Source of this article: Times Finance Author: Zhou You
The continuous breakthrough of cutting-edge technology has allowed robots to enter more fields, improve and improve human life, and industry leaders have benefited.
Recently, Ecovacs (603486. SH) released its 2023 annual report and 2024 first quarter report. According to the 2023 annual report, Ecovacs achieved an operating income of 15.502 billion yuan and a net profit attributable to the parent company of 612 million yuan.
At the same time, Ecovacs disclosed the first quarter report of 2024, the company's operating performance has ushered in a significant improvement after bottoming out in the fourth quarter of last year, with operating income of 3.474 billion yuan in the first quarter, a year-on-year increase of 7.35%, net profit attributable to the parent company of 298 million yuan, an increase of 3449.73% month-on-month, and non-net profit of 287 million yuan, an increase of 847.72% month-on-month.
On April 29, Ecovacs closed at 4.568 billion yuan, and the company's market value increased to about 26.4 billion yuan. The net inflow of main funds in the secondary market on the day was 129 million yuan, and the net inflow hit a new high for Ecovacs shares since September 17, 2021.
Operating income has increased for four consecutive years
After more than 20 years of development, Ecovacs has become a leader in the global household service robot and smart life appliances industry, and its Ecovacs brand service robots and Timco brand smart life appliances have achieved good consumer reputation and performance in domestic and foreign markets, and successfully built a two-wheel drive business model of Ecovacs.
Against the backdrop of the sluggish overall recovery of the domestic consumer market and intensified competition in the industry, Ecovacs still achieved good results in operating income growth in 2023.
In 2023, Ecovacs' operating revenue will reach 15.502 billion yuan, a year-on-year increase of 1.16%, of which the sales revenue of Ecovacs brand service robots will be 7.681 billion yuan, accounting for 49.55% of the total revenue, and the sales revenue of high-end smart living appliances of the Timco brand will be 7.271 billion yuan, accounting for 46.90% of the total revenue. The total revenue of Ecovacs and Timco reached RMB14.952 billion, a year-on-year increase of 1.67% over 2022, accounting for 96.45% of the company's total revenue in the reporting period.
As for the growth of operating income, Ecovacs explained that "it was mainly due to the growth of operating income of Timco brand smart household appliances during the reporting period." ”
Wind data shows that since 2020, Ecovacs' operating income has continued to grow for four years.
According to the monitoring data of Zhongyikang, the retail sales of all-round, self-cleaning, self-cleaning and stand-alone sweeper products accounted for 79.8%, 13.7%, 0.7% and 5.8% respectively in the domestic online market. Among them, the all-round product has been fully popularized, and the retail sales have increased by 74.6% compared with 2022, becoming the main force driving the growth of the sweeping robot market.
In 2023, the revenue proportion of all-round products in Ecovacs brand sweeping robots will further increase to 79.9%, an increase of 29.2 percentage points over 2022, the shipment of all-round products will reach 1.551 million units, an increase of 68.6% over 2022, and the total shipment of Tim Kefuwan series floor scrubber products will be 3.227 million units, an increase of 25.4% over 2022.
It can be seen that the form and function of sweeping robot products continue to innovate, showing a development trend of intelligence, efficiency and personalization, and technological innovation is the solid foundation and source of development of Ecovacs, the company has long attached great importance to R&D and innovation, and continues to firmly invest in R&D.
Ecovacs' 2023 annual report shows that the company's R&D expenditure was 877 million yuan, an increase of 17.87% over 2022. At the same time, the company pays attention to R&D efficiency and achievement conversion to ensure that R&D results are quickly transformed into actual productivity.
The sales growth in overseas markets is eye-catching
With diversified product strength and high-quality and convenient services, Ecovacs continues to win the recognition of the global market and consumers.
In 2023, Ecovacs will set up an overseas headquarters in Singapore, which will be used as a base to aggregate global resources, optimize the operation network, and strive to increase the market share in the Asia-Pacific region, strengthen the global market coverage capability, and promote the continuous expansion of business scale.
Under the Ecovacs brand, Ecovacs actively deepened its existing overseas market layout, continued to expand into new market areas, and drove positive growth in all major overseas business regions during the reporting period. Especially in the European market, the Ecovacs brand relied on the long-term cooperation foundation established with direct channels to accurately grasp the market demand, driving sales revenue to increase by 40.5% compared with 2022. Under the Timco brand, Ecovacs actively explores new markets such as Central Europe, Russia and the Middle East to expand its business territory, and at the same time, continues to tap the potential of core markets such as the United States to deepen its business development.
