EDIFIER(002351) HUAXI Securities·2025-03-20 07:45Investment Rating - The report assigns a rating of "Buy" for the company [7] Core Views - The company, Edifier, is positioned as a leading domestic audio manufacturer, focusing on acoustic technology and product innovation to drive growth [1][3] - The earphone market is expanding, driven by the emergence of Open Wearable Stereo (OWS) earphones and AI technology, which enhance user experience and create new demand [2][29] - Edifier is leveraging industry trends to create new performance growth points, with a comprehensive product lineup in OWS and AI earphones [3][49] Company Overview - Edifier was founded in 1996 and listed on the Shenzhen Stock Exchange in 2010, with a mission to empower through sound and a strong focus on audio technology research and development [1][11] - The company has a diverse product range, including home audio, professional audio, automotive audio, headphones, and microphones, with hundreds of models available [1][17] - The company has received multiple international design awards, indicating strong product quality and market acceptance [1][11] Industry Analysis - The global earphone market was valued at $62 billion in 2022 and is projected to grow to $89.6 billion by 2026, with a CAGR of 9.64% [29][30] - The online sales of open-type earphones in China saw a significant increase of 165% year-on-year in the first half of 2024, indicating a strong market trend towards this product category [2][38] - AI technology is enhancing earphone functionalities, with predictions of a 488.7% increase in online sales of AI earphones in China in 2024 [2][45] Financial Performance - The company’s revenue is expected to grow from 3.13 billion yuan in 2024 to 4.17 billion yuan in 2026, with year-on-year growth rates of 16.10%, 15.82%, and 15.20% respectively [7][8] - The net profit attributable to shareholders is projected to increase from 500 million yuan in 2024 to 701 million yuan in 2026, with growth rates of 19.22%, 20.13%, and 16.62% [7][8] - The company’s gross margin is expected to improve, reaching 42.5% by 2026, driven by product mix optimization and brand strength [8][19] Competitive Strategy - Edifier is building a robust competitive advantage through a diverse product matrix that caters to various market segments, including youth and gaming [4][46] - The company is enhancing its brand strategy through social media marketing and collaborations with popular IPs, which has significantly increased brand visibility and consumer engagement [4][56] - The company is expanding its distribution channels both domestically and internationally, leveraging e-commerce platforms and social media to enhance sales [7][60]