R&T(SZ:002790) Changjiang Securities·2025-11-06 14:43Investment Rating - The investment rating for the company is "Buy" and is maintained [10]. Core Views - The company experienced significant revenue and profit declines in the first three quarters of 2025, with revenue at 1.363 billion yuan, a year-on-year decrease of 20%, and net profit attributable to the parent company at 62 million yuan, down 51% [2][7]. - In Q3 2025, the company reported revenue of 444 million yuan, a 22% decline year-on-year, and a net profit of 10 million yuan, down 72% [2][7]. - The company is facing operational pressure and is awaiting a turning point in market conditions [7]. Revenue Analysis - The company's revenue decline is attributed to a downturn in industry conditions, affecting both its own brand and OEM businesses, with Q3 revenue falling 22% year-on-year [12]. - The performance of various product lines in H1 2025 showed declines: water tanks and accessories down 18.42%, smart toilets down 22.72%, and drainage systems down 6.86% [12]. - Domestic sales are under pressure due to a significant drop in OEM orders, while export business is still impacted by tariff disturbances [12]. Profitability Analysis - The gross margin in Q3 2025 decreased by 1.0 percentage points year-on-year, primarily due to increased promotional efforts for its own brand and further price reductions in OEM business [12]. - The expense ratios for sales, management, R&D, and financial costs increased, indicating that fixed costs were incurred despite lower revenue growth [12]. Competitive Position - The company maintains a strong competitive edge in the industry, with a R&D expense ratio of 5% and a total of 2,075 patents, including 200 invention patents [12]. - The company is recognized as one of the few bathroom enterprises with a "National Industrial Design Center" title, showcasing its leading capabilities in product R&D and manufacturing [12]. Market Outlook - The domestic market for smart toilets has significant growth potential, with an estimated penetration rate of only 9.6% compared to more mature markets [12]. - The company is expected to expand its offline presence and benefit from new retail channels, while the upcoming 3C certification for smart toilets may lead to increased industry concentration [12]. - The export market for smart toilets is also promising, with potential growth in regions like the Middle East, Europe, and South America [12]. Earnings Forecast - The company is projected to achieve net profits of 80 million yuan, 100 million yuan, and 120 million yuan for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 59, 45, and 38 [12].