ECOVACS(SH:603486) Guoxin Securities·2024-05-05 13:06Investment Rating - The investment rating for the company is "Buy" [7][21]. Core Views - The company's Q1 performance shows a significant improvement in profitability compared to the previous quarter, with a revenue of 34.7 billion (+7.4%) and a net profit of 3.0 billion (-8.7%) [2][3]. - The company plans to distribute a cash dividend of 3 yuan for every 10 shares [2]. - The company is focusing on enhancing its overseas development and reducing product costs, which is expected to stabilize revenue and gross margins in the future [3][4]. Summary by Relevant Sections Financial Performance - In 2023, the company achieved a revenue of 155.0 billion (+1.2%) and a net profit of 6.1 billion (-64.0%), with a significant drop in Q4 revenue to 49.7 billion (-4.4%) and net profit to 0.1 billion (-98.5%) [2][4]. - The gross margin for 2023 decreased by 4.1 percentage points to 47.5%, while the net profit margin fell by 7.1 percentage points to 3.9% [3][4]. - The company expects a recovery in Q1 2024, with a projected net profit of 12.2 billion, 15.4 billion, and 18.7 billion for 2024-2026, reflecting a year-on-year growth of 99%, 26%, and 22% respectively [2][4]. Market Trends - The global vacuum cleaner market grew by 0.8% to 6.6 billion USD in 2023, with China's retail sales increasing by 5.1% to 138 billion [3]. - The company's overseas revenue grew by 20% to 30 billion, while domestic revenue fell by 12% to 47 billion [3][4]. - The company is expanding its product lineup and focusing on cost reduction to meet diverse consumer demands [3][4]. Strategic Initiatives - The company has established an overseas headquarters in Singapore to strengthen its global online and offline channel coverage, with European revenue increasing by 41% [3]. - The introduction of the T30 cost-effective series in February 2024 aims to address the shortfall in lower-cost products [3][4].