Core Insights - The core viewpoint of the articles highlights the financial struggles of Three Squirrels Co., Ltd., particularly in the context of rising costs and declining profits despite revenue growth [2][3][4]. Financial Performance - In the first three quarters of the year, Three Squirrels reported revenue of 7.759 billion yuan, an increase of 8.22% year-on-year, but net profit fell by 52.91% to 161 million yuan [2]. - The company's cash flow from operating activities was negative 506 million yuan, a significant decline compared to a positive 31.8 million yuan in the same period last year, attributed to increased procurement expenses [2]. - In 2024, Three Squirrels achieved revenue of 10.622 billion yuan, a 49.30% increase, and net profit rose by 85.51% to 408 million yuan, marking a recovery from previous declines [3]. Channel Performance - The Douyin platform significantly contributed to Three Squirrels' revenue, generating 2.188 billion yuan in 2024, a year-on-year increase of 81.73%, making it the largest sales channel [3]. - However, in 2025, growth from the Douyin channel slowed, with a year-on-year increase of only 20.75% in the first half of the year, indicating a broader trend of decelerating growth in social media e-commerce [4]. Strategic Initiatives - In response to online growth challenges, Three Squirrels is expanding its offline presence by launching its own brand stores, "Three Squirrels Life Hall," with plans to open 20 locations this year [5]. - The company is also focusing on convenience store formats, adopting a franchise model with plans to sign over 500 stores by the end of the year [5]. Industry Challenges - The overall snack industry is facing challenges as traditional brands like Three Squirrels engage in price wars due to aggressive expansion by low-cost competitors [5]. - Product innovation is emphasized as a critical area for traditional snack brands to differentiate themselves and drive growth, alongside channel expansion [6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company has successfully restored revenue growth, with a significant increase in channel expenses impacting short-term profitability. The second quarter of 2025 saw a notable recovery in sales through Douyin, contributing to high revenue growth, while increased spending on offline distribution and rising online platform fees have pressured profit margins [6][7] - The company reported a revenue of 1.754 billion yuan in Q2 2025, representing a year-on-year increase of 22.77%, but a net loss of 101 million yuan, a decline of 441.41% year-on-year. For the first half of 2025, revenue reached 5.478 billion yuan, up 7.94% year-on-year, with a net profit of 138 million yuan, down 52.22% year-on-year [7][8] Revenue and Profitability - In H1 2025, the company's online and offline revenue grew by 5.0% and 20.1% year-on-year, respectively, with online revenue accounting for 78.4% of total revenue. Douyin's performance was particularly strong, with a year-on-year growth of 20.8% [7] - The company is expected to achieve revenues of 12.345 billion yuan, 14.361 billion yuan, and 16.526 billion yuan for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 16.2%, 16.3%, and 15.1% [7][10] Financial Metrics - The company's projected net profit for 2025, 2026, and 2027 is 252 million yuan, 393 million yuan, and 538 million yuan, respectively, with year-on-year changes of -38.3%, 56.0%, and 37.0% [10] - The projected P/E ratios for the company are 42, 27, and 20 for the years 2025, 2026, and 2027, respectively, indicating a maintained "Buy" rating [8][10]