\u3000\u30 Beijing Zznode Technologies Co.Ltd(003007) 83 Three Squirrels Inc(300783) )
Three Squirrels Inc(300783) 2021 annual report and the first quarterly report of 2022: in 2021, the company achieved a revenue of 9.77 billion yuan, a year-on-year increase of – 0.2%, a net profit attributable to the parent company of 410 million yuan, a year-on-year increase of 36.4%, and a deduction of non attributable net profit of 320 million yuan, a year-on-year increase of + 31.0%. In the first quarter of 2022, the revenue was 3.09 billion yuan, a year-on-year increase of – 15.9%, the net profit attributable to the parent was 160 million yuan, a year-on-year increase of – 48.8%, and the net profit not attributable to the parent was 120 million yuan, a year-on-year decrease of – 57.4%. It is proposed to pay a dividend of 2.2 yuan for every 10 shares.
In the 21st year, the revenue basically maintained stable development, and the contribution of alliance stores and regional distribution increased. In 2021, the company achieved a revenue of 9.77 billion yuan, a year-on-year increase of – 0.2%, of which Q1-Q4 were + 7.6% / – 13.6% / – 8.6% / + 5.4% year-on-year respectively, and Q4 improved month on month, mainly due to the strong demand for gifts during the annual goods Festival and the contribution of offline regional distribution. In 2021, the company further expanded its layout in global channels. The third-party e-commerce / new distribution / stores achieved revenue of RMB 6.48/16.1/1.57 billion respectively, of which Taoxi / JD realized revenue of RMB 2.96/2.41 billion respectively. Affected by the online centralization, Taoxi / JD’s revenue was – 22.3% / – 11.8% year-on-year respectively. The company actively expanded the marketing supplement increment of new platforms such as live e-commerce. The investment restaurants / alliance stores achieved RMB 820 million / 750 million respectively, with a year-on-year increase of – 6.4% / + 63.3% respectively. In 2021, there were – 31 / + 53 investment restaurants / alliance stores respectively, reaching 140 / 925 at the end of the year. With regional distributors as the core and supplemented by platform distribution and new channel business, the company launched regional distribution and investment promotion in October and distributed goods to the national market through nut gifts during the annual cargo festival in December, with a regional distribution revenue of 440 million yuan. The main brand Three Squirrels Inc(300783) and baby snack deer blue achieved revenue of 9.24 billion yuan and 490 million yuan respectively. Squirrels focus more on nuts while developing multiple categories. In 2021, nuts achieved a revenue of 5.06 billion yuan, accounting for 51.8%, year-on-year + 4.3%, and baking / meat products / dried fruits / comprehensive categories accounted for 16.7% / 10.7% / 6.2% / 12.7% respectively. In 2022, Q1 company achieved a revenue of 3.09 billion yuan, a year-on-year increase of – 15.9%. The main reasons for the decline in revenue are as follows: 1) the Spring Festival is out of date, and the preparation cycle before the festival is shortened accordingly; 2) Online decentralization has increased the cost of traffic, and the company has correspondingly reduced the delivery of online drainage. At the same time, the epidemic has affected the logistics delivery in East China; 3) Offline is in the stage of strategic adjustment, superimposing the impact of the epidemic, and more than 400 stores have been closed in stages.
In the past 21 years, the profit orientation has been effective, and the high base and increased marketing efforts have affected the profit of 22q1. In 2021, the company realized a net profit attributable to the parent company of 410 million yuan, a year-on-year increase of + 36.4%. After the company turned to profit orientation, it effectively improved cost control and supply chain efficiency. In the second half of the year, it strengthened brand building, which affected the profit performance to a certain extent. In 2022, Q1 realized a net profit attributable to the parent company of 160 million yuan, a year-on-year increase of – 48.8%, and the short-term profit decreased. The main reasons are as follows: 1) last year, Q1 company was profit oriented, streamlined expenses and released profit space; 2) The price of some bulk raw materials rose, pushing up costs; 3) Q1 continued to put in publicity expenses and increased incentive expenses by 15 million yuan. Gross profit margin: in 2021, the company’s gross profit margin was 29.4%, year-on-year + 5.5pct, online / offline gross profit margin was 30.7% / 26.8%, year-on-year + 6.4 / + 3.9pct, nut / baking / meat products gross profit margin was 29.1% / 27.3% / 27.9%, year-on-year + 6.9 / + 4.0 / + 4.9pct, respectively. The increase of gross profit margin of core categories effectively drives the growth of overall gross profit margin, and is expected to guide the industry to develop in a more benign direction. The gross profit margin in 2022q1 was 29.6%, a slight decrease of 1.8pct year-on-year. Period expense rate: in 2021, the company’s period expense rate was 24.8%, with a year-on-year increase of + 4.6pct, of which the sales / management / R & D / financial expense rate was 21.2% / 2.9% / 0.6% / 0.1% respectively, with a year-on-year increase of + 3.7 / + 0.6 / + 0.1 / + 0.2pct respectively. During 2022q1, the expense rate was 24.2%, year-on-year + 3.8pct, of which the sales expense rate was 22.1%, year-on-year + 3.9pct, mainly due to the company’s increased marketing and promotion efforts. Net interest rate: in 2021, the company’s net interest rate was 4.2%, year-on-year + 1.1pct, and in 2022q1, the net interest rate was 5.2%, year-on-year -3.4pct, mainly due to the high base in Q1 last year and the company’s increased marketing efforts.
Comprehensively transform and upgrade, focus on the nut industry chain, and move towards the stage of multi brand and omni channel development. At the product level, squirrels have changed from the coordinated and balanced development of the whole category in the past to the stage of focusing on nut categories and multi brand layout, and will continue to reduce SKUs and focus on potential single products. Squirrels have experienced scale expansion supported by multiple categories and cultivated advantageous single products. Streamlining SKUs and realizing large-scale operation are also in line with the current development stage. At the channel level, from e-commerce to global development, actively expand the layout of offline regional distribution, and realize a broader and more intensive distribution network. For the store system, we will vigorously shut down stores with poor positioning and performance, pay more attention to the profitability of single stores, and achieve long-term high-quality development. At the same time, the channel layout of live broadcast e-commerce and content e-commerce will be further increased. In the future, the e-commerce business unit and distribution business unit will jointly drive the company’s global development. At the supply chain level, the company will further promote the integration of primary, secondary and tertiary industries. Through the alliance factory to achieve upstream penetration, control the product quality, and is expected to further increase the gross profit space. Promote the planting of nuts in China and establish procurement advantages. Realize the layout of the whole industrial chain from raw material planting, processing and production to terminal sales. The company has carried out all-round transformation and upgrading, and the overall performance is expected. Although optimizing SKU and adjusting stores may affect the short-term performance, it is good for the long-term high-quality development.
Investment suggestion: it is estimated that the company will realize revenue of RMB 9.43/10.7/12.61 billion from 2022 to 2024, with a year-on-year increase of – 3.5% / + 13.5% / + 17.8%; The net profit attributable to the parent company was RMB 390 / 540 / 660 million, a year-on-year increase of – 4.7% / + 37.3% / + 23.3%, EPS was RMB 0.98/1.34/1.65 respectively, and the corresponding PE was 25 / 18 / 15x respectively. Considering that the company carries out comprehensive transformation and upgrading, establishes a multi brand matrix, promotes omni-channel development, and has sufficient growth potential in the future, the “recommended” rating is maintained.
Risk tips: market expansion is less than expected, new brand incubation is less than expected, raw material price fluctuation risk, food safety risk, etc.
