Summary of the Conference Call for LuSi Co., Ltd. Company Overview - **Company**: LuSi Co., Ltd. - **Date**: October 28, 2025 Key Points Financial Performance - **Net Profit**: For the first three quarters, net profit decreased by 33.8% to 16.32 million yuan [2][3] - **Revenue**: Total revenue for the first three quarters was 618 million yuan, a year-on-year increase of 7.6% [3] - **Quarterly Performance**: In Q3 alone, revenue was 228 million yuan, up 1.8%, while net profit was 16.32 million yuan, down 33.8% [3] Product Revenue and Growth - **Main Grain Products**: Revenue reached approximately 86.3 million yuan, a growth of 30.6% [4] - **Canned Products**: Revenue increased by 44% to 55 million yuan [4] - **Meat Jerky**: Revenue remained stable at around 360 million yuan [4] - **Meat Powder**: Revenue was 83.6 million yuan, with a slight increase of 1.1% [4] - **Pet Food**: Domestic sales reached approximately 144 million yuan, with online direct sales contributing about 60 million yuan, accounting for 41.7% of total revenue [4][18] Market Dynamics - **Domestic Market**: The domestic main grain business is expected to reach 100 to 130 million yuan for the year, with a planned growth of around 50% next year [2][6] - **Export Performance**: Exports of main grain products were close to 17 million yuan, showing a growth of over 50% [2][6] - **Price Fluctuations**: The meat powder business experienced significant price drops, with Q3 prices averaging 6.90 yuan per kg compared to 7.64 yuan per kg last year [11] Regional Market Insights - **Germany**: Orders remained stable, but revenue declined due to changes in product structure, with average prices dropping from 54.56 yuan to 52.78 yuan [13] - **Russia**: Strong performance with revenue exceeding 71 million yuan, showing significant growth and higher gross margins than overall export levels [14] - **United States**: Strong demand, with exports reaching over 58 million yuan, but impacted by tariffs due to production shifts to Cambodia [15] Operational Challenges - **Cambodia Factory**: Currently operating at a loss due to high raw material costs, which account for 70-80% of total costs. The factory needs to reach 50-60 million yuan in revenue to break even [16] - **Production Capacity**: Plans to expand production capacity once utilization reaches 80% [17] Future Outlook - **Meat Powder Focus**: The company anticipates no significant growth in meat powder revenue by 2026, shifting focus towards pet food [11] - **Gross Margin Trends**: Q3 gross margins declined due to export and domestic sales pressures, but improvements are expected in the main grain segment [20] Additional Insights - **Brand Development**: The Miaoguan brand achieved sales of 5-6 million yuan, targeting a young, price-sensitive demographic [8] - **Sales Channels**: Online sales are significant, with a notable contribution from platforms like Tmall and JD, while offline sales rely heavily on city agents [18] This summary encapsulates the key financial metrics, product performance, market dynamics, operational challenges, and future outlook for LuSi Co., Ltd.

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company achieved a revenue of 391 million yuan in H1 2025, representing a year-on-year growth of 11.32%. However, the net profit attributable to the parent company was 30.46 million yuan, down 12.07% year-on-year. The gross margin decreased to 20.86% from 22.36% in H1 2024 due to the ramp-up of production capacity in the Cambodian subsidiary. The profit forecasts for 2025-2027 have been adjusted downwards, with expected net profits of 80 million, 97 million, and 117 million yuan respectively, corresponding to EPS of 0.78, 0.94, and 1.13 yuan per share. The current PE ratios are 27.7, 22.9, and 19.0 times for the respective years. The company is optimistic about the potential of its staple food products and the new brand to enhance market coverage [5][6]. Financial Performance Summary - In H1 2025, domestic sales revenue was 145 million yuan, a slight decline of 0.06%, primarily due to a 9.72% decrease in meat powder revenue. However, pet food domestic sales grew by 5.42%, with staple food sales increasing by 25.06%. The company’s export revenue reached 246 million yuan, up 19.25% year-on-year, with significant growth in jerky, canned food, and staple food products. The gross margin for exports decreased by 1.66 percentage points, while domestic gross margin fell by 2.45 percentage points [6]. Brand Development - The company launched a new brand "Miaoguan" in H1 2025, focusing on high cost-performance products. The existing "Lusi" brand continues to innovate and upgrade to higher value-added product lines. The dual-brand strategy enhances the product matrix and improves the company's ability to target different market segments [7].