ECOVACS(SH:603486) Guolian Minsheng Securities·2025-08-18 11:10Investment Rating - The investment rating for the company is "Buy" (maintained) [5][11] Core Views - The company has achieved unexpected growth in its floor cleaning machines, with continuous improvement in profitability. The company is actively exploring cost reduction opportunities, accelerating product upgrades, and benefiting from domestic subsidy policies. High-end products, represented by floor cleaning robots, are also well-received overseas. The company is expected to build a key industry chain and technological elements for embodied robots through both external investments and internal R&D [3][11]. Financial Performance - In H1 2025, the company reported revenue of 8.676 billion, a year-on-year increase of 24.4%, and a net profit attributable to shareholders of 979 million, up 60.8%. The second quarter of 2025 saw revenue of 4.818 billion, a 37.6% increase year-on-year, and a net profit of 505 million, up 62.2% [11][17]. - The service robot segment grew by 42.8%, while the smart home appliance segment grew by 6.3%. The company’s floor cleaning robots saw a shipment increase of 55.5% [11][17]. - The gross margin for service robots improved by 4.4 percentage points year-on-year, while the gross margin for smart home appliances decreased by 2.9 percentage points due to intense competition [11][17]. Market Dynamics - The company’s domestic and overseas revenue both grew by approximately 24% in H1 2025, with the overseas market, particularly Europe and North America, leading the growth [11][17]. - The company is expected to achieve net profits of 2.151 billion and 2.517 billion in 2025 and 2026, respectively, with corresponding P/E ratios of approximately 24.5x and 20.9x [11][19].