Summary of the Conference Call for Miaokelando Company Overview - **Company**: Miaokelando - **Industry**: Cheese Retail Market Key Points and Arguments Industry Dynamics - After 2022, the cheese retail market experienced a decline, but leading companies like Miaokelando increased their market share, which is currently around 30% [2][3] - Smaller brands are exiting the market due to cost pressures and insufficient R&D capabilities, raising industry barriers [2][3] Business Performance - **C-end (Consumer)**: Miaokelando is diversifying its product matrix beyond low-temperature cheese sticks to include adult cheese snacks, expanding into new channels like Hema and Sam's Club [2][4] - **B-end (Commercial)**: The company has made significant progress in sectors like Western cuisine, baking, and tea drinks, aided by resources from Mengniu and partnerships with major brands like Yum and McDonald's [2][4][12][13] Growth Potential - Miaokelando is positioned for dual growth in revenue and profit, leveraging low milk prices and deep processing to replace imported cheese, thus reducing costs [2][5] - The Chinese cheese market is expected to grow significantly, with a mid-term scale projected to reach 300-400 billion yuan and a long-term potential to exceed 1 trillion yuan [2][6] Management and Strategy - The new management team, which includes nine executives with marketing backgrounds, is focused on business-driven and diversified growth, setting ambitious revenue and profit targets for 2025-2027 [2][9] - The company has launched a stock incentive plan to boost confidence in future performance, targeting a revenue growth rate of 16% by 2026 and 20% by 2027 [9][18] Channel Expansion - Miaokelando is actively exploring new channels, including customized products for Sam's Club and Hema, and entering snack wholesale markets with smaller packaging [2][10] Marketing Innovations - The company is shifting its marketing strategy to include adult-oriented IP resources, signing contracts for IP rights worth 50 million yuan to enhance brand recognition among younger consumers [2][11] B-end Market Development - The B-end market is expected to grow significantly, with the Western fast food market projected to reach approximately 300 billion yuan by 2024, and the tea and coffee market exceeding 500 billion yuan in 2023 [12][14] Support from Mengniu - Mengniu's acquisition of Miaokelando has provided substantial support, including supply chain advantages that help reduce raw material costs and enhance competitiveness [15][16] Cost Structure and Profitability - The cost of domestically produced cheese is now 80-90% of imported cheese, with potential reductions to 70% through better raw milk procurement [17] - This shift is expected to improve gross margins, particularly in the B-end market where cost sensitivity is higher [17] Future Outlook - Miaokelando aims for a net profit margin comparable to international leaders, with a vision to achieve over 10 billion yuan in revenue by 2030 [18] - The company anticipates a doubling of profits and a double-digit revenue growth in 2025, with a projected net profit of 38 to 63 million yuan for Q2 [18][19] Valuation Concerns - There are concerns regarding the high valuation of Miaokelando, with a current P/E ratio of 60, expected to normalize to around 30 by 2027 [20][21] - Despite this, the company is viewed positively due to its unique position in the cheese market and the anticipated profit growth [20][21] Additional Important Insights - The cheese consumption per capita in China is significantly lower than in Japan, South Korea, and Western countries, indicating substantial growth potential in the market [6] - The management's focus on innovation and market expansion is expected to drive future growth and profitability [7][8]