ECOVACS(603486) 天风证券·2024-10-30 09:17Investment Rating - The investment rating for the company is "Buy" with a target price indicating a potential return of over 20% within the next six months [5][14]. Core Views - The company is expected to see significant revenue growth in Q4 due to the implementation of a trade-in policy and strong sales performance of new products, despite a slight decline in overall revenue growth in Q3 [1][3]. - The company is actively reducing old inventory overseas, which has impacted profit margins but is seen as a strategic move to prepare for new product launches [2]. - Increased investment in marketing and product development is noted, with a focus on expanding the product matrix and enhancing cost efficiency to improve overall profitability [3]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported revenue of 10.226 billion yuan, a year-on-year decrease of 2.9%, and a net profit of 615 million yuan, an increase of 1.88% [1]. - In Q3 2024, revenue was 3.25 billion yuan, down 4.06% year-on-year, with net profit significantly declining by 69.21% to 6 million yuan [1]. - The gross margin for the first three quarters was 48.39%, up 0.4 percentage points year-on-year, while the net margin was 6.01%, up 0.28 percentage points [2]. Cost Structure - The company’s expense ratios for sales, management, R&D, and financial costs for the first three quarters were 31.41%, 3.74%, 6.43%, and -0.31% respectively, with a notable increase in sales expenses due to new product launches [3]. - In Q3, the sales expense ratio rose to 36%, reflecting increased marketing efforts for new products [3]. Future Outlook - The company aims to enhance its overseas business and product offerings while maintaining cost efficiency to improve gross margins during a period of declining average product prices [3]. - Projected net profits for 2024-2026 are estimated at 1.28 billion, 1.47 billion, and 1.65 billion yuan respectively, with corresponding dynamic P/E ratios of 23.0x, 20.1x, and 17.9x [3][7].