Overseas small household appliances are booming, and air purifiers, humidifiers, and air fryers are leading the brand growth.
1) On the industry side, overseas market demand is gradually picking up and is in the inventory replenishment stage, and the scale of the small household appliance industry is expected to continue to rise. 2) On the company side, the current product matrix of the three major brands continues to be enriched, and advantageous categories such as air purifiers, humidifiers and air fryers are expected to lead the company to continue to grow rapidly in revenue and performance.
Levoit: Continue to consolidate its leading edge in environmental appliances and actively expand new categories such as vacuum cleaners and fans. 1) Environmental appliances: In 2023, the company's air purifiers and humidifier categories continued to lead the sales market share in the US market, while tower fan products sold well in both the European and US markets. 2) Cleaning appliances: The company actively lays out new categories of vacuum cleaners. The LVAC-200, a family-friendly pet vacuum cleaner launched by 2023H2, has many cleaning methods and usage scenarios, and its differentiated competitive advantage is quite prominent.
Cosori: The air fryer business is growing rapidly in the European market, and product-side DC motors and double frying basket designs are expected to help growth. 1) Industry side: The global air fryer market has broad room for growth. The market size is expected to reach US$1,431 billion in 2028, and the CAGR will reach +7% in 2023-2028. Among them, the United States, Germany, and India have structural highlights. 2) Company side: The channel side layout is diversified and the European market performance is outstanding. In 2023, both Spain and Norway maintained a leading position in the market, with market shares of about 31.5% and 43% respectively; new product-side DC fryers and products with double frying basket designs are expected to better meet the needs of overseas consumers, thereby contributing to the company's business growth.
Etekcity: Focusing on health monitoring and personal care devices, the interactive experience with the Vesync App is expected to improve with AI. According to GWI's forecast, the global health economy market may reach US$847 million in 2027. As a brand that continues to be deeply involved in the field of health monitoring equipment, Etekcity is expected to share the industry's growth dividends. At the same time, many of the brand's products support connecting to the Vesync app to enable data tracking while urging users to cultivate good living habits through diet recommendations and goal management. We believe that the interactive experience of the company's hardware with the Vesync App is expected to be enhanced by the AI model to help users build healthier living environments and habits in all aspects.
Profit forecast: We expect the company's net profit for 2024-2026 to be 0.96 billion 1.14/131 million US dollars, the corresponding EPS is 0.08/0.10/0.11, and the PE corresponding to the current stock price is 7.77/6.52/5.69 times. Maintain a “buy” rating.
Risk warning: risk of exchange rate fluctuations, risk of factor price fluctuations, overseas geopolitical risk, risk of tight shipping capacity, risk of talent training and development, etc.