Three Squirrels(SZ:300783) Guotai Junan Securities·2024-08-29 03:16Investment Rating - The report maintains a "Buy" rating for the company [4][3] - The target price is set at 31.39 CNY, unchanged from the previous forecast [4][3] Core Insights - The company's "high-end cost-performance" strategy is leading to improved profitability during the off-season, validating its self-supply chain logic [2] - The company achieved a revenue of 5.075 billion CNY in H1 2024, representing a year-on-year increase of 75.39%, with a net profit of 290 million CNY, up 88.57% [3] - The overall gross margin increased by 3.2 percentage points to 21.9% in Q2 2024, indicating the effectiveness of the company's supply chain strategy [3] Financial Performance - H1 2024 revenue by channel showed significant growth: Douyin (+180.7%), Tmall (+28.3%), JD (+20.3%), and offline distribution (over 100%) [3] - The company expects continued strong growth in short video channels, particularly Douyin, and an increase in e-commerce market share [3] - The company reported a net profit margin improvement of 2.5 percentage points year-on-year to -1.3% in Q2 2024 [3] Product and Channel Strategy - The company is adapting its distribution to match products with channels, with new product launches and a focus on optimizing sales incentives for distributors [3] - The introduction of 105 new SKUs and the organization of five distributor co-creation meetings since August are expected to validate the company's distribution logic [3]