Borealis Foods Faces Revenue Challenges: Navigating Market Pressures and Strategic Opportunities

Performance of the Quarterly Report

At the end of 2024, Borealis Foods (stock code: BRLS) had a total operating revenue of RMB6760282, down about 9.32% from RMB7457758 at the end of 2023. This change reflects the challenges the company faces in its operating revenue.

Key Data in the Financial Report

1. The decline in Borealis Foods' total operating revenue is mainly due to the poor performance of low-profit products (such as Ramen Express noodles) affected by inflation and competition.

2. The company's strategic adjustment in high-profit, high-end products (such as Chef Woo and Woodles) contributed 41% of revenue but failed to offset the overall revenue decline.

3. Changes in the macroeconomic environment, such as the conflict in Ukraine and increased transportation costs, led to lower-than-expected customer orders, further affecting revenue.

4. The food industry as a whole is facing pressure, with many companies reporting similar revenue declines, reflecting the dual impact of changing market demand and rising costs.

Peer Comparison

1. Industry-wide analysis: In 2024, the food industry generally faced pressure on operating revenue, with economic slowdown and rising raw material costs as the main reasons. This phenomenon indicates that Borealis Foods is not isolated but is affected by the overall market environment.

2. Peer evaluation analysis: Similar to the revenue decline of other companies in the industry, it shows the challenges Borealis Foods faces in maintaining its market share, with the overall economic pressure in the industry likely affecting its competitiveness.

Summary

The decline in Borealis Foods' operating revenue mainly reflects the multiple factors such as intensified competition and sluggish product demand, although the company has made some arrangements in high-profit, high-end products. However, the overall economic environment and industry pressure pose significant challenges.

Opportunities

1. The company can focus on the sustainable development of high-profit, high-end products to adapt to the market's demand for health-oriented products.

2. Collaborating with celebrity chefs to promote new products can enhance brand influence and attract more consumers.

3. With the digital transformation of the food industry, the company's performance in transparency and environmental responsibility may become a competitive advantage.

Risks

1. The continued weakness of low-profit products may drag down overall revenue, especially in an environment of inflation and increased competition.

2. Uncertainty in the macroeconomic environment may continue to affect consumer purchasing power, in turn affecting the company's revenue.

3. If Borealis Foods fails to effectively respond to price wars from competitors, it may face the risk of further declining market share.