ECOVACS(SH:603486) Guoxin Securities·2024-05-06 01:00Investment Rating - The investment rating for the company is "Buy" [1][4][10] Core Views - The company has shown a significant improvement in its operations in Q1 2024, with a revenue increase of 7.4% quarter-on-quarter, and a notable recovery in net profit margins compared to the second half of 2023 [1] - The company aims to strengthen its overseas development and reduce product costs, with a focus on expanding its product matrix for different price segments [1] - The company plans to distribute a cash dividend of 3 yuan for every 10 shares [1] Financial Performance Summary - In 2023, the company achieved a revenue of 15.50 billion yuan, a year-on-year increase of 1.2%, while the net profit decreased by 64% to 610 million yuan [2][11] - The company's Q1 2024 revenue was 3.47 billion yuan, with a net profit of 300 million yuan, reflecting an 8.7% decrease year-on-year but a recovery from previous quarters [1][2] - The gross profit margin for 2023 was 47.5%, down 4.1 percentage points year-on-year, with a slight recovery to 47.2% in Q1 2024 [1][11] Market Trends - The global vacuum cleaner market grew by 0.8% in 2023, reaching a size of 6.6 billion USD, while the retail sales of vacuum cleaners in China increased by 5.1% to 138 billion yuan [1] - The company's overseas revenue grew by 20% in 2023, with a significant increase of 41% in the European region [1] - The floor washing machine segment remains strong, with the company's overseas revenue for this segment increasing by 40% [1] Future Outlook - The company has adjusted its profit forecasts, expecting net profits of 1.22 billion yuan, 1.54 billion yuan, and 1.87 billion yuan for 2024, 2025, and 2026 respectively, indicating a year-on-year growth of 99%, 26%, and 22% [1][2] - The company is focusing on launching new products to stabilize revenue and gross margins, with plans to introduce a cost-effective series in February 2024 [1]