Investment Rating - The investment rating for TCL Smart Home is "Buy-A" with a 6-month target price of 13.20 CNY per share, while the current stock price is 11.03 CNY [4]. Core Views - TCL Smart Home reported a revenue of 14.35 billion CNY for the first three quarters of 2025, representing a year-on-year increase of 2.9%, and a net profit attributable to shareholders of 980 million CNY, up 18.5% year-on-year. In Q3 alone, the revenue was 4.87 billion CNY, down 2.3% year-on-year, but the net profit increased by 27.5% to 340 million CNY [1][2]. - The company is focusing on management efficiency and digital upgrades, along with optimizing its product structure, which has led to a significant improvement in profitability in Q3 [1][3]. Summary by Sections Revenue Performance - In Q3, the external sales volume of TCL refrigerators and washing machines showed a slight increase of 0.2% and a significant increase of 43.4% respectively. However, internal sales for refrigerators and washing machines decreased by 20.2% and 36.5% year-on-year, indicating pressure on domestic sales due to a shift towards mid-to-high-end products [2]. - The company is expected to enhance its product competitiveness through R&D and launch new mid-to-high-end products, which may boost revenue growth in emerging markets [2]. Profitability - The net profit margin for Q3 was 7.0%, an increase of 1.6 percentage points year-on-year. The gross profit margin improved by 3.3 percentage points, attributed to better product structure and increased overseas brand business [3]. - The company has managed to reduce its expense ratio by 1.7 percentage points, indicating improved management and operational efficiency through digitalization [3]. Cash Flow and Financial Health - The operating cash flow for Q3 was stable at 560 million CNY, with a slight year-on-year decrease of 0.1 million CNY. The total cash and financial assets amounted to 5.38 billion CNY, a year-on-year increase of 35.3%, indicating a strong cash position [3]. - The contract liabilities increased by 19.2% year-on-year to 440 million CNY, reflecting a positive willingness from distributors to make payments [3]. Financial Forecast - The projected earnings per share (EPS) for TCL Smart Home are expected to be 1.10 CNY, 1.22 CNY, and 1.37 CNY for the years 2025, 2026, and 2027 respectively [4][10].