Vatti(002035) 天风证券·2024-11-01 07:15Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 7.88 yuan [4][12] Core Views - The company outperformed the industry in 24Q1-Q3, with revenue of 4.58 billion yuan, up 3.27% YoY, and net profit attributable to the parent company of 400 million yuan, up 12.28% YoY [1] - In 24Q3, revenue was 1.47 billion yuan, down 4.94% YoY, while net profit attributable to the parent company was 100 million yuan, up 5.68% YoY [1] - The company's market share increased, and the replacement of old appliances is expected to boost demand [1] - The company's gross margin in 24Q3 was 40.1%, down 2.5 percentage points YoY, mainly due to changes in accounting standards and price competition [2] - The company's net profit margin in 24Q3 increased by 0.7 percentage points YoY to 7.1%, driven by a reversal of credit impairment [2] Financial Performance and Valuation - The company's revenue is expected to grow from 6.51 billion yuan in 2024E to 7.92 billion yuan in 2026E, with a CAGR of 11.3% [3] - Net profit attributable to the parent company is forecasted to increase from 542.44 million yuan in 2024E to 707.72 million yuan in 2026E, with a CAGR of 14.98% [3] - The company's P/E ratio is expected to decline from 12.31x in 2024E to 9.44x in 2026E, indicating potential undervaluation [3] - The company's EV/EBITDA ratio is projected to decrease from 6.01x in 2024E to 4.70x in 2026E, reflecting improved profitability [3] Industry and Market Position - The company operates in the home appliance and kitchen appliance industry, which has been under pressure due to a 23.9% YoY decline in domestic residential completion area in 2024 [1] - Despite industry challenges, the company achieved a 3.3% YoY revenue growth in the first three quarters of 2024, outperforming the industry [1] - The company has expanded its presence in lower-tier markets, with over 20,000 active stores on platforms like JD, Tmall, Suning, and Wuxing [1] Future Outlook - The company is expected to benefit from brand image upgrades, improved channel management, and new product launches [2] - The company is focusing on channel flattening, product premiumization, and production intelligence to enhance profitability [2] - The report forecasts net profit attributable to the parent company to grow from 540 million yuan in 2024E to 710 million yuan in 2026E [2] Financial Ratios and Metrics - The company's gross margin is expected to stabilize around 40.7% to 41.2% from 2024E to 2026E [8] - The net profit margin is projected to increase from 8.33% in 2024E to 8.94% in 2026E [8] - The company's asset turnover ratio is expected to improve from 0.98x in 2024E to 1.17x in 2026E, indicating better asset utilization [8]