Roborock(688169) Changjiang Securities·2024-03-09 16:00Investment Rating - The investment rating for the company is "Buy" and is maintained [3]. Core Views - The company aims to become a global leader in the technology home appliance sector, having rapidly grown from a Xiaomi ODM manufacturer to a global enterprise within ten years, with products available in over 100 countries. The company has achieved a revenue CAGR of over 16% in the past five years and has maintained a gross margin of around 50% over the last three years. In 2023, the company ranked second in domestic market share and has seen significant improvements in its market presence in Germany and France [4][17]. Summary by Sections Towards Becoming a Global Leader - The company has transitioned from a Xiaomi ODM manufacturer to a global player, achieving a revenue CAGR of over 16% in the last five years and maintaining a gross margin around 50%. In 2023, it ranked second in the domestic market share and has improved its presence in international markets, particularly in Germany and France [4][17]. R&D Foundation, Quality Improvement, and Cost Reduction - The management team has a strong technical background, with over 7% of revenue invested in R&D and more than 50% of employees in R&D roles. The company launched the S8 MaxV Ultra vacuum cleaner at CES 2024, featuring a suction power of 10,000Pa and a FlexiArm mechanical arm for high corner coverage. The company focuses on user needs and cost reduction through algorithm optimization, maintaining a gross margin of 50% even with the launch of cost-effective products [5][29]. Channel Development and Marketing Enhancement - The company has expanded its distribution channels in Europe and the U.S., entering major retail stores and online platforms. In 2023, it announced its entry into 180 Target stores in the U.S. and has established a significant online presence on platforms like Amazon. Marketing expenses exceeded 10% of revenue in 2022, with a focus on building brand recognition through various promotional strategies [6][7]. User Recognition and Brand Accumulation - The company has achieved high market share and product ratings, ranking first in sales on Amazon in Germany and France in 2023. Its products have consistently received higher ratings than competitors, and its brand recognition is growing, particularly in the U.S. market. The company has significant growth potential, with low current ownership rates in key markets [7][12]. Investment Recommendation - As a leading brand in cleaning appliances, the company is expected to further increase its market share and achieve substantial growth in scale and profits. The projected net profits for 2024 and 2025 are estimated at 2.387 billion and 2.813 billion yuan, respectively, with corresponding P/E ratios of 18.21 and 15.46 times, maintaining a "Buy" rating [7][8].