Introduction to this report:

The company announced a new phase of equity incentives. Through the establishment of a long-term incentive mechanism, it hopes to further absorb and retain outstanding talents and lay a solid foundation for long-term development.

Key points of investment:

Maintain the increase in holdings. Maintain the 2024-26 EPS forecast of 3.6/4.17/4.79 yuan, a growth rate of 18/16/ 15%, maintain the target price of 83.59 yuan, and maintain the increase in holdings.

The company announced the 2024 restricted stock incentive plan (draft): 1) It plans to grant about 5.25 million shares of restricted shares at 40.62 yuan/share, accounting for about 0.99% of the total share capital at the time of the announcement, of which 4.2 million shares were granted for the first time and 1.05 million shares were reserved; 2) The plan is to grant incentives to no more than 305 people for the first time, including directors, executives, core technical and business personnel (including foreign employees); 3) The performance assessment target is revenue and profit, based on 2023: ① 2024 revenue growth rate of at least 10%, 2025 revenue Growth rate ≥ 20%; ② 2024 deducted non-net profit growth rate (excluding share payment fees) growth rate ≥ 10%, 2025 non-net profit growth rate ≥ 20%; ③ If restricted shares granted are granted after the announcement of the third quarterly report, the assessment year for the reserved portion is 2025-26, the assessment conditions for the 2025 period remain unchanged, and the 2026 revenue growth rate or deducted non-net profit growth rate of at least 30%; 4) Stock payment fees are approximately 124 million yuan, of which 2024-26 is 46.84, 6141, and 15.26 million yuan respectively.

Through the establishment of a long-term incentive mechanism, outstanding talents will be gathered and the foundation for long-term development will be laid.

We believe that 1) through equity incentives, we will attract and retain outstanding talents, fully mobilize the enthusiasm of employees, and effectively combine shareholders' interests, company interests and employees' interests, so that all parties can focus on the long-term development of the company; 2) Recently, the company's 2023 restricted stock incentive plan granted some achievements during the first ownership period. 164 incentive recipients were granted for the first time that met the ownership conditions, and 1.32 million shares of restricted shares were granted for the first time; 3) The company's long-term incentive mechanism was streamlined, and considering the strengthening of talent recruitment in recent years , the launch of the Tinder Plan, etc., I am optimistic that per capita income generation will continue to increase in the short term, and that the cultivation of elite talents will lay a solid foundation for continuous development in the long term.

Based on the core values of “first nature, seeking perfection, and growing together”, it sets the standard for strong people going overseas.

1) “BrandZ? The “2024 China Top 50 Global Brands” list was released. The company ranked 16th and number 1 for electronic product accessories, and was on the list for 8 consecutive years; 2) Although international logistics prices have risen since Q2, the company's scale effect is strong, the company has adopted long-term prices/light and small packaging to hedge part of the influence, and management resilience is better than peers; 3) Deepening innovative research and development on the product side, and technologies such as real-time visual understanding on the layout side, and multi-modal AI perception and decision-making systems; 4) Exploring new platform business and development opportunities, hoping to benefit from the rise of emerging channels and markets; 5) We are optimistic about Q2 Energy/security Continuing impressive performance, small to medium chargers, headphones, etc. continued to grow rapidly, and the performance side may be better than previously expected.

Risk warning: Third-party platform operating risks, tariff and international trade friction risks, intensifying industry competition, falling short of expectations, etc.