Core Viewpoint - Qiaqia Food, known as "China's first stock of fried seeds," is facing significant challenges, with a notable decline in both revenue and net profit in its recent half-year report, marking the largest drop in recent years [1][2]. Financial Performance - In the first half of the year, Qiaqia Food reported revenue of 2.752 billion yuan, a year-on-year decrease of 5.05% [2]. - The net profit attributable to shareholders was 88.64 million yuan, down 73.68% from 337 million yuan in the same period last year [2]. - The net cash flow from operating activities was 164 million yuan, a decrease of 76.12% year-on-year [2]. - The company's gross margin fell from 28.41% to 20.31%, and the net margin dropped from 11.62% to 3.24%, both declining by over 8 percentage points [2]. - The net profit after deducting non-recurring gains and losses was 43.09 million yuan, down 84.77% year-on-year [2]. - The company announced no cash dividends, stock bonuses, or capital increases from reserves [2]. - East Wu Securities has revised its profit forecast for Qiaqia Food, projecting net profits of 600 million, 1.05 billion, and 1.12 billion yuan for 2025-2027, down from previous estimates [2]. Causes of Decline - The significant drop in profit is attributed to rising costs of sunflower seeds and core nut raw materials, along with increased investments in product and channel restructuring [3]. - Adverse weather conditions, particularly continuous rain during the sunflower seed harvest in Inner Mongolia, have led to increased spoilage rates and reduced raw material availability, driving up costs [4][3]. - The prices of almonds and cashews have also risen due to supply-demand dynamics and seasonal factors [3]. Market Dynamics - Qiaqia Food's sunflower seed raw materials are primarily sourced domestically, with recent weather conditions exacerbating cost pressures [4]. - The company has faced challenges in sales, with a 13.76% revenue decline and a 67.88% drop in net profit in the first quarter of the year [4]. - Excess inventory from pre-holiday stockpiling has led to significant discounting by distributors, indicating pressure on margins [4]. Strategic Initiatives - Qiaqia Food has been actively developing new products, including unique flavors and collaborations aimed at attracting younger consumers [7][8]. - Despite these efforts, the proportion of customers under 35 has decreased from 58% to 41% over three years, indicating a potential disconnect with the target demographic [10]. - The company's management has expressed intentions to optimize operations and product structures to improve performance, though specific timelines and targets remain unclear [6].