ECOVACS(603486) 华安证券·2024-04-29 12:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report indicates that the company has reached a turning point after a prolonged bottoming phase, with significant improvements in Q1 2024 performance, driven by a recovery in domestic sales, improved profitability in the cleaning segment, and continued growth in overseas markets [3][2] Summary by Sections Financial Performance - For Q1 2024, the company reported revenue of 3.47 billion (up 7.4%) and a net profit of 300 million (down 8.7%) [1] - In 2023, the total revenue was 15.5 billion (up 1.2%), with a net profit of 610 million (down 64%) [1] - The company plans to distribute a dividend of 3 yuan for every 10 shares, resulting in a total payout ratio of 52%, significantly up from 30% the previous year [1] Brand Performance - The report highlights that both brands, Ecovacs and Tineco, showed growth in Q1 2024, with Ecovacs brand revenue increasing by 11% and Tineco brand revenue increasing by 10% [2][3] - The Ecovacs brand saw a recovery in sales volume, while Tineco's profitability is expected to improve as price competition stabilizes [3] Profitability and Margins - Q1 2024 saw a recovery in gross margin, with a 0.7 percentage point increase, and net margin improved by 8.4 percentage points [2] - The report attributes the profitability recovery to three main factors: stabilization of gross margins, improved cost control, and reduced losses from new business ventures [2] Future Projections - The company is projected to achieve revenues of 18.0 billion, 20.6 billion, and 22.8 billion for 2024, 2025, and 2026 respectively, with year-on-year growth rates of 16%, 14%, and 11% [3][4] - Net profit forecasts for the same years are 1.51 billion, 2.04 billion, and 2.51 billion, reflecting significant recovery and growth potential [3][4] Market Position - The report emphasizes that the company is well-positioned to benefit from new product launches and improvements in operational efficiency in key markets such as the US and Europe [3]