ECOVACS(603486) 长江证券·2024-11-21 00:41Investment Rating - The report maintains a "Buy" rating for Ecovacs Robotics (603486 SH) [4] Core Views - Ecovacs Robotics is a dual leader in both robotic vacuum cleaners and floor washing machines with its brands "Ecovacs" and "Tineco" [4] - The company achieved revenue of 15 5 billion yuan in 2023 but faced pressure due to product layout missteps and intense price competition [4] - The company is actively adjusting its strategies and the expected inflection point is gradually emerging [4] Robotic Vacuum Cleaners - The robotic vacuum cleaner industry is shifting towards "micro-innovation + high cost-performance" as the key to competition [5] - Ecovacs launched the T30 Pro series in 2024 which has improved in multiple details and achieved a stable market share of around 10% in domestic online sales [5] - The company is also expanding its presence in international markets through its Yeedi sub-brand [5] Floor Washing Machines - The floor washing machine market in China had a penetration rate of only 3% in 2023 with a market size of 12 21 billion yuan [6] - Tineco has completed further price reductions in 2024 creating a significant gap with competitors like Dreame and Narwal [6] - Long-term the industry is likely to see consolidation through price wars with Tineco benefiting from its brand recognition and cost advantages [6] New Businesses and Cost Control - Ecovacs invested 300 million yuan in new businesses such as robotic lawn mowers and smart kitchen appliances in 2023 [7] - The company's sales expense ratio in Q1 2024 was close to a two-year low indicating more rational spending and potential profit release [7] Financial Projections - The report forecasts net profits of 1 221 1 498 and 1 869 billion yuan for 2024-2026 with corresponding P E ratios of 22 28 18 15 and 14 55 times [8] Market Performance - Ecovacs' overseas revenue accounted for 42% of total revenue in 2023 with continuous growth in both revenue and gross margin since 2019 [20] - The company's smart home appliances segment accounted for nearly 50% of total revenue in 2023 reflecting the success of its dual-brand strategy [20] Historical Development - Ecovacs has undergone three major transformations from OEM production to establishing its own brand and then to a dual-brand strategy [26] - The company has a strong presence in over 170 countries and regions with subsidiaries in Germany the US Japan and Singapore [18] Industry Trends - The global penetration rate of robotic vacuum cleaners is still low with significant growth potential especially in markets like the US and China [44] - The industry is focusing on "micro-innovation + high cost-performance" to better match consumer needs [50] Competitive Landscape - Ecovacs has a competitive edge in cost control and response efficiency due to its deep industrial chain layout and self-production capabilities [61] - The company has made significant progress in cost reduction and product optimization with the launch of the T30 Pro series [65]