Vatti(SZ:002035) Guolian Securities·2024-11-04 13:43Investment Rating - The investment rating for the company is "Buy" and is maintained [4][6]. Core Views - The retail sector has shown significant improvement since September, but there is a time lag in the transmission of this demand to the company's shipments, resulting in operational pressure in Q3. However, with substantial policy support for terminal demand and adequate bad debt provisions, revenue growth and profit elasticity are expected in Q4. The company’s projected performance for 2024-2026 is a year-on-year increase of 33%, 16%, and 8%, respectively, with corresponding valuations of 11X, 10X, and 9X [2][6]. Financial Performance Summary - For the first three quarters of 2024, the company achieved revenue of 4.576 billion, a year-on-year increase of 3.27%, and a net profit attributable to shareholders of 404 million, up 12.28%. In Q3 alone, revenue was 1.475 billion, down 4.94% year-on-year, while net profit was 104 million, up 5.68% [6][10]. - The company’s gross margin in Q3 decreased by 2.5 percentage points due to a weakening product mix, while the expense ratio increased by 1.3 percentage points, primarily due to higher R&D expenses [6][10]. - The company’s revenue performance in Q3 was still better than that of its peers, and the demand for large kitchen appliances is expected to improve due to the implementation of the old-for-new policy [6][10]. Revenue and Profit Forecast - The company’s revenue and profit forecasts for 2024-2026 are as follows: - Revenue (in million): 6,720 (2024E), 7,552 (2025E), 8,132 (2026E) - Net profit (in million): 594 (2024E), 690 (2025E), 745 (2026E) - Growth rates: 7.82% (2024E), 12.38% (2025E), 7.68% (2026E) [7][12].