a lot of room for growth.

Data shows that the global air fryer market has a compound annual growth rate of 18.9% from 2016 to 2021. The global air fryer market size in 2021 is US$2.33 billion, and will continue to grow in the next few years, and is expected to reach US$3.6 billion by 2026. European and American countries, which love fried food and have a prevalent fast food culture, are the main markets for air fryers. Among them, the United States is the largest market, and its share in the world is gradually increasing, from 29% in 2016 to 38% in 2021.

Therefore, Biyi shares can seize market opportunities and achieve transformation of its business model.

Biyi Shares

Air fryer

Financial Report