ECOVACS(SH:603486) Tianfeng Securities·2024-09-02 07:10Investment Rating - The investment rating for the company is "Buy" with a 6-month outlook maintained [4] Core Views - The company reported a revenue of 6.976 billion yuan for H1 2024, a year-on-year decrease of 2.35%, while the net profit attributable to the parent company was 609 million yuan, an increase of 4.26% [1] - The company is focusing on enhancing its overseas business growth and product matrix to meet diverse consumer demands while improving overall profitability through cost reduction measures [2] Financial Performance Summary - For H1 2024, the company's gross margin was 49.12%, up 0.15 percentage points year-on-year, and the net profit margin was 8.73%, up 0.56 percentage points year-on-year [1] - The company reduced its marketing expenses significantly, leading to a notable decrease in sales expense ratio by 2.87 percentage points year-on-year [1] - The company expects net profits for 2024-2026 to be 1.33 billion, 1.51 billion, and 1.66 billion yuan respectively, with corresponding dynamic P/E ratios of 17.2x, 15.2x, and 13.8x [2] Business Segment Performance - The company's brands, Ecovacs and Tineco, showed varied performance with Ecovacs experiencing a 10.4% decline in domestic sales but an 11.3% increase in overseas sales [1] - The Tineco brand saw a 10.8% decline in domestic sales but a significant 31.7% increase in overseas sales, particularly in the U.S. and Europe [1] - The company launched a new product category, lawn mowers, which saw revenue and sales volume growth of 185.9% and 252.1% year-on-year respectively [1] Incentive Plans - The company introduced a stock option and employee stock ownership plan, granting a total of 25 million shares, approximately 4.39% of the total share capital, to attract and retain core talent [2]