Vatti(002035) 长江证券·2024-11-11 05:54Investment Rating - The investment rating for the company is "Buy" and is maintained [3]. Core Views - The company reported a revenue of 4.576 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 3.27%. The net profit attributable to shareholders was 404 million yuan, with a year-on-year increase of 12.28%. The net profit excluding non-recurring items was 387 million yuan, up by 12.00% [3][5]. - In Q3 2024, the company achieved a revenue of 1.475 billion yuan, a decline of 4.94% year-on-year, while the net profit attributable to shareholders was 104 million yuan, showing a growth of 5.68% [3][5]. - The company is facing challenges due to weak industry demand, leading to a decline in revenue scale and a slight decrease in operating profit margin [5][6]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company's revenue grew by 3.27%, with quarterly growth rates of +15.6%, +2.07%, and -4.94% for Q1, Q2, and Q3 respectively. The decline in Q3 revenue is attributed to weak domestic demand prior to the implementation of the appliance replacement policy [5]. - The gross margin decreased by 1.29 percentage points year-on-year, primarily due to adjustments in the sales structure. The operating profit for the first three quarters was 328 million yuan, reflecting a growth of 3.19%, with an operating profit margin of 7.16% [5][6]. - In Q3 2024, the gross margin fell by 2.5 percentage points, influenced by strong trends in raw material prices. The operating profit for Q3 was 75 million yuan, down by 12.37%, with an operating profit margin of 5.07% [5][6]. Market Strategy - The company has established a multi-layered brand matrix with its three major brands: Vatti, Baide, and Vatti Home, effectively covering various product categories such as kitchen and bathroom appliances, smart home products, and whole-house customization [6]. - The company is actively promoting new product innovations and category extensions while targeting channel expansions, which is expected to sustain growth in scale. The projected net profits for 2024-2026 are 548 million, 617 million, and 690 million yuan, with corresponding P/E ratios of 12.9, 11.5, and 10.3 times [6][7]. - The company is enhancing its product line and brand marketing to improve sales conversion rates and is focusing on research and development to keep up with market trends [7]. Cash Flow and Financial Health - The net cash flow from operating activities decreased by 49.79% year-on-year for the first three quarters, with a significant decline of 59.11% in Q3, mainly due to increased payments and higher expense inputs [5].