Company: jujube leader, set sail again. The company has ploughed the jujube industry for more than 30 years, the products have extended from high-end nourishment to public consumption, and the scene has expanded from gifts to home leisure. 1) products: the company focuses on the brand positioning of "high-end dates miss you so much" and creates a healthy product matrix of "red dates + lock fresh + nourishing", covering many scenes such as high-end gifts to public consumption. The company has hundreds of SKU and no absolute large items. Considering the seasonality of gift scenes and the intensification of competition, how to create a "popular single product" under the existing brand positioning and product matrix is the core problem that needs to be solved. We believe that the new product represented by Red Pie in 2023 will be an important board axe for the company to break the situation. 2) Channel: the company's channel has undergone many rounds of adjustment, with specialty stores as the main channel in the early stage, and joined hands with Baicaowei to welcome the Internet dividend era in 2016. In 2020, Baicaowei will be sold to Baihou company around the "red jujube + food and medicine homology" as the core health food, through online and offline two-wheel drive to accelerate its layout and development in all channels. We believe that under the gradual improvement of the product matrix, there is a wide space for the extension gap of the company, and how to make the new deployment of omni-channel is the core for the company to get rid of the growth trap from the medium-term perspective.

Industry: snack market, new channel opportunities. 1) in terms of category, the broad perspective is on the market of hundreds of billions of dried fruit preserves, in which "Jujube Ren School" is a best-selling innovative product. According to market feedback, only half of the dried candied fruit consumers have been exposed to such products, and the purchase frequency is mostly concentrated in 2-3 times a month, which has room for improvement from many dimensions, such as customer penetration and repurchase promotion. 2) on the channel, we dismantled the current omni-channel structural characteristics and development stage of snack food in the omni-channel deconstruction of snack food released in December 2022. Among them, from top to bottom, look at high-end member stores represented by Sam, convenience stores represented by Meiyijia and the whole family, discount stores represented by busy snacks, and content e-commerce represented by Douyin and Kuaishou Technology. All of them are the core channels with the highest speed of development at present.

At present, the company has actively expanded new channels, followed by full-channel polishing of large items, to improve the overall capacity utilization of the company, from quantitative change to qualitative change.

Opportunity: the predicament is reversed and ready to go. The company's cost is closely related to the price of red jujube. The impairment in 2022 affects profits. In 2023, considering the recovery of demand and the improvement of the macro environment, gross profit margin is expected to stabilize and pick up. From the perspective of expense rate disassembly, the per capita income of the company is relatively low after being separated from Baicaowei. Publicity expenses, employee compensation and depreciation amortization are the main influencing variables, and there is room for optimization compared with the same industry. In terms of assets, the company has plenty of cash on hand after the sale of Baicaowei, and there is broad room for extension under the recovery of the macro environment.

Profit forecast and investment advice. We believe that the core in 2023 is the increase in the proportion of new products breaking the circle to achieve leisure scenarios, and 2024 is the realization of channel transformation, which is expected to gradually release profits after the smooth adjustment of products and channels. We estimate that the income from 2023 to 2025 will be RMB 1.991 billion, compared with the same period last year, the net profit will be RMB 0.31 billion, and the current stock price will be RMB 1.91 billion, respectively. The current stock price will be rated as "overweight" for the first time, corresponding to PE of 127shock, 18x, and 0.8x respectively.

Risk tips: macro-environmental disturbance, new products and new channels are not as expected, reform and transformation are not as expected, and industry competition is intensified.