Core Viewpoint - The company reported a significant decline in gross margin and revenue for Q1 2025, primarily due to rising raw material costs and the timing of the Spring Festival affecting sales performance [1][17][20]. Group 1: Financial Performance - The gross margin for Q1 2025 dropped to 19.5%, a historical low compared to the usual range of 28-31% [1][4][17]. - Revenue decreased from 1.82 billion to 1.57 billion, a decline of 13.7% year-on-year, attributed to both industry-wide issues and specific company challenges [1][17][20]. - Short-term borrowings increased from 850 million to 1.15 billion, primarily for raw material procurement and seasonal inventory buildup [1]. Group 2: Raw Material Costs - The decline in gross margin was mainly due to increased procurement costs for sunflower seeds and certain nut raw materials [1][4][17]. - The company plans to optimize its sunflower seed procurement model and increase the proportion of direct sourcing [1][28][89]. Group 3: Product Development and Innovation - The company is actively promoting new products, including various types of sunflower seeds and flavored nuts, as well as expanding into new categories like potato chips and nut milk [1][19][28]. - A new ice cream product made from sunflower seeds is expected to launch in June [1][19]. Group 4: Market Strategy - The company is focusing on enhancing its online sales channels, particularly through platforms like Douyin, and is increasing collaboration with influencers to boost product visibility [6][77]. - The company aims to deepen its market penetration in Southeast Asia while also exploring opportunities in the U.S. market [8][86]. Group 5: Shareholder Engagement - The company has initiated a share buyback program with a total planned expenditure between 40 million and 80 million RMB, having repurchased approximately 944,592 shares for about 25.28 million RMB as of April 30, 2025 [3][9][57]. - The management is committed to improving investor confidence through various measures, including share buybacks and maintaining stable dividends [7][36].

Group 1: Financial Performance - In 2024, the revenue was 7.131 billion yuan, with a significant gap from the target of 10 billion yuan set for 2020 [4] - In Q1 2025, the gross margin dropped to 19.5%, a decrease of 10.97 percentage points year-on-year [4][27] - The revenue in Q1 2025 decreased by 13.7% compared to the previous year, attributed to rising sunflower seed costs and the timing of the Spring Festival [27][100] Group 2: Product Development and Innovation - The company plans to increase investment in R&D, focusing on raw material varieties, process improvements, and new product development [3][4] - In 2024, the R&D expense ratio was only 1%, significantly lower than competitors like Three Squirrels [4][23] - New product launches include flavored nuts, fresh-cut fries, and ice cream products, with a focus on health and nutrition trends [20][21][24] Group 3: Market Strategy and Expansion - The company aims to diversify its product offerings beyond sunflower seeds and nuts, exploring functional foods and healthy snacks [2][3] - Overseas revenue accounted for 7.98% of total revenue in 2024, primarily from Southeast Asia, with plans to expand into the European and American markets [4][5] - The company is enhancing its digital marketing efforts, particularly on platforms like Douyin, to engage younger consumers [5][21] Group 4: Supply Chain and Cost Management - The company has faced challenges with rising raw material costs, particularly for sunflower seeds, and is optimizing its procurement strategy [4][27] - Inventory levels increased by 22.9% year-on-year in 2024, indicating potential issues with channel sales [4] - The company is implementing long-term procurement agreements to stabilize raw material prices [4][5] Group 5: Shareholder Engagement and Stock Performance - The company has initiated a share buyback plan, with 944,592 shares repurchased for approximately 25.28 million yuan as of April 30, 2025 [13][27] - Despite ongoing buyback efforts, the stock price has continued to decline, raising concerns among investors [4][27] - The management is focused on improving investor confidence through strategic initiatives and transparent communication [4][27]