I miss you so much: the leading domestic jujube, stable equity structure, and performance is picking up. Entered the market with red dates and their processed products as the core products, focusing on R&D, production and sales of health foods. The shareholding structure has been stable for a long time. The 2023 employee shareholding incentive plan was implemented, and the amount after deducting the operating income for the same year increased by 34.72% compared to 2022. Due to multiple factors, revenue and profit have fluctuated greatly in recent years. They bottomed out in 2022 and resumed growth in 2023. Jujube and related products are the main revenue source products, and the revenue CAGR reached +15.57% in 2019-2023. The overall profit quality is in the middle and downstream of the industry, and there is huge room for improvement.

Dried fruit compote: The competitive pattern of the industry is scattered, mixed products have become a new selling point, and the jujube seed pie stands out. Dried fruit compote products occupy an important position in snack foods. The market size of dried fruit compote products in China reached 146.2 billion yuan in 2023, and the compound growth rate reached 24.0% in 2019-2023. The entry threshold for the dried fruit compote industry is relatively low. There are many well-known brands in the market. Most brands have a market share of less than 10%, and the industry concentration is low. Compound dried fruit compote products are integrated to innovate product formulation and taste to meet consumers' health needs. Among them, zao kernel pie stands out for its natural ingredients and innovative forms, and has become a popular product in the industry.

Brand influence is gradually expanding, and product development and channel reform go hand in hand. 1) Brand: In 2023, the advertising fee was 0.135 billion yuan, and the brand value reached 15.4 billion yuan, continuously improving the high-quality and high-value brand cultural content. 2) Product: Focusing on the hyperbolic product matrix of “red jujube+healthy fresh food”, we are committed to building Red Xiaopai's big single product business and adopting the strategy of “independent development+cooperative research and development”. 3) Channel: Fully launch the omni-channel strategic layout, with offline exclusive sales revenue of 0.397 billion yuan, accounting for 22.99%, supermarket channel revenue of 0.045 billion yuan, accounting for 2.62%, snack channel revenue of 0.055 billion yuan, accounting for 3.21%, e-commerce revenue accounting for 32.85% of revenue. Future investment highlights: 1) Category innovation and profit curve, big single pin, red, small business development. Implement strategic changes and accelerate product updates. The Big Pin Red Company is growing rapidly. Revenue exceeded 0.2 billion yuan in 2023, and revenue is expected to reach more than 0.3 billion in 2024. 2) There is plenty of room to improve profit quality, and profit flexibility needs to be unlocked. There is still plenty of room for improvement in profit quality. Revenue in 2024 will maintain a fast and relatively stable growth rate, and it is expected that the profit target of no less than 30 million will be achieved. 3) Establish an omni-channel strategic layout, and retail channels are developing rapidly. The retail business covers omni-channel sales networks such as specialty stores, e-commerce, supermarkets, and exports. It has entered platforms such as e-commerce, snack sales, and large-scale supermarkets, covering more than 0.015 million terminal snack sales outlets, and the number of retail channel product SKUs already on the market is 13.

Investment advice: The company's EPS is expected to be 0.08/0.15/0.26 yuan in 2024-2026, respectively. The current stock price corresponds to PE of 66X/34X/20X, which is covered for the first time and gives a “buy” rating.

Risk warning: food safety issues; industry competition intensifies; new product growth falls short of expectations