Group 1 - The domestic gas water heater market size is approximately 13.43 million units, with a year-on-year growth of 8.7% expected in 2024 [1] - In the first half of 2024, sales of gas water heaters on Douyin increased by 104.4% year-on-year, while sales in lower-tier channels grew by 62.2% [1] - The industry is witnessing innovation and premiumization, exemplified by Vatti's "skin-care bathing" gas water heater showcased at AWE 2025 [1] Group 2 - The home appliance industry was one of the first sectors to open up and become market-oriented after China's reform and opening-up [3] - Safety was the primary consumer demand for gas water heaters until around the year 2000, leading to the ban on high-risk direct vent water heaters due to carbon monoxide poisoning [3] - Core manufacturers, such as Vatti, have significantly contributed to overcoming safety challenges in the industry [3] Group 3 - The gas water heater industry in China entered an "accelerated phase" over the past two decades, with shorter product and technology upgrade cycles [4] - In 2013, a major upgrade to "constant temperature" technology significantly improved the bathing experience [4] - Vatti developed patented temperature control technology in 2015, achieving zero fluctuation in water temperature during use [4]

Core Insights - The National Development and Reform Commission has emphasized the need to rectify "involutionary" competition, which distorts market mechanisms and disrupts fair competition, marking a significant directive for various industries [1] - The "14th Five-Year Plan" is approaching its conclusion in 2025, while the "15th Five-Year Plan" is being formulated, with a focus on high-quality development and innovation-driven strategies [1] - The home appliance industry is a key pillar of China's manufacturing sector, with companies like Vatti actively participating in high-end competition and driving collaborative development across the supply chain [1] Company Developments - Vatti's Supply Chain Management (SRM) system has been optimized over two years and is now a crucial digital infrastructure for efficient operations, indicating a deepening of the company's digital transformation [2] - To achieve its goal of becoming a "100 billion enterprise," Vatti has invested over 1.2 billion yuan in a digital intelligent factory project, expected to begin production trials in July 2025, featuring advanced automation and information systems [2] - In 2024, Vatti's R&D investment reached 263 million yuan, a year-on-year increase of 6.14%, with R&D expenditure accounting for over 4% of total revenue, and the company added 885 new patents, bringing its total to 4,416 [2] Market Trends - The demand for high-end kitchen appliances has been effectively released, driven by government subsidies, with a reported year-on-year increase in sales of high-end products like range hoods and dishwashers from January to April 2025 [3] - Vatti positions itself as a "fashionable scientific kitchen appliance" brand, focusing on user needs and kitchen scenario innovations, which has led to significant market recognition, particularly in the ultra-thin range hood segment [3] - Vatti's ultra-thin S36 range hood won the "JD Annual Reputation Gold Award" in 2024, marking it as the only award-winning brand in the kitchen appliance category on JD.com [3] Product Innovations - Vatti has introduced the "Clean Kitchen" concept and emphasizes the importance of cooking processes and product performance for user well-being, aligning with the younger generation's pursuit of a healthy and stylish lifestyle [4] - The launch of the "Beauty Bath Gas Water Heater" and the "World Health Steamer" has successfully tapped into the high-end market, with the water heater achieving a sales volume of 32,000 units within two months of its release [4] Strategic Insights - The experience of Vatti illustrates that there are no winners in "involutionary" competition, and that true growth comes from product and service innovation, as well as the development of new competitive advantages [5][6]

Core Viewpoint - In 2024, the global economy is showing signs of recovery amidst fluctuations, presenting dual opportunities for the kitchen appliance industry through technological revolution and consumer upgrades. Vatti, as a leading high-end kitchen appliance brand in China, has achieved counter-cyclical growth through continuous innovation and precise market strategies [1]. Industry Overview - The cumulative retail sales of kitchen appliances in 2024 are projected to reach 49.2 billion yuan, representing a year-on-year growth of 16.4%. The range hood market is expected to generate retail sales of 36.2 billion yuan, up 14.9%, while the gas stove market is anticipated to reach 20.4 billion yuan, growing by 15.7% [1]. Company Performance - Vatti's total operating revenue for 2024 is reported at 6.372 billion yuan, reflecting a year-on-year increase of 2.23%. The net profit attributable to shareholders is 485 million yuan, up 8.39%. Key growth drivers include ultra-thin range hoods and smart stoves, with Vatti holding a 37.17% retail market share in ultra-thin range hoods, maintaining the top position for two consecutive years [2][3]. Product Innovation - Vatti's growth is primarily attributed to continuous product innovation. The ultra-thin small flying saucer S36 features a sleek design and high suction power, achieving a market-leading retail volume share of 17.5% in 2024. The automatic cleaning technology addresses traditional issues of oil accumulation, contributing to its market dominance [3][4]. - In the stove category, the 8C21 model enhances thermal efficiency to 68% and has generated sales exceeding 120 million yuan in 2024, becoming a best-seller in offline channels [3]. Market Strategy - Vatti's high-end strategy is supported by robust technological research and development, with 4,416 national patents and a focus on innovative solutions like self-cleaning technology and AI smoke control algorithms. The company has also established a "clean kitchen" system to create competitive barriers in a challenging market environment [6][7]. Design and Collaboration - Vatti collaborates with Italian design teams and academic institutions to enhance product design and efficiency. The company has implemented automated production lines, achieving 80% automation and a 66.7% increase in production efficiency [7][9]. Future Outlook - Looking ahead to 2025, Vatti plans to launch a new gas water heater that emphasizes health and skin care, aligning with contemporary lifestyle trends. The company's commitment to innovation and technology positions it as a leader in the high-quality development of the kitchen appliance industry in China [9].