Incident: The company released its 2024 quarterly report. In 24Q1, it achieved revenue of 3,646 billion yuan, a year-on-year increase of 91.83%, and realized net profit attributable to mother of 308 million yuan, an increase of 60.80% over the previous year, and realized net profit after deduction of 263 million yuan, an increase of 92.84% over the previous year. Overall, the 24Q1 company achieved excellent performance in terms of both revenue and profit growth, and the performance exceeded market expectations.
Our analysis and judgment:
1. Product side: The high-end cost performance strategy continues to lead, and the one-product, one-chain system lays out the terminal product 24Q1. The company continues to take “one product, one chain” as the core to achieve total cost leadership, continue to consolidate the main nut category with a global perspective, and focus on selecting a batch of large snack products to achieve one product, one chain. During the New Year's Festival, the company's main smart gift packages were sold on all channels, helping to achieve a double increase in revenue and profit. Guided by the overall strategy of “high-end cost performance”, the new “one product, one chain” supply system ensures that terminal products are more cost-effective, but the gross margin of core categories remains stable. At the same time, the company has further stabilized the leading position of the nut category in the market segment, focused on the transformation and upgrading of large snack items, fully exploited the balance between emerging channels and emerging categories, and successfully created a number of large single products through full-link optimization and other methods.
2. Channel side: With “Dou+N” as the core, we have built an omni-channel operation capability of 24Q1. With the “Dou+N” strategy, the company significantly increased the revenue and share of the short video business, with revenue exceeding 1 billion yuan in a single quarter, driving overall revenue growth. In the short video channel, the company has established a mature e-commerce ecosystem, including the three core business operations capabilities of talent distribution, live streaming, and shopping malls. In terms of distribution channels, the company has established a three-section gift channel matrix, while continuously expanding the regional sales network for Japanese products. Currently, it has covered more than 100,000 high-efficiency terminals. At the same time, in the company's own brand community snack shop business, the company has formed a mature single-store operation model and is still continuously improving operational efficiency.
3. Investment advice: We expect that as the company continues to implement the main strategy of “high-end cost performance”, strengthen core products through the “one product, one chain” strategy, and strengthen omnichannel with “Shake+N” collaboration as the core, the company's product sales in all categories are expected to maintain a high 24Q1 growth trend and push the company's revenue back to 10 billion in 24 years. Considering the company's performance exceeding expectations, we raised the company's net profit from 24-26 to 3.7/50/ 650 million yuan (previous value was 3.7/47/550 million yuan), yoy +69.5%/34.2%/30.1%, corresponding to the current PE of 25X/18X/14X, respectively, maintaining the “buy” rating.
Risk warning: risk of raw material price fluctuations, risk of channel reform falling short of expectations, risk of increased industry competition.