Roborock(688169) 华创证券·2024-11-05 08:49Investment Rating - Strong Buy (Maintained) with a target price of 280 CNY [1] Core Views - Revenue growth slowed in Q3 2024 due to timing differences in European revenue recognition, with Q3 revenue reaching 2.59 billion CNY, up 11.9% YoY [1] - Domestic sales outperformed the industry, with a 15.4% YoY increase in Q3 2024 for the domestic sweeping robot market, driven by new product launches and channel expansion [1] - Overseas sales in the US showed strong growth due to expanded offline channels and Amazon Prime Day promotions, while European sales were pressured by the transition from a distribution model to a direct sales model [1] - Net profit in Q3 2024 declined by 43.4% YoY to 350 million CNY, primarily due to lower average selling prices and adjustments in accounting standards, which reduced gross margin by 5.2 percentage points to 53.9% [1] - Operating expenses increased significantly, with sales/management/R&D/financial expense ratios at 26.2%/3.8%/8.9%/-0.5%, respectively, leading to a net margin decline of 13.3 percentage points to 13.6% [1] - The company expects improved performance in Q4 2024, driven by promotional activities and scale effects, with revenue and profitability expected to stabilize and recover [1] Financial Forecasts - Revenue for 2024E is projected at 10.936 billion CNY, with a YoY growth of 26.4%, while net profit is expected to reach 2.167 billion CNY, up 5.6% YoY [2] - EPS for 2024E is forecasted at 11.73 CNY, with a P/E ratio of 20x [2] - Gross margin is expected to remain stable at around 54.3% in 2024E, with a net margin of 19.8% [5] - ROE is projected at 17.0% for 2024E, with a ROIC of 228.6% [5] Market Performance - The company's stock price has shown a 13% decline over the past 12 months, underperforming the CSI 300 index [4] - The stock's 12-month high and low prices were 465.10 CNY and 198.91 CNY, respectively [3] Strategic Adjustments - The company has adjusted its organizational structure and strategy, focusing on aggressive market expansion in the US and domestic channels like Douyin, which have shown positive results [1] - Despite competitive pressures, the company maintains a strong brand presence and first-mover advantage in overseas markets, particularly in Europe [1]