The company released its 24-year semi-annual report

24Q2 revenue was 0.4 billion, down 5%; net profit to mother was 0.09 billion, down 14%; 24H1 revenue was 0.7 billion, down 1%; net profit to mother was 0.14 billion, down 4%; 24H1 main business revenue was divided by model: online 0.45 billion, accounting for 65% of main business revenue and 0.24 billion offline, accounting for 35% of main business revenue.

24H1 gross profit margin was 54.4%, up 5.2 pct; net profit margin to mother was 20.2%, down 0.8 pct; of these, the sales expenses rate of 23.3% increased by 5.1 pct, mainly due to an increase in e-commerce platform promotion costs, advertising expenses, etc.;

The company has achieved brand building, channel expansion, intelligent production, product innovation and overall cost efficiency improvement1. Sales side: Adhering to the omni-channel layout, it has accelerated the layout of the retail system and achieved collaborative development online and offline through the “pioneering and revitalizing” and “building a retail benchmark city” actions. The company has not only consolidated its leading position in offline channels, but also increased customer stickiness and market coverage of online channels through digital marketing methods such as Douyin live streaming and short videos.

2. Brand side: Promote brand rejuvenation, build a structured and integrated marketing communication matrix, achieve product and sales integration, and enhance the brand's visual image and market awareness. Through accurate advertising on online platforms and high-speed rail stations, the company effectively enhances brand public domain traffic and conversion rates.

3. Product side: Increased investment in innovative research and development, established a feedback system centered on user needs, and strengthened product planning capabilities through big data. The company has achieved breakthroughs in many key technical fields and maintained the market competitiveness of its products.

4. Manufacturing side: Implementing all-round cost management and flexible supply chain construction, improving production efficiency and product quality through automation and informatization.

5. Management side: Strengthen the integrated and coordinated development of online and offline business to achieve leading market share across the network; establish an end-to-end process system to improve organizational operation efficiency.

Adjust profit forecasts to maintain “buy” ratings

As the absolute leading brand in the smart drying segment in the smart home industry, the company has competitive advantages in technology research and development, product innovation, manufacturing, quality control, brand building, sales channels, and user service. Based on 24H1's performance, indicators such as the company's revenue and net profit to mother declined to varying degrees. At the same time, considering the impact of consumer confidence, we adjusted the profit forecast. We estimated that the return for 24-26 was 0.34, 0.37, and 0.42 billion yuan respectively (the original value was 0.41/0.48/0.56 billion yuan, respectively); PE was 14X, 13X, and 12X, respectively.

Risk warning: risk of changes in global trade policies; risk of changes in market consumption preferences; risk of market competition; risk of seasonal market fluctuations; risk of overseas operations, etc.