Text/Yang Jianyong
On the evening of the 24th, Stone Technology released a performance express, revenue growth slowed down, and encountered large-scale reductions by Lei Jun and other groups. According to the announcement of the reduction, the shareholders and directors and supervisors, including Jinmi, involved 8 shareholders, reduced their holdings by more than 7.18 million shares, accounting for 10.75% of the total share capital, and the market value of the reduction was as high as 4.8 billion yuan according to the closing price on the 24th. Undoubtedly, it has brought great pressure to Stone Technology in the capital market, and in the past year, important shareholders have continuously reduced their holdings, including Tianjin Jinmi Investment Partnership (Limited Partnership), the actual controller of Lei Jun, who has reduced its holdings by more than 1.6 billion yuan before this.
From March 16, 2021 to June 10, 2021, Jinmi reduced its holdings in Stone Technology by 1.3333 million shares, with a cash amount of 1.65 billion yuan. QM27 Limited cashed out more than 1 billion yuan. There are also large-scale reductions such as Banyan Consulting Limited, Ding Di and stone technology employee shareholding platform. Tianjin Stone Times Enterprise Management Consulting Partnership (Limited Partnership), as an employee shareholding platform of Stone Technology, accumulated cash out of 1.74 billion yuan from March 2021 to July 23, 2021.
For Stone Technology, with the help of millet, it has developed rapidly. Nowadays, Lei Jun continues to reduce its holdings, which inevitably makes the outside world speculate that Lei Jun is abandoning stone technology. After cashing out 1.6 billion earlier, a new round of reductions has now begun. Under the pressure of important shareholders to reduce their holdings, Stone Technology has been sluggish in the capital market for a long time. Compared with the highest market value of nearly 100 billion, the highest market value reached 99.7 billion yuan, and the current market value is 42.3 billion yuan, which is 57.4 billion yuan less than the high market value, a decrease of 58%. Behind this is both the pressure to reduce holdings, and the performance is also facing weak growth. In 2021, the revenue was 5.837 billion yuan, an increase of 28.84% year-on-year; the net profit was 1.4 billion yuan, a slight increase of 2.4% year-on-year, and the net profit after deducting non-deductions fell by 1.52% year-on-year.
In contrast, Coworth, which is also in the sweeping robot track, will make 2 billion yuan in 2021, an increase of 211% year-on-year. Of course, in the capital market, Coworth also suffered a heavy setback, compared with the high market value of more than 70 billion yuan. But in the author's opinion, the sweeping robot track is still expected. Sweeping robots are one of the most beloved hardware of current consumers. In recent years, consumers have maintained strong demand for various smart devices, driven by new technologies such as artificial intelligence and the Internet of Things, smart speakers, sweeping robots, smart door locks and various smart home appliances are favored by consumers. Overall, in the past year, the global COVID-19 pandemic has led to a sharp increase in demand for service robots. For example, service robots continue to grow in dedicated and home scenarios.
In terms of specific classification, the shipment of robots serving in the cleaning and disinfection field showed a strong growth trend. According to the data previously released by Aowei Cloud Network, the sales of the domestic sweeping robot industry in the first half of 2021 increased by 38.7% year-on-year, showing a rapid growth trend. In the domestic sweeping robot market, the two major sweeping robot manufacturers of Coworth and Stone Technology are familiar brands by the public. From the perspective of Coworth's revenue growth, it also reflects the strong demand for sweeping robots in the market. In the first three quarters of 2021, Coworth's revenue increased by 99% year-on-year to 8.2 billion yuan.
Unfortunately, in the face of a strong and vast market for sweeping robots, enterprises in the Xiaomi ecological chain are in trouble. Among the Xiaomi ecological chain enterprises with layouts for sweeping robots, Yunmi Technology and Stone Technology are representative manufacturers. Yun mi technology due to the reduction of xiaomi sweeping robots led to a decline in revenue, and from profit to loss, into a loss dilemma. In the third quarter of 2021, Yun mi technology revenue of 1.06 billion yuan, down 28.9% year-on-year, loss of 29.3 million yuan, the same period last year was a profit of 34.9 million yuan.
In response to the decline in revenue, Yun Mi pointed out in the financial report that it was mainly due to the sharp decline in sales of Xiaomi brand sweeping robots, as well as the expansion of profit margins in other categories and the adjustment of product portfolios. It can be seen that as a Xiaomi ecological chain enterprise, it is highly dependent on Xiaomi to hide huge risks, and the ecological chain enterprises increase the creation of their own brands, and there is no strong brand effect in the market, facing a dilemma. As a xiaomi ecological chain enterprise, Stone Technology is also not optimistic.
Stone Technology pointed out in the performance express report that due to the shortage of global transportation capacity due to factors such as the epidemic, there are more container delays, ship jumping, and poor transportation cycles, which have caused a certain negative impact on revenue growth. At the same time, in the second half of the year, we increased the investment in research and development expenses and sales expenses, launched high-end word-of-mouth products in the domestic market, and combined with active marketing and publicity work, achieved good market feedback, and promoted the sustained growth of total operating income.
The core of the players on the sweeping robot track is the increasingly fierce competitive environment in the industry, and then a large amount of marketing expenses are invested. Stone Technology's sales expenses accounted for 13% of total revenue. Coworth's sales expense investment accounts for 23% of total revenue, while R&D investment accounts for only 4% of total revenue, which raises the question of emphasizing marketing over R&D. In the first half of 2021, Cobos spent 1.218 billion yuan on sales expenses, an increase of 130% year-on-year; the cost of research and development was only 200 million yuan.
It should be pointed out that in the huge sales expenses, Cobos spent up to 694 million yuan on marketing promotion and advertising, compared with 219 million yuan in the same period last year, compared with the same period last year, the marketing promotion and advertising expenditure increased by 217% year-on-year. It also reflects the fierce competition in the industry, and it is necessary to continuously increase advertising investment in order to obtain the C-end user group. Of course, under the huge advertising investment, the Coworth brand has also shown strong competitiveness in the market, driving the growth of overall operating income.
Finally, the market for sweeping robots has broad prospects. According to data from Zhongyikang, under the dual factors of improved quality of life and the outbreak of the epidemic, the demand for home cleaning in Chinese consumers has increased rapidly. Among them, the sweeping robot is in the window period of industry upgrading, and the market size is about 11 billion yuan, an increase of 21.7% year-on-year. Sweeping robot enterprises to grasp the market dividend brought by the first-mover advantage of innovative technology, grasp the growth rhythm of the industry has become the primary task of sweeping robot manufacturers at this stage.
Jianyong Yang, a contributor to Forbes China, is committed to in-depth interpretation of cutting-edge technologies such as the Internet of Things, cloud services and artificial intelligence.