ECOVACS(SH:603486) KAIYUAN SECURITIES·2024-04-29 14:30Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company achieved rapid growth in overseas sales in 2023, benefiting from the collective expansion of Chinese brands abroad. The earnings forecast has been raised, with expected net profits for 2024-2026 at 1.33 billion, 1.63 billion, and 1.82 billion respectively, corresponding to EPS of 2.31, 2.84, and 3.15. The current stock price corresponds to PE ratios of 19.8, 16.1, and 14.5 for the respective years [6][7] Financial Performance Summary - In Q4 2023, the company reported revenue of 4.97 billion (down 4.4% year-on-year) and a net profit of 0.1 billion (down 98.5%). In Q1 2024, revenue was 3.47 billion (up 7.4%), with a net profit of 0.3 billion (down 8.7%) [6] - The company's gross margin in Q4 2023 was 46.5% (down 8.8 percentage points), while in Q1 2024, it improved to 47.2% (up 0.7 percentage points) [8] - The company’s market share for floor cleaning machines in Q1 2024 was 27.5%, maintaining the leading position, with specific models achieving market shares of 4.9% and 3.6% [7] Sales Performance - The company's brands, Ecovacs and Tineco, saw overseas revenue growth of 20% and 41% respectively in 2023. Domestic revenue for Ecovacs fell by 11.9%, while overseas revenue grew by 20.2% [7] - The Tineco brand's domestic and overseas revenue for 2023 was 4.2 billion and 3.06 billion respectively, with domestic sales down 11.0% and overseas sales up 40.5% [7] Profitability Outlook - The company expects profitability to improve due to the sales of high-margin products and cost control measures. The net profit margin in Q1 2024 was 8.6% [8] - The forecasted net profit for 2024 is 1.33 billion, representing a significant recovery from the previous year's performance [9]