Three squirrels (300783), the "first stock of Internet leisure snacks", disclosed the annual report of 2021 on the evening of April 22. Last year, they realized an operating revenue of 9.77 billion yuan, a year-on-year decrease of 0.24%; The net profit was 411 million yuan, a year-on-year increase of 36.43%; The basic earnings per share is 1.03 yuan, and the cash dividend of 2.20 yuan (including tax) is distributed for every 10 shares. Three squirrels said that the snack food market was greatly affected in 2021 due to the adverse effects of repeated outbreaks and continuous flow differentiation. In this context, the revenue of the three squirrels decreased slightly, but the profit growth accelerated year-on-year, the profitability continued to improve, and basically achieved a stable ending of the whole year. The first quarter report of 2022 released on the same day showed that the operating revenue of three squirrels in the first quarter of this year was 3.089 billion yuan, a year-on-year decrease of 15.85%; The net profit was 161 million yuan, a year-on-year decrease of 48.75%; The basic earnings per share is 0.12 yuan. Last year, the strategy of "focusing on nuts" was clarified Superimposed on the impact of repeated outbreaks and continuous differentiation of traffic, the three squirrels achieved a nut category revenue of 5.058 billion yuan last year, with a year-on-year increase of 4.33%, and the proportion of categories further increased. The sub brand "deer blue" focused on baby snacks. During the reporting period, the sales scale increased steadily, the input-output ratio increased quarter by quarter, and the loss in the second half of 2021 gradually narrowed to close to the break even in December. Last year, the operating income of the three squirrels was 9.77 billion yuan, a slight decrease of 0.24% year-on-year; The net profit was 411 million yuan, a year-on-year increase of 36.43%. The continuous impact of traffic differentiation and repeated epidemics has led to the decline of traditional e-commerce revenue and the slowdown of store business growth. The three squirrels have made clear the main strategy of "focusing on nuts", effectively improved the brand strength and product strength through measures such as mental transmission, trend innovation, product upgrading and strict quality control, and driven the growth of core nut categories; Comprehensively layout the offline distribution market, enter the offline mainstream channels with a medium distribution mode, bring new growth, and lay a solid foundation for offline growth in the future. In terms of profit growth, in the first half of last year, three squirrels achieved significant profit growth through omni-channel cost control and improvement of supply chain efficiency; The investment of RMB 100 million in the first half of last year will drive the long-term growth of the main brand, but it will have a certain impact on the short-term performance of the main brand in the second half of last year. Photo: Huang Jianbo After years of development, at present, the number of fans in three squirrel Amoy stores has reached 45.11 million, and the number of fans in Jingdong stores has reached 66.32 million. The number of fans ranks first in the snack category, leading the list of fans in the leisure food industry. With the help of national brand potential, three-dimensional sales channels covering e-commerce, distribution and stores have been formed. In 2021, the company's omni-channel sales revenue was 9.77 billion yuan. Specifically, in terms of online channels, the operating revenue of the three squirrels' third-party e-commerce platforms last year was 6.479 billion yuan, accounting for 66.31% of the total revenue. In terms of offline channels, last year, there were 12 newly opened and 43 closed three squirrel feeding stores. As of the end of the period, there were a total of 140 stores, realizing an operating revenue of 818 million yuan, a decrease of 6.39% over the same period last year, accounting for 8.37% of the total revenue. Alliance stores opened 341 new stores and closed 288 stores, with a total of 925 stores by the end of the period, realizing an operating revenue of 749 million yuan, an increase of 63.3% over the same period last year, accounting for 7.67% of the total revenue. Among them, the income from brand royalties is 35 million yuan and the income from product sales is 714 million yuan. The new distribution realized an operating revenue of 1.609 billion yuan, an increase of 38.16% over the same period last year, accounting for 16.47% of the total revenue. Traffic differentiation and competition continue to intensify In the first quarter of this year, the three squirrels achieved an operating revenue of 3.089 billion yuan, a year-on-year decrease of 15.85%; The net profit was 161 million yuan, a year-on-year decrease of 48.75%. In the first quarter of 2022, the rebound of the epidemic entering the Omicron stage and the intensification of competition under the continuous differentiation of online traffic have brought certain challenges to the operation of enterprises. With regard to the decline in revenue in the first quarter, three squirrels said that 40 days before the Spring Festival is the peak sales season of the company's annual goods Festival, February 1 in 