Hotata(603848) Changjiang Securities·2025-02-07 03:52Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [8]. Core Viewpoints - The company has been a leader in the smart drying industry for over 20 years, with a brand market share of 40%. The current penetration rate of smart drying products in China is approximately 17%, indicating significant growth potential. The company is expected to leverage its brand and product strengths to maintain rapid growth through comprehensive channel strategies, including e-commerce and offline sales [2][4][5]. - The company aims to expand its product line beyond smart drying products to include smart locks and other smart home devices, creating a comprehensive smart home ecosystem that will drive long-term growth [2][7]. Summary by Sections Company Overview - The company has established itself as a leading smart home enterprise, focusing on the smart drying sector. It has been recognized as one of the "Top 500 Chinese Brands" for ten consecutive years, with a brand value of 28.617 billion yuan. From 2018 to 2023, the company's revenue grew at a CAGR of 5.2%, with a 22% year-on-year increase in 2023, achieving a revenue of 1.688 billion yuan [4][14]. Industry Analysis - The traditional drying market is saturated, while the smart drying market has substantial room for growth. The estimated market size for smart dryers in China is about 3.21 million units in 2024, with a penetration rate of 17%. If the penetration rate increases to 40%, the company could see a 140%+ growth in its smart dryer business [5][38]. Business Strategy - The company has a strong focus on product innovation and has accumulated over 1,400 patents, significantly outpacing competitors. The brand recognition and purchase rates in first-tier and new first-tier cities are 73.1% and 39.1%, respectively, indicating a strong brand effect [5][42][50]. - The company has diversified its sales channels, achieving a revenue split of 63% from online and 34% from offline channels in the first half of 2024. It has a leading market share in major e-commerce platforms, with 31% on Tmall and 40% on JD [6][52]. Future Growth Potential - The company is expanding its product categories to include smart locks and other smart home devices, aiming to create a full suite of smart home solutions. The projected net profits for 2024-2026 are 260 million, 320 million, and 380 million yuan, respectively, with corresponding P/E ratios of 21, 17, and 14 [7][21]. - The company is also focusing on improving its supply chain and production efficiency through the establishment of smart factories, which is expected to enhance profitability and operational efficiency [54].