Three Squirrels(SZ:300783) Haitong Securities International·2025-08-28 15:19Investment Rating - The report does not explicitly state the investment rating for Three Squirrels Co., Ltd. Core Insights - Three Squirrels achieved total operating revenue of RMB 5.48 billion in 1H25, representing a year-on-year increase of 7.9%, with 2Q revenue reaching RMB 1.75 billion, up 22.8% year-on-year [2][8] - The company experienced a decline in net profit attributable to shareholders, which was RMB 140 million in 1H25, down 52.2% year-on-year, and a net loss of RMB 100 million in 2Q25, down 441.4% year-on-year [3][9] - The gross margin for 1H25 was 25.1%, a decrease of 0.7 percentage points year-on-year, primarily due to rising raw material costs [3][9] - The company has a mature omni-channel operation system, with online channels accounting for 78.4% of total revenue, and Douyin-affiliated platforms contributing RMB 1.478 billion, or 27.0% [4][10] - The nut business remains the core profit pillar, with successful star products generating over RMB 100 million in sales, while the bakery and comprehensive categories are also expanding rapidly [5][11] Summary by Sections Revenue and Profitability - In 1H25, the nut business generated RMB 2.73 billion, down 1.0% year-on-year, while the bakery business achieved RMB 680 million, up 12.0% year-on-year, and comprehensive categories reached RMB 1.40 billion, up 49.7% year-on-year [2][8] - The company reported a significant decrease in net cash flow from operating activities, amounting to RMB -380 million in 1H25, compared to RMB 38.63 million in the same period last year [2][8] Cost and Expenses - The selling and administrative expense ratios increased to 20.4% and 2.8% in 1H25, up 2.8 percentage points and 0.9 percentage points year-on-year, respectively [3][9] - The gross margin for the nut business was 23.9%, down 2.6 percentage points year-on-year, while the bakery business gross margin was 22.7%, up 1.1 percentage points [3][9] Market Position and Strategy - The company has maintained its position as the industry leader in nut products for eight consecutive years, with a focus on expanding into seed nuts and emerging beverage categories [5][11] - The omni-channel strategy has enhanced market coverage and sales flexibility, with offline distribution channels achieving double-digit sales growth [4][10]