Start a new journey of globalization and open up room for growth
In the long run, the company embarks on a new journey of brand globalization, and the growth path is clear; in the short term, tax rebates from subsidiaries increase current profits. Combined with the new products released by the company this year and its sales performance, we believe that the company's product development advantages and leading position are becoming more obvious, and it is expected to become a global leader. In view of the subsidiary's significant tax rebate revenue, our 2024-2026 EPS was 19.64, 22.62, and 25.90 yuan (previous values: 18.89, 22.24, and 25.47 yuan), which is comparable to the average PE expected by Wind in 2024 to 18.77 times. The company has obvious product advantages and flexible performance growth, giving the company 25 times PE in 24 years and a target price of 491 yuan (previous value: 472.25 yuan), maintaining the “buy” rating.
Start a new journey of brand globalization
In 2023, the company's high-end new product, the S8 pro ultra series, achieved a breakthrough overseas, and the company's position in overseas markets was further enhanced with excellent product performance. In the same year, the company first entered Target, an offline physical retail channel in the US, and received widespread consumer recognition through continuous brand investment. Based on this, in 2024, the company will strengthen global operations, expand overseas KA chain stores, and further enrich offline sales channels. On the product side, the company accelerated the introduction of Q revo series products. The Q revo series is priced at around 1,000 US dollars. It complements the S8 maxv series in terms of price and accelerates product promotion and popularization.
Subsidiaries' tax rebates boost current profits
On the evening of June 3, the company announced that its wholly-owned subsidiary Stone Innovation has been recognized as a key software enterprise encouraged by the state. According to relevant preferential tax policies, Stone Innovation can apply for an exemption from corporate income tax in 2023. According to the company's disclosure, Stone Innovation's net profit in 2023 was 1,027 billion yuan, and the applicable corporate income tax rate was 15%. Based on this, we calculate the current corporate income tax refund revenue of about 150 million yuan, increasing the annual profit.
With the best-selling generation and the reserve generation, the company's product leadership is becoming more and more obvious. Currently, the global sweeper industry is still in a supply-led development stage, and product strength is the key to brand competition. In addition to the new P10S series selling well in February of this year, the company is also trying to promote next-generation product platforms. On March 29, the company launched the self-cleaning robot V20. The V20 is equipped with a new-generation laser navigation obstacle avoidance system, which supports ultra-accurate mapping and obstacle recognition. We believe that as one of the underlying key technologies for sweeping robots, upgrading the performance of laser navigation and obstacle avoidance systems will bring continuous innovation at the application level and continuously optimize the product experience. The company's product development advantages and leading position have been consolidated and strengthened.
Risk warning: increased market competition; risk of high inflation overseas; risk of new products falling short of expectations.