With the layout of overseas markets, the brand recognition and influence of Ecovacs brand in overseas markets have also been continuously improved, which has been widely recognized by overseas consumers and expanded sales revenue.
According to the 2023 annual report, Ecovacs' overseas operating income was about 6.522 billion yuan, a year-on-year increase of 25.76% over 2022, and the gross profit margin was 51.81%, an increase of 7.16 percentage points over 2022.
The continuous expansion of revenue and brand value has also brought Ecovacs a lot of honors. In 2023, Ecovacs will once again be listed in the "BrandZ Top 50 Global Brands in China" released by Google and Kantar, further demonstrating the company's competitiveness and brand value in the global market.
For the next overseas market development plan, Ecovacs said that the company will rely on its business coverage and market accumulation foundation in overseas markets, fully explore and grasp market opportunities, deeply cultivate traditional overseas markets, actively explore emerging economies, formulate targeted development strategies, and achieve rapid response to global markets and resource network construction through overseas headquarters, so as to continue to create value growth.
In addition, Ecovacs said in its 2023 annual report that the company will also increase its resources and energy investment in overseas markets, continuously innovate and optimize its product portfolio, actively expand new channels and new models, continue to expand its business scale, increase the proportion of revenue from overseas markets, and achieve a more balanced revenue contribution. "In 2024, the Ecovacs brand will be driven by cutting-edge technology, actively promote the implementation of a new generation of sweeping robot products in overseas markets, and strive to synchronize the new products between China and overseas markets, so as to ensure that global consumers can experience the company's latest innovations and further consolidate and enhance the company's competitive position in the international market. ”
The performance in the first quarter rose nearly 35 times from the previous quarter
At the same time as disclosing the 2023 annual report, Ecovacs also disclosed the first quarter report of 2024, with an operating income of 3.474 billion yuan, a year-on-year increase of 7.35%, and a net profit attributable to the parent company of 298 million yuan, an increase of 3449.73% month-on-month.
From the perspective of operating income, the revenue growth rate of Ecovacs in the first quarter of 2024 is the fastest growth in the past five quarters, and from the perspective of net profit indicators, compared with the third and fourth quarters of 2023, the net profit attributable to the parent company in the first quarter of 2024 has improved significantly.
From the perspective of gross profit margin, Ecovacs' gross profit margin increased by 0.7 percentage points quarter-on-quarter and net profit margin increased by 8.4 percentage points quarter-on-quarter in the first quarter of 2024.
Huaan Securities believes that Ecovacs' performance in the first quarter of 2024 exceeded expectations. The growth rate of the company's dual brands has accelerated, and the sweeping category has picked up and the new T30 series has returned to domestic sales after the product is replenished; the floor washing category continues to increase, and the ASP is still declining but the decline has been greatly narrowed, and it is expected that the downward space will continue to be limited in the second quarter, and the share of Timco will almost stabilize; the high growth of dual brands at the export end continues and the overseas proportion increases, and it is expected that the growth of new products after the launch will be further accelerated in the second quarter.
From the perspective of cost control, in the first quarter of 2024, Ecovacs' sales and management fees decreased significantly, and its net profit margin recovered significantly quarter-on-quarter.
"According to our analysis, there are also three major reasons behind Ecovacs' profit repair, and the follow-up repair will continue to be visible. First, the gross profit margin has been restored, the gross profit margin of the Ecovacs brand in Q1 has stabilized, and the Timco brand has been repaired to the 23H1 level beyond 23H2, and it is expected to further increase with the increase in the proportion of new products with high gross profit and overseas; second, the overall expense rate in Q1 has improved by -7.2pct month-on-month, and the R&D investment is still increasing by 1.9pct month-on-month, and the sales rate has been significantly reduced by -10pct, indicating that the company has increased its attention to profitability and has significantly changed its operation and control; , becoming an additional incremental catalyst under the restoration of the dual main business. Huaan Securities said.
For the earnings outlook, some institutional investors have raised the performance forecast of Ecovacs.
"We raised our profit forecasts for 2024-2025 to 1.28 billion yuan and 1.57 billion yuan respectively (the previous value was 940 million yuan and 1.21 billion yuan), and added 1.82 billion yuan in 2026, an increase of 108%, 23% and 16% year-on-year respectively." ”