Summary of Conference Call Notes Company Overview - Company: Anjii Food - Industry: Frozen Food Industry Key Financial Metrics - In 2024, Anjii Food achieved revenue of 15.1 billion, a year-on-year increase of 7.17% [1] - Net profit attributable to shareholders was 1.485 billion, up 0.46% [1] - Net cash flow from operating activities reached 2.104 billion, a growth of 7.85% [1] - For Q1 2025, revenue was 3.6 billion, a decline of approximately 4% year-on-year, with net profit of 395 million, down 10% [1] - Despite short-term fluctuations, the company demonstrated resilience through cost structure optimization and product strategy adjustments [1] Business Segment Performance Prepared Foods - Revenue for the prepared foods segment in 2024 was 7.839 billion, with a growth of 15.4 billion, representing a growth rate of 18%-19% [2] - The "Fresh Lock" series became a core growth driver, generating over 1.5 billion in revenue, increasing its share from 9% in 2022 to 10.5% in 2024 [2] - The upcoming launch of "Fresh Lock 6.0" in H2 2025 is expected to strengthen the company's competitive advantage in the consumer market [2] Frozen Dishes - The frozen dishes segment generated revenue of 4.35 billion in 2024, a year-on-year increase of 4.7% [3] - Key products like "Small Crispy Meat" achieved revenue of 300 million, up 50% [3] - Shrimp products maintained stable growth, while some items faced price fluctuations, with certain products seeing a price drop of over 6% despite increased sales [3] Frozen Noodles and Rice - Revenue for the frozen noodles and rice segment was nearly 2.5 billion, a decline of 3.14% year-on-year due to intensified industry competition and price drops [4] - The company plans to focus on major product strategies to enhance brand influence and customer loyalty [4] - Overall gross margin for 2024 was 23.3%, a slight increase of 0.09 percentage points [4] Strategic Adjustments and Market Positioning - In 2025, the company will adjust its product strategy: - For B-end, focus on cost-effective products and introduce high-quality mid-priced items [5] - For C-end, emphasize product upgrades and series of popular items [5] - Revenue from distributor channels reached 12.3 billion, a growth of 9% [5] - Direct sales channels saw a decline of 4%, while e-commerce channels also experienced a slight drop of 2% due to reduced sales of certain products and the closure of unprofitable e-commerce operations [5] Future Outlook - The company aims to strengthen its market share through a focus on high-end, youthful product lines and customized products for major supermarkets [6] - The competitive pressure in the industry peaked in Q4 2024, but is expected to ease in Q1 2025 as the consumer market gradually recovers [6] - Raw material costs are projected to rise, but the company is implementing measures to control cost increases effectively [7] - The dividend payout ratio increased from 30% to 70%, with a cash dividend ratio of 65%, reflecting strong profitability and financial stability [7] - The company submitted an A1 application to the Hong Kong Stock Exchange, with plans to complete the listing process by the end of June 2025 [7]

Core Viewpoint - The company reported a revenue of 15.127 billion yuan for 2024, representing a year-on-year growth of 7.70%, with a net profit of 1.485 billion yuan, a slight increase of 0.46% [1] Group 1: Financial Performance - In Q1 2025, the company achieved a revenue of 3.6 billion yuan, a decrease of 4.13% year-on-year, and a net profit of 395 million yuan, down 10.01% [1] - The company’s revenue from frozen prepared foods, frozen dishes, frozen noodles, and agricultural products was 7.839 billion, 4.349 billion, 2.465 billion, and 449 million yuan respectively, with year-on-year growth rates of 11.41%, 10.76%, -3.14%, and -11.74% [1] Group 2: Sales Channels - Revenue from distributors, supermarkets, direct sales, e-commerce, and new retail reached 12.382 billion, 827 million, 1.023 billion, 313 million, and 582 million yuan respectively, with year-on-year growth rates of 8.91%, -2.35%, -4.54%, -2.29%, and 32.97% [2] - The number of distributors increased to 2,017 by year-end, a net increase of 53 [2] - Revenue from various regions showed growth, with East China being the core market, and significant growth in Southwest, Northwest, and overseas regions [2] Group 3: Profitability Metrics - The company achieved a gross margin of 23.30% and a net margin of 9.82% in 2024, with a slight increase in gross margin but a decrease in net margin by 0.71 percentage points [3] - The expense ratio was 10.03%, an increase of 0.67 percentage points year-on-year, with specific changes in sales, management, R&D, and financial expense ratios [3] Group 4: Strategic Outlook - The company is implementing a "three-pronged" strategy to enhance its product matrix and optimize its product structure, focusing on both B2B and B2C channels [4] - The company signed a share acquisition agreement with Dingwei Thai, marking a transition from a frozen food leader to a comprehensive dining solution provider [4] - Revenue projections for 2025-2027 are 16.068 billion, 17.498 billion, and 19.677 billion yuan, with net profits of 1.618 billion, 1.778 billion, and 2.038 billion yuan respectively [4] Group 5: Valuation Metrics - The company’s price-to-earnings ratios are projected at 13.96, 12.70, and 11.08 for the years 2025, 2026, and 2027 [5]