The company released the 24H1 performance forecast, with 24H1 revenue of 108 to 11.2 billions/ +487% to 505%, net profit of 0.8 million to 1.2 million/ loss of 5.57 million for the same period last year; net loss of 330 to 2.2 million/ loss of 8.77 million for the same period last year. 24Q2 snack sales revenue was about 58 to 6.3 billions/ +317% to 353%. Excluding stock payments, the net profit of mass-selling snacks was 1.53 to 0.177 billion/ loss of 0.03 billion in the same period last year, and the net interest rate was about 2.63% to 2.8%/-2.2% in the same period last year, continuing to increase by about 0.2 pct compared to 2.5% in 24Q1. The mass sale of snacks is currently growing rapidly, and the industry share is rapidly concentrated at the top; the company is leading in multiple dimensions such as team, supply chain, warehousing, and expansion, and its leading position is stable. It is expected that its share will continue to increase, and profits will gradually be realized. Maintain a “Highly Recommended” rating.

Revenue from mass snack sales grew rapidly, and net interest rates continued to rise month-on-month. 24H1 achieved revenue of 108 to 11.2 billions/ +487% to 505%, net profit of 0.8 million-1.2 million/ loss of 5.57 million for the same period last year; net loss of 3.3-2.2 million/ loss of 8.77 million for the same period last year. By business, 1) Mass-selling snacks: The 24H1 mass-selling snack business achieved revenue of 10.5-11 billions/ +439% to 465%, achieving net profit estimated at 0.27-0.294 billion, with a net interest rate of about 2.57% -2.67%. The mass snack business continued to maintain rapid growth, and the net interest rate continued to increase month-on-month. 2) Edible fungi: Prices of major products such as enoki mushrooms dropped significantly during the reporting period due to market changes and factors such as Q2 being off-season. According to the company's past business data, Q2 was often a low profit point for the company's edible fungus business, and it is expected that the profit situation will improve in the second half of the year.

High-speed snack sales opened 24Q2, and the average revenue trend of a single store was positive compared to the same period last month. 24Q2's revenue from mass-selling snacks was about 58 to 6.3 billions/ +317% to 353%. Excluding stock payments, net profit of mass-selling snacks was 1.53 to 0.177 billion/ loss of 0.03 billion in the same period last year, with a net interest rate of about 2.63% to 2.8%/-2.2% in the same period last year, continuing to increase by about 0.2 pct compared to 2.5% in 24Q1. It is expected that the company's net interest rate will continue to increase month-on-month as the company grows in size. According to our map caliber tracking, the company's net increase in Q2 stores reached 2k+, with a net monthly net increase of 800+ stores in May and June; the net increase in the number of stores on the company's 24Q2 reporting terminal is expected to be about 1.5k-2k to about 6-7k. According to our estimates, the average monthly revenue of a single store on the company's reporting side increased by about a single digit year on year and about a single digit month-on-month increase; the company's store efficiency continued to improve with the optimization of the company's pallet and operation, new store climbing, and the share of large stores.

Investment advice. The mass snack industry continues to grow rapidly, and the industry share is rapidly concentrated; the company's leading position in mass snack sales is stable, the team is high-quality, leading in multiple dimensions such as supply chain, warehousing, expansion, and brand. On the basis of the current high market share, it is expected that its share will continue to increase in the future, and profitability is highly flexible under a strong industrial chain position. Furthermore, the company's withdrawal of minority shares in the medium term will also continue to open up market capitalization space. The company's 2024E/25E/26E net profit is expected to be 0.2/0.43/0.61 billion, respectively, maintaining the “Highly Recommended” rating.

Risk warning: store expansion falls short of expectations, industry competition intensifies, food safety risks, etc.