Key points of investment

The deduction did not exceed expectations, 24Q2 +50%

24H1's performance was steady, and both revenue and net profit to mother exceeded expectations. Revenue of 9.65 billion yuan (+37%, all of the following increases); net profit attributable to mother 0.87 billion yuan (+6%); net profit not attributable to mother 0.77 billion yuan (+41%).

24 Q2 revenue +42%, net profit to mother +9%. Revenue of 5.27 billion yuan (+42%); net profit attributable to mother of 0.56 billion yuan (+9%); net profit without return to mother of 0.45 billion yuan (+50%).

24H1 expense ratio: gross profit margin 45.2% (+2pct), net profit margin 9.4% (-3pct), sales expense ratio 21.9% (+0.6pct), management expense ratio 4.1% (+1.1pct), R&D expense ratio 8.3% (-0.2pct). Expense rate increases are mainly due to increased employee remuneration, marketing and platform commissions.

Charging energy storage is still the core business, with a balanced regional distribution. North America accounts for 48% Product structure: charging energy storage 52% (+2pct) +intelligent innovation 24% (-0.2pct) +smart video 24% (-1pct). Among them, charging energy storage revenue was 4.975 billion yuan, an increase of 43%; intelligent innovation revenue was 2.36 billion yuan, an increase of 35.33%;

Channel structure: Amazon's share declined, and the share of other e-commerce platforms and independent websites increased. Amazon 52% (-4pct) +other three-party platforms 8% (+1pct) +independent site 10% (+3pct) +offline 30% (-1pct).

Regional structure: The share of North America+Europe increased. 24H1 North America and Europe together account for 69% (+3pct) of revenue.

Epitaxial product boundaries, brand power continues to break through

Products are continuously segmented, and product matrices are improved to contribute new momentum to growth. In the field of new energy, after launching the consumer-grade new energy brand series Anker SOLIX in 2023, the product line now includes four major series: outdoor camping C series, home backup and mobile energy storage F series, balcony photovoltaic energy storage solution E series, and household energy storage solution X series. The 24H1 smart security field launched the eufy 4G LTE Cam S330, which can be monitored in high definition without a subscription service. In the cleaning sector, the eufy X10proOmni, which integrates a sweeper and an all-purpose base station, was launched in February '24; the all-purpose floor washing robot eufy S1 Pro was launched in March.

Our brand strength continues to improve, and we have been on the list of global brands in China many times. Anker has been at the top of Google's xKantar Brandz list of global brands in China for eight consecutive years. It is one of the top six consumer electronics brands on the list and number one in the electronic accessories category; in '24, eufy entered the list, ranking 47th.

Profit forecasting and valuation

Anke Innovation is a benchmark for Chinese consumer electronics brands going overseas. The product line has been gradually enriched and improved, and the revenue of independent stations has steadily increased, demonstrating the company's strong brand mentality. The company's 2024-2026 revenue is expected to be 22.1/26.8/32.4 billion yuan, up 26%/21%; net profit to mother is 1.916/2.224/2.736 billion yuan, up 19%/16%/23%, corresponding to PE17/15/12X, maintaining the “buy” rating.

Risk warning: Fluctuations in exchange rates and freight rates, falling short of expectations in product promotion, increased competition in the industry, etc.