Pricing Strategy - The company last raised prices at the end of 2021 due to rising raw material costs, impacting sales in 2022 [1] - In 2023, the company introduced a 60g product at a price of 2 yuan to stabilize low-price competition and plans to lift restrictions on 60g product distribution in 2024 [1] - An "increase quantity without increasing price" strategy was implemented for the 80g product this year to enhance consumer perception and brand loyalty [2] Market Dynamics - The company's sales are primarily concentrated in first-tier cities, but there is a shift as consumers return to county-level markets, affecting sales strategies [3] - The pickled vegetable market is currently in a state of stock competition, with competitors increasing promotional efforts, prompting the company to enhance its marketing strategies [3] Collaboration with Retailers - The company has established a large customer group sales department to directly engage with major retailers like Sam's Club and Hema, allowing for customized product development and direct feedback [4] Mergers and Acquisitions - The company is pursuing a "dual-wheel drive" strategy, planning to acquire Weizimei to enter the compound seasoning market, which has significant growth potential [5] - Weizimei has established capabilities in B-end product development, which the company aims to leverage for rapid channel expansion [5] Online Presence - The company has invested in online advertising and promotions, but the short-term returns are lower compared to offline channels, impacting profit margins [6] - The online market is characterized by low-price competition, which could disrupt the company's mid-to-high-end product positioning [6] Product Development - The company has focused heavily on promoting pickled vegetables, leading to weaker support for other product categories [7] - Adjustments have been made to the production process and positioning of radish products, with new offerings like "Crispy Dried Radish" launched in Hema [7] Sales Model - The company has implemented a credit system for long-term, high-volume distributors, allowing them to use credit mid-year, while others continue with a "payment before delivery" model [8] Competitive Advantages - The company benefits from strong brand recognition, particularly for "Wujiangs" pickled vegetables, and has a stable supply of raw materials from the Fuling region [9] - Advanced production technology and a seasoned management team provide a competitive edge in the industry [9] Employee Incentives - The company is exploring long-term incentive mechanisms, including stock options, to enhance employee motivation [10]

Group 1: Market Dynamics and Opportunities - The shift towards domestic alternatives in the instrument industry is driven by increased safety awareness and government policies promoting the acceptance of domestic scientific instruments [2] - The industry is experiencing rapid development, leading to the entry of new competitors; however, the market is highly segmented, making it challenging for new entrants to gain a foothold [2] - The domestic scientific instrument sector is expected to evolve quickly due to the involvement of high-end clients, enhancing the iteration of products and broadening application scenarios [2] Group 2: Competitive Advantages and Strategies - The company has accumulated extensive experience in product variety, application scenarios, and solutions, which helps maintain a competitive edge against foreign leaders [2] - The focus on long-term product refinement and quality improvement is essential for sustaining competitiveness in a technology-intensive industry [2][3] - The company plans to emphasize its core business and implement a premium strategy to develop star products and brands while expanding its marketing network [3] Group 3: Operational Adjustments and Workforce Management - The company experienced a significant reduction in employee numbers last year due to structural adjustments; however, the workforce is now stabilizing [3] - Future hiring will be based on the growth potential of specific business segments, with a focus on maintaining stability and efficiency in operations [3] - Cost management will continue to be refined to enhance efficiency and control expenses [3] Group 4: Localization and Supply Chain Development - The localization rate of core components is difficult to quantify, but larger product volumes tend to have higher localization rates [3] - The development of industry supply chains is crucial, with the need for leading companies to drive growth in the analysis instrument sector, characterized by diverse and small-batch production [3]

Investment Rating - The report maintains a "Buy" rating for the company [5][8] Core Views - The company experienced a significant increase in profitability in the fourth quarter, with a net profit of 612 million yuan, a year-on-year increase of 2774.96% and a quarter-on-quarter increase of 221.51% [2] - The company is focusing on high-end products, with the proportion of key products increasing to 55.27%, up 6.84 percentage points from 2023 [4] - The company aims to optimize its product structure and has exited the trading business to focus on high-quality steel production [3] Financial Performance - In 2024, the company achieved operating revenue of 41.804 billion yuan, a year-on-year decrease of 41.24% [3] - The net profit attributable to the parent company for the year was 32.78 million yuan, a decrease of 93.41% year-on-year [2] - The company’s sales gross margin improved significantly in the fourth quarter, reaching 5.18% [2] Production and Sales - The company produced 9.9293 million tons of steel in 2024, a year-on-year decrease of 8.59% [3] - The sales volume was 9.9696 million tons, down 7.82% year-on-year [3] Future Outlook - The company is expected to recover significantly in profitability after a short-term downturn, with projected net profits of 900 million yuan, 1.1 billion yuan, and 1.34 billion yuan for 2025, 2026, and 2027 respectively [5] - The valuation is expected to have significant recovery potential, with a market value around 17 billion yuan at the mid-point of the valuation range [5]

Core Insights - The company reported a revenue of approximately 8.121 billion yuan for 2024, representing a year-on-year growth of 15.8% [1] - The gross profit was around 3.922 billion yuan, with a year-on-year increase of 16.3% [1] - The company experienced a loss attributable to equity holders of approximately 209 million yuan, a shift from profit to loss compared to the previous year [1] Revenue Breakdown - Online business revenue increased by 2.1% year-on-year to 4.031 billion yuan, accounting for 49.6% of total revenue [1] - Revenue from proprietary platform products' online business rose by 3.4% year-on-year to 3.531 billion yuan, driven by improved core product operations and high-quality content production [1] - Revenue from Tencent product channels' online business decreased by 28.2% year-on-year to 245 million yuan, primarily due to content distribution optimization [1] - Revenue from third-party platform online business increased by 32.0% year-on-year to 254 million yuan, attributed to expanded partnerships with third-party distributors [1] User Metrics - Average monthly active users for proprietary platform products and self-operated channels decreased by 19.0% year-on-year to 166.6 million [2] - Monthly active users for proprietary platform products remained stable at 103.8 million, compared to 104.8 million in 2023 [2] - Monthly active users for Tencent product self-operated channels decreased by 37.7% year-on-year to 62.8 million, due to operational efficiency optimizations [2] - Average monthly paying users increased by 4.6% year-on-year to 9.1 million, driven by the launch of more membership content in 2024 [2] IP Operations and Derivative Products - The company's IP operation business revenue grew by 34% year-on-year to 4 billion yuan under the guidance of a premium strategy [3] - Successful launches of popular content such as "Hot and Spicy" and "Celebrating the Year 2" helped solidify the company's industry-leading position [3] - The derivative products business achieved rapid growth, with a GMV exceeding 500 million yuan in 2024 [3] - The company secured the domestic general agency rights for derivative products of "Nezha 2," showcasing its strength in the IP derivative field [3] - The company plans to continue its premium strategy to create long-lasting IPs and expand their boundaries and value [3]