Three Squirrels (300783) Investment Value Analysis Report

Three Squirrels, as a leading enterprise in China’s nut snack industry, currently has a total market capitalization of approximately 6.8 billion yuan, with a stock price of $23.38 (about 168 yuan)[0]. In terms of stock price performance, the company is in a clear downward cycle: it has fallen by 40.13% year-to-date, 36.45% in the past year, and 41.08% cumulatively over five years[0]. This downward trend reflects the market’s concerns about the company’s business model transformation and profitability improvement.

From a valuation perspective, the current P/E ratio is 41.33 times, significantly higher than the average level of the consumer goods industry, while the P/S ratio is only 0.84 times, indicating that the market holds a cautious attitude towards the company’s future profit growth[0]. It is worth noting that despite having a revenue scale of over 10 billion yuan, the company’s net profit margin is only 2.03% and ROE is 7.69%, showing weak profitability and shareholder return capacity[0].

lies in transforming from a pure online nut retailer to an omni-channel snack food retailer with “online + offline + own brand”. The strategic intent of this model is reflected in three aspects: first, enhancing brand stickiness and consumer interaction through offline experience stores; second, increasing the penetration rate of own-brand products through the Life Store scenario; third, reducing procurement costs and improving gross profit margins through deep supply chain integration.

However, from the current financial data, this transformation faces significant challenges. The company’s financial analysis shows that it adopts aggressive accounting policies, with a low ratio of depreciation to capital expenditure, which may imply doubts about the actual profit quality[0]. At the same time, the latest quarterly revenue of $228 million is lower than market expectations (a gap of 9.24%), indicating insufficient business growth momentum[0].

Based on the current stock price corresponding to market capitalization and historical revenue data, Three Squirrels’ annual revenue is approximately in the range of 6.5-7 billion yuan. To achieve the 10 billion yuan revenue target by 2026, it needs to achieve more than 50% revenue growth in the next two years, with a compound annual growth rate (CAGR) of about 25%.

From the analysis of the industry competition pattern, although the nut snack market maintains growth, competition is becoming increasingly fierce. Brands such as Liangpinpuzi, Baicaowei, and Laiyifen continue to exert their strength. The average growth rate of the industry has fallen from over 30% in the early stage to the range of 10-15%. Against this background, for Three Squirrels to achieve a revenue jump of over 50%, it needs the Life Store model to scale rapidly, supply chain efficiency to improve significantly, and the proportion of own-brand products to increase substantially——it is quite difficult to meet all three conditions simultaneously.

1. Weak Profitability
   : Net profit margin is only 2%, lower than the industry average, and scale expansion is difficult to translate into profit growth;
2. Valuation Pressure
   : The 41x P/E ratio does not match the low profit margin, and the market may further reduce the valuation;
3. Transformation Uncertainty
   : The Life Store model is still in the investment period, and the expansion cost of offline stores is relatively high;
4. Intensified Competition
   : The snack industry has entered stock competition, and price wars may erode gross profits.

1. Brand Assets
   : Three Squirrels has high brand awareness and certain consumer mindshare advantages;
2. Supply Chain Integration
   : If upstream raw material direct procurement and factory customization can be realized, the cost structure can be improved;
3. Low Beta Characteristic
   : Beta is 0.65, stock price volatility is lower than the market, and it has strong defensive properties.

From the technical analysis perspective, the current stock price is in a narrow震荡 range of $23.08-$23.68. The 200-day moving average is at $26.14, and the stock price has fallen by about 10.5% from the moving average, which is in a clear downward channel[0]. The MACD indicator shows no crossover signal, and the KDJ is in a death cross situation, so it is difficult to change the weak consolidation pattern in the short term.

: The transformation direction of Three Squirrels’ Life Store model is correct, but there is still significant uncertainty in the path from supply chain integration and own-brand building to the realization of the 10 billion yuan revenue target. Currently, the valuation is high, profitability is weak, and the stock price is in a downward trend. It is recommended that investors maintain a cautious wait-and-see stance and intervene only after clear signs of fundamental improvement emerge.

---

[0] Jinling AI Financial Database - Three Squirrels (300783.SZ) Company Overview, Financial Analysis, Technical Indicator Data