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Caixin reported on August 28th (Reporter: Wu Weiling) The rapid growth of the Douyin platform combined with the construction of an independent supply chain, three squirrels inc. (300783.SH) achieved double revenue and net profit growth in the first half of the year. Pan Daowei, the secretary of the board of directors, introduced that the company is currently continuing to build its supply chain, and it is expected that a considerable proportion of nuts and snacks will be independently produced in the future.

After the market closed today, three squirrels inc. announced that the company's revenue in the first half of the year reached 5.075 billion yuan, a year-on-year increase of 75.39%; the net profit attributable to the parent company was 0.29 billion yuan, a year-on-year increase of 88.57%; the non-GAAP net profit attributable to the parent company was 0.228 billion yuan, a year-on-year increase of 211.79%. In conjunction with the company's previously announced stock-based incentive plan, this year's performance targets were set as follows: total revenue including tax to reach 11.5 billion yuan, and net income to reach 0.4 billion yuan. The full-year net income target has been achieved over half.

Behind the increase in revenue, Douyin deserves credit. Pan Daowei stated in his personal short video account today that the company's revenue increased by nearly 2.2 billion compared to the same period last year, with short video e-commerce contributing nearly 1 billion of the increase, accounting for over 40% of the total increase.

According to the financial report, in the first half of the year, the Douyin channel achieved revenue of 1.224 billion yuan, a year-on-year increase of 180.73%. In addition, revenue from the Tmall and jd.com channels increased by 28.32% and 20.33% respectively. In terms of offline sales, the overall distribution business generated revenue of 0.669 billion yuan, revenue from national snack shops was 0.175 billion yuan, and revenue from existing store types totaled 0.055 billion yuan.

Three squirrels inc. stated that short video e-commerce is positioned as the 'new category engine', and the company proactively created a variety of popular products such as bulk mango dried fruit and quail eggs. However, it is worth noting that the company's promotion and platform fees are also growing rapidly. In the first half of the year, sales expenses increased by 79.37%, with promotional and platform service fees reaching 0.607 billion yuan, a year-on-year increase of 97.76%.

Regarding profitability, Pan Daowei explained that in the first half of the year, the company's non-GAAP net margin increased from 2.53% to 4.50%, with the product gross margin increasing by nearly one percentage point, mainly due to the direct procurement of nut products at the source and the independent supply chain, and another point coming from the decrease in management fee rate.

Pan Daowei also looks forward and says that in terms of supply chain construction, the company's one product, one chain, will continue to upgrade. In addition to the nut industry park in Wuwei District, the company is also planning a snack industry park in Yijiang, Wuhu, and it is expected that three factories will be put into operation in December of this year. By 2025, the company will have two major categories of production and manufacturing bases, with a considerable proportion of nuts and snacks, all of which will be independently produced.