Jiajia Foods, a publicly traded condiment producer, announced that it had made a loss in 2021. This is the first annual loss the company has suffered after being publicly listed for a decade.
The company cited the ongoing Covid situation and rising inputs costs as main reason for the poor performance.
Revenues from soy sauce decreased 27%, vinegar slumped 26%, chicken bouillon powder fell 24%, vegetable oil dropped 14%, other revenues slid 15%. The only segment that reported increased revenue was MSG, up only 5%.
The stock has fallen substantially this year, down 38% since the start of 2022.
Another company involved in condiments and spices, Anji Food, reported that their Q1 net profit fell 78.5% and noted that due to Covid restrictions the “entry and exit of goods were severely hindered, resulting in a significant reduction in sales revenue”.
Despite this, the company’s stock price has rallied 91% in 9 trading days. There doesn’t seem to be any clear reason for the rally. The company has come out and publicly said there is no change in their business and told investors the stock had reached a price-to-earnings ratio of 73x which is very high for a business that makes food seasonings.
Most companies in the prepared food and condiment space continue to be pressured by higher input costs they can’t pass off to their customers and logistics disruptions which weigh on their distribution.