2022 and February 12 in 2021. The schedule of the annual goods Festival has a certain impact on Q1 sales this year. In terms of online business, the competition continues to intensify under the background of traffic differentiation, and the traffic cost increases. The company reduces the delivery of drainage in the station and increases the investment in brand advertising. In addition, the epidemic has led to phased logistics outages in some regions, affecting order delivery, and sales decline in online business; In terms of offline business, the company comprehensively promoted the systematic layout of distribution business in the fourth quarter of 2021 and took the initiative to terminate the past extensive distribution business, resulting in a certain loss of distribution revenue; Affected by the epidemic, more than 400 stores closed periodically during the reporting period, and the sales revenue declined. With regard to the profit fluctuation in the first quarter, three squirrels pointed out that in the previous year, the company was profit oriented and focused on profit output for subsequent strategic investment, resulting in a high net profit base in the same period; The increase of raw material cost affects the gross profit margin: the rise of some raw material prices has an impact on the cost in the first quarter, resulting in the decline of the gross profit margin of main products; Advertising and share based payment: over 100 million yuan of brand advertising expenses were continuously invested during the reporting period, which affected the short-term profit performance; In 2021, the share payment expenses disbursed by the business partner's shareholding plan and restricted stock incentive plan exceeded 15 million yuan during the reporting period. Founded in 2012, three squirrels is one of the food e-commerce enterprises with large sales scale in China. In 2019, the annual sales have exceeded 10 billion, becoming the first enterprise in the snack industry to cross the threshold of 10 billion. It was successfully listed on the gem of Shenzhen Stock Exchange on July 12, 2019, becoming the "first share of Internet leisure snacks". At the initial stage of listing, the share prices of the three squirrels soared all the way, from 14.68 yuan of the issue price to 91.59 yuan in less than a year, with a total market value of more than 36 billion yuan at the peak. As of the latest closing, the three squirrels reported 29.27 yuan, with a total market value of 11.737 billion yuan. Suspend store expansion and focus on high-quality stores It is worth noting that the snack peer Yanjin shop, which disclosed the results of the first quarter on the same day, also showed a downward trend. In the first quarter of this year, Yanjin shops realized an operating revenue of 575 million yuan, a year-on-year decrease of 2.91%; The net profit was 61.4 million yuan, a year-on-year decrease of 25.15%; The basic earnings per share is 0.49 yuan. According to frost Sullivan data, it is estimated that the retail sales of China's leisure and snack industry will reach 1101.4 billion yuan in 2025, with a compound annual growth rate of about 7.3% from 2020 to 2025, maintaining steady growth; As an emerging category of snack foods, fried nuts are in line with the long-term trend of health and are still in vigorous development. From 2020 to 2025, the compound annual growth rate of the market scale will reach 9.0%. Industry potential is not small, how to grasp the opportunity. On April 22, the three squirrels issued a strategic transformation and upgrading announcement, which made it clear that in the next decade, "focus on the nut industry and create a multi brand model", comprehensively suspend store expansion, focus on the development of high-quality stores, optimize SKUs, etc. On the impact of the upgrading of development model on performance, the three squirrels pointed out that the strategic adjustment of store system will have a short-term performance impact. In the past, there were problems with the large-scale and extensive development model of stores. Therefore, the company has comprehensively suspended store expansion and vigorously shut down stores that do not meet the long-term positioning and poor performance. The next step will focus on improving the profitability of single stores and focusing on the high-quality development of high-quality stores. SKU will also bring short-term performance optimization. Three squirrels said that starting from the focus on nuts and building a multi brand model, the main brand will continue to reduce SKUs. Gradually stop selling multiple categories that do not meet the brand awareness, insufficient single product scale, weak profitability and insufficient core competitiveness. In addition, the three squirrels said that increasing investment in scientific research, expanding distribution channels and building supply chains will also have a short-term performance impact. The three squirrels will increase scientific and technological research and development, implement the layout of global distribution channels and the supply chain model based on the integrated development of primary, secondary and tertiary industries. They will face large resource investment, but the effect will take a certain period. (Xinhua News Agency)