Core Viewpoint - Youyou Foods achieved a revenue of 1.182 billion yuan in 2024, marking a year-on-year growth of 22.37%, and a net profit of 157 million yuan, up 35.44%, reversing a trend of declining revenue since 2022 [1][2] Group 1: Financial Performance - The company reported a significant increase in revenue and net profit in 2024, indicating a potential turning point after three years of declining net profit and two years of declining revenue [1][2] - The revenue growth was primarily driven by the entry into membership-based supermarket channels such as Sam's Club, where a new product, deboned duck feet, became a bestseller [1][2] - The segment "other flavored meat products" saw a dramatic increase of 840.69%, growing from 16.21 million yuan to 152 million yuan, contributing significantly to revenue growth [1] Group 2: Market Strategy and Challenges - The company has partnered with Sam's Club and Hema to launch customized products, which has bolstered management's confidence in achieving a revenue growth target of no less than 20% for 2025 [2] - Despite the positive developments, the core product, spicy chicken feet, has been experiencing declining sales since 2019, with 2024 sales still below 2020 levels [2][3] - The company faces challenges similar to other snack food companies, including brand aging and reliance on a single product, which limits its ability to innovate in response to changing consumer trends [2] Group 3: Operational Insights - The company has seen a significant increase in accounts receivable, rising from 3.7948 million yuan to 74.6145 million yuan, indicating longer payment terms with direct sales channels [5] - The gross margin for traditional products remains high, but new products have lower margins, which could impact overall profitability as their revenue share increases [4][5] - The company’s production capacity has stagnated, with total production in 2024 at 26,300 tons, similar to 2018 levels, suggesting underutilization of capacity [5][6]

Core Viewpoint - The company reported a decline in revenue and net profit for 2024, indicating challenges in its operational performance while also focusing on improving store quality and efficiency [2][3][4] Financial Performance - In 2024, the company achieved revenue of 2.451 billion, a year-on-year decrease of 10.66%, and a net profit attributable to shareholders of 98 million, down 15.03% [2] - For the second half of 2024, revenue was 1.192 billion, a decline of 10.34%, but net profit increased significantly by 371.96% to 65 million [2] Store Optimization Strategy - The company is shifting its focus from expanding the number of stores to enhancing store quality, resulting in the closure of 785 underperforming stores, with a total of 3,031 stores remaining by the end of 2024 [3] - Revenue from self-operated stores, online channels, and franchising was 1.391 billion, 334 million, and 612 million respectively, with declines of 5.13%, 15.53%, and 21.88% [3] Cost Management and Profitability - The gross margin improved to 56.79%, an increase of 4.37 percentage points, primarily due to lower raw material costs and a higher proportion of self-operated stores [4] - The sales expense ratio rose to 40.34%, up 4.52 percentage points, reflecting increased investment in high-potential self-operated stores, while management expense ratio decreased to 10.60%, down 0.95 percentage points due to improved management efficiency [4] Future Outlook - The company plans to continue its strategy of focusing on store performance rather than quantity, with positive trends in same-store sales and customer traffic observed since 2025 [4] - New initiatives include the establishment of a special business unit to explore new channels and the introduction of exclusive beverage brands to enhance consumer experience and sales [4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights that the company's brand influence continues to rise, with a focus on breakthroughs in new channels [1] - The company achieved a revenue of 2.412 billion yuan in 2024, representing a year-on-year growth of 16.79%, and a net profit of 291 million yuan, up 39.01% year-on-year [7] - The report emphasizes the company's strategic clarity and commitment to product quality, focusing on fish, egg, and bean categories, while expanding modern channels through large packaging upgrades [7] Financial Data and Profit Forecast - Total revenue projections for the company are as follows: 2023: 2.065 billion yuan, 2024: 2.412 billion yuan, 2025E: 2.788 billion yuan, 2026E: 3.207 billion yuan, 2027E: 3.687 billion yuan, with respective year-on-year growth rates of 41.3%, 16.8%, 15.6%, 15.1%, and 15.0% [6][8] - The net profit forecast for 2025 is 331 million yuan, with a year-on-year growth of 13.6% [6][8] - The report indicates a projected PE ratio of 16x for 2025, 14x for 2026, and 11x for 2027, reflecting the company's long-term growth potential [7] Product and Channel Performance - In 2024, the revenue breakdown by product category was as follows: fish products: 1.533 billion yuan (up 18.8%), poultry products: 509 million yuan (up 12.7%), bean products: 247 million yuan (up 13.9%), and vegetable products: 79 million yuan (up 9.6%) [7] - The company plans to enhance its offline distribution channel advantages and improve brand strength, particularly focusing on high-end products like deep-sea fish [7] - The report notes that online channel revenue decreased by 6.2% year-on-year, accounting for 16.2% of total revenue in 2024 [7] Cost and Profitability - The company achieved a gross margin of 30.47% in 2024, an increase of 2.3 percentage points year-on-year, primarily due to cost reductions and scale advantages [7] - The net profit margin for 2024 was 12.17%, up 1.9 percentage points year-on-year [7] - The report anticipates short-term pressure on profitability in 2025, but expects an overall improvement later in the year based on cost trends and revenue performance [7]