\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 83 Three Squirrels Inc(300783) )
Event: Three Squirrels Inc(300783) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the annual operating income was 9.77 billion yuan, a year-on-year increase of – 0.24%, and the net profit attributable to the parent company was 411 million yuan, a year-on-year increase of + 36.43%; 21q4 achieved an operating revenue of 2.7 billion yuan, a year-on-year increase of + 5.36%, and a net profit attributable to the parent company of -31 million yuan, a year-on-year increase of -184.05%. 22q1 achieved an operating revenue of 3.089 billion yuan, a year-on-year increase of – 15.85%, and a net profit attributable to the parent company of 161 million yuan, a year-on-year increase of – 48.75%.
Online performance is under pressure, and the proportion of offline is increased. In 2021, the company’s revenue was – 0.24% year-on-year, mainly due to the decline of traditional e-commerce channel revenue and the slowdown of offline store business growth under the influence of traffic differentiation and repeated epidemic. Online channels: in 2021, online revenue reached 6.479 billion yuan, a year-on-year increase of – 10.39%. Among them, the revenue of tmall / jd.com in 2021 was RMB 2.956/2.408 billion respectively, with a year-on-year increase of – 22.32% / – 11.84%. Offline channels: in 2021, the offline revenue reached 3.291 billion yuan, a year-on-year increase of + 28.39%, and the proportion of offline revenue increased to 33.69%, a year-on-year increase of + 7.51pct. Among them, 1) the income of investment restaurants was 818 million yuan, a year-on-year increase of – 6.39%. By the end of 2021, the number of stores was 140, a net decrease of 31. 2) The revenue of alliance stores was 749 million yuan, a year-on-year increase of + 63.3%, and the number of stores increased by 53 to 925. 3) The revenue from new distribution channels was 1.609 billion yuan, a year-on-year increase of + 38.16%. Since 21h1, the company has focused on the layout of offline business, and officially distributed goods to the national distribution terminals in December 21. By the end of 2021, the company’s distribution business had achieved a revenue of 437 million yuan, and the number of dealers was 292. 22q1 revenue was – 15.85% year-on-year, mainly due to 1) the early impact of the Spring Festival peak season on Q1 revenue; 2) With the intensification of online competition and the impact of the epidemic, some regional logistics were suspended and online business sales fell; 3) Offline companies took the initiative to terminate some extensive distribution businesses. At the same time, the epidemic led to the phased closure of more than 400 stores and a decline in sales revenue.
Focus on nut strategy and narrow the loss of sub brands. In terms of products, the annual revenue of nuts / baking / meat products / dried fruits / comprehensive in 2021 was RMB 5.058/16.29/10.43/6.02/1.237 billion respectively, with a year-on-year increase of + 4.33% / + 0.73% / – 19.60% / – 22.13% / + 7.74%. The company promoted the strategy of “focusing on nuts”, and the proportion of nuts increased to 51.77%, with a year-on-year increase of + 2.27pct. In 2021, the omni-channel sales of the sub brand Xiaolu blue exceeded 550 million yuan, the sales scale increased steadily, the input-output ratio increased quarter by quarter, and the loss of 21h2 narrowed to close to break even in December.
In the 21st year, the scale effect led to the increase of gross profit, and the increase of 22q1 fee investment affected the short-term profit. 1) The gross profit margin in 2021 was 29.38%, with a year-on-year increase of + 5.49 PCT, mainly due to the scale effect of nut categories and the optimization of costs under the unified collection strategy (nut gross profit margin + 6.86 PCT year-on-year). The sales expense rate in 2021 was 21.26%, with a year-on-year increase of + 3.73 PCT, mainly due to the company’s increased promotion efforts, in which the platform service and promotion rate were + 3.77 PCT year-on-year; The rate of administrative expenses was 2.91%, with a year-on-year increase of + 0.64pct, mainly due to the increase of share based payment expenses. Overall, the net interest rate reached 4.21% in 2021, a year-on-year increase of + 1.13pct. 2) The gross profit margin of 2022q1 company was 29.56%, with a year-on-year increase of -1.84pct, mainly due to the decline in the gross profit margin of main products caused by the rise in the price of some raw materials. The company increased the cost of advertising, and the advertising cost exceeded 100 million yuan; The sales expense rate and management expense rate were 22.10% / 1.72% respectively, with a year-on-year increase of + 3.88 / + 0.02pct. The net interest rate of 2022q1 company was 5.23%, with a year-on-year increase of -3.35pct.
Profit forecast, valuation and rating: the company is in the early stage of strategic adjustment and has a large investment in resources. The net profit forecast for 22 / 23 years was lowered to 362 / 420 million yuan (down 38.7% / 42.2%), and the net profit forecast for 24 years was 491 million yuan, equivalent to 0.90/1.05/1.22 yuan of EPS from 2022 to 2024. The corresponding P / E of the current stock price is 27x / 23x / 20x respectively. Considering the favorable long-term development of the company’s transformation, the “overweight” rating is maintained.
Risk tip: the increase of traffic entrance, the increase of customer acquisition cost is higher than expected, and the offline business development is lower than expected.
