Intrinsic Value YanKer shop Food Co.,Ltd (002847.SZ)

• Previous Close: $68.01
• Intrinsic Value: $257.99
• Upside potential: +279%

Stock Valuation Context

Business Model And Market Position

YanKer Shop Food Co., Ltd. operates as a prominent player in China's competitive packaged foods industry, specializing in the research, development, production, and sale of a diverse portfolio of leisure snack products. The company's core revenue model is driven by the manufacturing and distribution of various food categories, including candid roasted seeds and nuts, cooked leisure soy products, dried meats, dried and candied fruits, and vegetarian snacks. This diversified product lineup, which also extends to items like fish tofu, potato chips, bread, cakes, and spicy strips, positions YanKer Shop to cater to a broad consumer base seeking convenient and flavorful snack options. Within the consumer defensive sector, the company has established a solid market presence, leveraging its integrated operations from R&D to sales to capture value across the supply chain. Its position is characterized by a focus on variety and accessibility, competing in a fragmented but growing market for packaged snacks in China. The company's headquarters in Changsha, a major economic hub, provides strategic advantages in logistics and market access, supporting its nationwide distribution network.

Revenue Profitability And Efficiency

For the fiscal year, YanKer Shop reported robust revenue of CNY 5.30 billion, demonstrating significant scale within its market segment. The company achieved a net income of CNY 639.9 million, translating to a healthy net profit margin of approximately 12.1%. Strong operating cash flow generation of CNY 1.13 billion indicates efficient management of core business operations, comfortably covering capital expenditures of CNY 783 million and supporting ongoing investment in production capacity.

Earnings Power And Capital Efficiency

The company exhibits solid earnings power, with diluted earnings per share of CNY 2.36. The substantial operating cash flow significantly exceeds net income, suggesting high-quality earnings that are not reliant on non-cash adjustments. This strong cash generation provides ample resources for reinvestment into the business, debt servicing, and shareholder returns, reflecting effective capital allocation and operational execution.

Balance Sheet And Financial Health

YanKer Shop maintains a balanced financial structure with total debt of CNY 638.0 million against cash and equivalents of CNY 235.2 million. While the cash position is lower than total debt, the company's strong and consistent operating cash flow provides a reliable buffer for meeting its financial obligations. The overall leverage appears manageable given the stable and defensive nature of its business, supporting a assessment of moderate financial health.

Growth Trends And Dividend Policy

The company demonstrates a commitment to returning capital to shareholders, evidenced by a dividend per share of CNY 1.00. This payout, against an EPS of CNY 2.36, implies a dividend payout ratio of approximately 42%, indicating a balanced approach that retains earnings for future growth while providing an immediate return to investors. The policy reflects confidence in the company's sustainable cash flow generation.

Valuation And Market Expectations

With a market capitalization of approximately CNY 18.48 billion, the market values YanKer Shop at a price-to-earnings ratio of roughly 28.9 times trailing earnings. A beta of 0.39 suggests the stock is significantly less volatile than the broader market, which is typical for a consumer defensive company. This valuation implies market expectations for stable, low-risk earnings growth aligned with its sector.

Strategic Advantages And Outlook

YanKer Shop's key strategic advantages lie in its vertically integrated model, diverse product portfolio, and established presence in China's large consumer market. The outlook is supported by consistent demand for affordable leisure snacks. Future performance will likely depend on the company's ability to manage input cost inflation, maintain brand relevance, and efficiently navigate competitive pressures within the dynamic Chinese consumer goods landscape.

Sources

Company Financials