Event: The company released its 2024 semi-annual report. In 2024H1, the company achieved total operating income of 0.697 billion yuan, or -31.90% year-on-year; realized net profit to mother 0.041 billion yuan, or -69.82% year-on-year. Among them, the total revenue of 2024Q2 in a single quarter was 0.349 billion yuan, or -42.97% YoY; net profit to mother was 0.004 billion yuan, or -95.23% YoY.

Affected by the downturn in the industry, the revenue of various businesses is under pressure. By product: The company's 2024H1 integrated stove/washer/other products achieved revenue of 0.595 billion yuan/67.9 million/34.54 million yuan respectively, or -33.00%/-17.54%/-11.79% year-on-year, mainly affected by the external economic environment and the downturn in the industry.

Profitability has declined, and expense ratios have fluctuated greatly. Gross profit margin: The gross margin of the 2024Q2 company was -0.53 pct year over year to 46.97%. Rate side: The 2024Q2 sales/management/R&D/finance rate was 31.43%/8.80%/8.13%/-1.73%, with a year-on-year change of 8.89pct/4.55pct/2.37pct/-0.55pct. Net interest rate: The company's 2024Q2 net interest rate changed year-on-year - 13.62pct to 0.57%.

Focus on product R&D innovation and strengthen omnichannel development strategies. During the reporting period, the kitchen appliance market changed from being driven by incremental demand to being driven by stock exchange demand. The company actively adapted to environmental changes, promoted product innovation such as the Q35BCZ independent integrated stove; and actively implemented a “combination of online and offline, distribution, direct management and e-commerce” sales strategy. According to AVC (AVC) omni-channel summary data, the company's e-commerce business has been number one in the online sales and sales integrated stove industry for many years.

Profit forecasting and investment advice. Considering the company's performance in the first half of 2024 and the overall environment of the integrated stove industry, we expect the company to achieve net profit of 0.15/0.17/0.186 billion yuan in 2024-2026, an increase of -39.4%/13.2%/9.6% over the previous year, maintaining a “buy” investment rating.

Risk warning: raw material prices fluctuate, real estate market fluctuation, and market competition intensified.