Core views:

24Q2 revenue growth accelerated, and performance was steady. The company disclosed the 2024 semi-annual results report. 2024H1 achieved operating income of 10.96 billion yuan, a year-on-year increase of 9.8%, and achieved net profit to mother of 0.94 billion yuan, a 6.8% year-on-year increase, and a net interest rate of 8.6%, a year-on-year decrease of 0.2 pct. 2024Q2 achieved operating income of 5.59 billion yuan, a year-on-year increase of 11.3%, and achieved net profit of 0.47 billion yuan, a year-on-year increase of 6.4%, a net profit margin of 8.4%, and a year-on-year decrease of 0.4 pct. In a weak domestic demand environment, the 24q2 revenue growth rate accelerated by 2.9 pct month-on-month, demonstrating leading strength. The main reason: (1) Domestic sales business, domestic sales revenue increased slightly over the same period, and the online and offline market share of core categories continued to increase. (2) Export sales business. In the same period last year, the company's main export customers were in the inventory removal stage, and the base was low. As demand picked up after inventory removal in the European and American markets, orders from the company's main export customers increased significantly year-on-year, and export sales revenue grew rapidly. Profit growth is slower than revenue growth. We believe gross margin has declined mainly due to intense competition in the industry.

As a leader in small household appliances, the company's revenue and performance are expected to maintain steady growth. In the short term, as overseas customers end inventory removal, the company's export business has achieved rapid growth. In the long run, overseas demand is resilient, and export sales are expected to continue to grow. At the same time, as a leading domestic kitchen appliance, the company's share continues to increase, and domestic sales are expected to grow.

Profit forecasting and investment advice. Assuming that the small household appliance industry pattern is stable, and domestic and foreign demand is steady, it is expected that the net profit from 2024-2026 will increase 5.4%, 6.6%, and 6.5% year-on-year respectively. As the leading small household appliance company, its market share will continue to increase, and the company's revenue and profit will achieve steady growth. The company will be given 18xPE in 2024, corresponding to a reasonable value of 51.57 yuan/share, maintaining a “buy” rating.

Risk warning. Raw material prices have risen; consumption upgrades have fallen short of expectations; overseas markets are weak; and the competitive pattern of the industry has deteriorated.