Investment Rating - The report provides a positive investment rating for the industry, highlighting strong growth potential and market leadership of the company in the dried fruit snack sector [5][6]. Core Insights - The company has established itself as a leading brand in the dried fruit snack market in China, benefiting from the expansion of emerging sales channels and a robust product matrix [6][19]. - Revenue growth has accelerated, with a compound annual growth rate (CAGR) of 17.3% projected from 2022 to 2024, and a significant increase in net profit, which is expected to double over two years [5][19]. - The company is actively expanding its product offerings and sales channels, including direct sales, supermarkets, and membership stores, which are contributing to its rapid growth [6][43]. Financial Performance - Revenue increased from 11.7 billion yuan in 2022 to 16.2 billion yuan in 2024, with a year-on-year growth of 22.2% in 2024 [5][19]. - Net profit rose from 0.7 billion yuan in 2022 to 1.5 billion yuan in 2024, achieving a CAGR of 46.9% [5][19]. - The gross margin decreased slightly, but the net margin improved, reaching 9.1% in 2024, up from 7.5% in 2023 [5][24]. Business Performance - The company has successfully developed a second growth curve through its product lines, with significant growth in its plum and jelly products [36][39]. - The dried plum snacks, plum products, and jelly products generated revenues of 9.7 billion yuan, 2.2 billion yuan, and 4.1 billion yuan respectively in 2024, with respective CAGRs of 9.7%, 35.5%, and 33.5% from 2022 to 2024 [39][40]. - The company has established a comprehensive sales channel network, leveraging both online and offline platforms, with emerging channels showing high growth rates [43][44]. Industry Situation - The demand for snack foods is expanding, with the dried fruit market, particularly for plums, experiencing high growth rates [75][76]. - The overall market for fruit snacks in China is projected to grow significantly, with the plum snack segment leading the growth [76][79]. - The natural jelly market is also benefiting from an increase in consumption scenarios, aligning with consumer trends towards healthier options [78][79].

Core Viewpoint - Liu Liu Guo Yuan, the parent company of Liu Liu Mei, is preparing for an IPO on the Hong Kong Stock Exchange after previously failing to list in A-shares in 2019, despite achieving significant revenue and profit growth in recent years [1][10]. Financial Performance - Liu Liu Guo Yuan's revenue from 2022 to 2024 is projected to grow from 11.74 billion RMB to 16.16 billion RMB, with net profit increasing from 0.68 billion RMB to 1.48 billion RMB [2][10]. - The gross profit for the same period is expected to rise from 4.53 billion RMB to 5.83 billion RMB, although the gross margin for core products is declining [2][10]. Product Composition - The core product, dried plums, contributes over 60% of total revenue, with its gross margin decreasing from 39.6% in 2022 to 32.1% in 2024 [2][4]. - The company has diversified its product line to include dried plums, western plums, and plum jelly, with plum jelly becoming the second-largest revenue source at 4.1 billion RMB in 2024, accounting for 25.4% of total revenue [4][10]. Marketing and Expenditure - Liu Liu Guo Yuan has invested heavily in marketing, with total sales expenses over three years amounting to 9.02 billion RMB, significantly exceeding net profits [5][6]. - Marketing expenses for 2024 are projected at 3.1 billion RMB, while R&D spending has decreased to 189 million RMB, down 44% year-on-year [5][6]. Industry Position and Competition - Liu Liu Guo Yuan holds a leading market share of 45.7% in the natural jelly industry and 7% in the dried fruit snack market, maintaining its top position for four consecutive years [10]. - The company faces increasing competition from established snack brands and new entrants in the dried fruit segment, raising questions about its long-term value in the capital market [11].