Three Squirrels(SZ:300783) Dongxing Securities·2024-10-11 10:12Investment Rating - The report maintains a "Strong Buy" rating for the company, indicating a strong performance relative to market benchmarks [2][7][18]. Core Insights - The company reported a significant increase in net profit for Q3 2024, with an expected net profit of 48.1 to 52 million yuan, representing a year-on-year growth of 200.45% to 224.81% [1][2]. - The company's strategic focus on "high-end cost performance" has led to sustained improvements in operational efficiency and profitability, with a notable reduction in online marketing expenses [1][2]. - The company has successfully implemented supply chain innovations and channel strategies, particularly through platforms like Douyin, which have contributed to a favorable cost structure and enhanced product competitiveness [1][2]. Financial Performance Summary - The company expects total revenue for 2024 to reach approximately 10.55 billion yuan, with a projected net profit of 414.19 million yuan, reflecting an 88.45% increase year-on-year [9][10]. - The earnings per share (EPS) for 2024 is estimated at 1.03 yuan, with projected PE ratios of 24, 18, and 14 for the years 2024, 2025, and 2026 respectively [2][9]. - The company has shown a consistent growth trend over the past five quarters, indicating a robust recovery and operational transformation [1][2]. Strategic Initiatives - The company has initiated a stock incentive plan aimed at achieving ambitious revenue targets of 11.5 billion, 15 billion, and 20 billion yuan for the years 2024 to 2026, reflecting management's confidence in future growth [2][9]. - The focus on enhancing distribution channels, particularly in the snack food sector, is expected to drive long-term growth, with current distribution contributing only 13% to total revenue [1][2]. Market Position - The company operates in the snack food industry, with a strong brand presence and a diverse product portfolio including nuts, dried fruits, and baked goods [5][9]. - The total market capitalization of the company is approximately 9.75 billion yuan, with a circulating market value of 6.8 billion yuan [5].