Three Squirrels(300783)2024-03-28 16:00Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1]. Core Insights - The company's revenue has slightly declined, but profitability has significantly improved. In 2023, the company's revenue decreased by 2.45% year-on-year, with a gross profit margin decline of 3.41 percentage points, leading to a gross profit decrease of 14.91%. However, effective cost control resulted in a reduction of total expense ratio by 4.52 percentage points, contributing to a 56.43% year-on-year increase in total profit. Additionally, a decrease in income tax rate by 5.70% year-on-year led to a 69.85% increase in net profit attributable to the parent company [4][18]. Summary by Sections Financial Performance - In 2023, the company achieved a total revenue of 71.15 billion yuan, a year-on-year decrease of 2.45%. The net profit attributable to the parent company was 2.2 billion yuan, reflecting a year-on-year increase of 69.85% [18]. - The company forecasts revenues of 100.64 billion yuan, 126.43 billion yuan, and 148.02 billion yuan for 2024, 2025, and 2026 respectively, with corresponding net profits of 3.43 billion yuan, 5.11 billion yuan, and 6.93 billion yuan [7][31]. Product Strategy - The company focuses on nuts as its core product category, maintaining the top market share online. During the New Year Festival, the company achieved over 60% year-on-year revenue growth across all channels, with "nut gifts" capturing over 35% of the online market share. The company has launched over 1,000 new SKUs since March 2023, with several products ranking top in their categories on platforms like Douyin and Tmall [5][20]. Market Positioning - The company has adopted a "high-end cost-performance" strategy, which has helped it navigate through challenging market conditions. The third and fourth quarters of 2023 saw significant performance growth, contributing over 1 billion yuan in incremental revenue, laying a solid foundation for substantial growth during the 2024 New Year Festival [19][22]. Channel Development - The company has established a "Douyin + N" multi-channel layout, achieving a revenue of 12.04 billion yuan from Douyin, representing a year-on-year growth of 118.51%. The offline revenue from community snack stores and optimized existing store types also contributed to overall sales [20][22]. Supply Chain Enhancement - The company has entered the self-manufacturing segment for nuts, enhancing its supply chain capabilities. It has upgraded automated production lines and established procurement points in key regions, collaborating with major global suppliers to strengthen its supply chain [22].