Incident: The company released 24H1 results, achieving revenue of 9.648 billion yuan/yoy +36.55%, net profit attributable to mother of 0.872 billions/yoy +6.36%, after deducting net profit of 0.766 billion yuan/yoy +40.53%.

24Q1/24Q2 achieved revenue of 4.378/5.271 billion yuan, +30.09%/+42.43% YoY, net profit to mother 0.311/0.561 billion yuan, +1.60%/+9.19% YoY, net profit of 0.315/0.45 billion yuan after deducting non-return net profit of 0.315/0.45 billion yuan, +29.04%/+49.89% YoY. The difference in the growth rate between net profit deducted from non-current financial assets held by the company and measured at fair value is mainly due to fair value change income generated by participating investment companies held by the company in the current period. The amount of non-recurring profit and loss was 0.074/0.208 billion yuan in 24H1/23H1, respectively.

Comment:

24H1 plans to pay a cash dividend of 0.6 yuan per share. For the first time since listing, an interim dividend will be implemented, focusing on shareholder returns. 24H1 plans to pay a cash dividend of 0.6 yuan per share, with a total cash dividend of 0.319 billion yuan, and a dividend rate of 36.56%. This is the first time since the company went public that an interim dividend was implemented. The cumulative dividend rate for 2023 was 50.35%, and the annual dividend rate increased for two consecutive years against the backdrop of continued profit growth.

Continued investment in R&D and promotion, all three core business segments have performed well. By product: 1) As the company's cornerstone business, 24H1 continues to achieve rapid growth through continuous breakthroughs and promotions, achieving revenue of 4.975 billion yuan, an increase of 42.81%, accounting for 51.56% of total revenue. In the field of digital charging, the AnkerMaggo ultra-fast magnetic wireless charging series with Qi 2.0 certification, a new series of products co-branded with the classic IP “Cat and Mouse”, and AnkerZolo's own dual-wire travel power bank were launched. In the field of new energy, the company launched the consumer-grade new energy brand series AnkerSolix in 2023, which aims to provide green energy solutions for all home and outdoor scenarios. 24H1, AnkerSolix launched the first outdoor power supply AnkerSollXC800Plus and the AnkerSolixx1 household energy storage system with three built-in camping lamp modes. 2) Intelligent innovation categories include product lines such as eufy (Eufy) smart home and AnkerMake3D printing. 24H1 achieved revenue of 2.36 billion yuan, an increase of 35.33%, accounting for 24.46% of total revenue. The eufy brand's two core product lines, eufySecurity (smart home security) and eufyClean (home intelligent deep cleaning solution), launched the outdoor safety solution product eufy4glteCams330 with high-definition surveillance at 24H1, as well as new products such as eufyX10proOmni and eufys1Pro all-purpose floor washing robots that integrate a sweeper and an all-purpose base station. 3) The smart video product 24H1 achieved revenue of 2.309 billion yuan, an increase of 30.84% over the same period, accounting for 23.93% of total revenue. New products launched by 24H1 include SoundCoreC30i earclip headphones in the field of wireless Bluetooth headsets, SoundCoreBoom2 and its plus outdoor portable Bluetooth speakers in the field of wireless Bluetooth speakers, and AnkerWorks 600 speakers from the smart office brand AnkerWork.

Looking at the subregions, mature markets such as North America and Europe are still contributing major increases, while key potential markets such as Australia and mainland China are seeking strength. The top three markets for 24H1 revenue were North America, Europe, and Japan, which achieved revenue of 4.63/2.05/1.29 billion yuan, an increase of 41%/45%/22%, accounting for 48%/21%/13%; the Middle East and mainland China achieved relatively rapid growth. 24H1 achieved revenue of 0.568/0.377 billion yuan respectively, an increase of 39%/39%, accounting for 6%/4%; and the Australian market achieved revenue of 0.344 billion yuan, an increase of 23%, accounting for 4%.

Looking at each channel, the company continues to explore new platform business and development opportunities, and third-party platforms and independent websites other than Amazon have achieved remarkable growth. 24H1 achieved online and offline revenue of 6.73/2.92 billion yuan respectively, an increase of 38%/32%, accounting for 70%/30%. Among them, online is divided into Amazon, other third-party platforms, and independent websites. 24H1 achieved revenue of 0.504/0.76/0.93 billion yuan respectively, an increase of 28%/67%/103%, accounting for 52%/8%/10%. In addition to Amazon, the company continues to develop better cooperation with well-known e-commerce platforms such as JD, Tmall, AliExpress, eBay, and Douyin; at the same time, it also lays out six independent websites: Anker, eufy, Soundcore, Nebula, AnkerWork, and AnkerMake.

Financial analysis: 24H1 gross profit margin was 45.18%, up 2.00pct year on year, with a year-on-year increase of 0.41pct. Sales/management/financial/R&D expense ratios were 21.92%/4.14%/-0.12%/8.29%, respectively, +0.62/+1.05/-1.08/-0.19pct, respectively, net profit margin 9.04%, year-on-year -2.57pct, net profit margin 7.94% year-on-year, +0.22pct year-on-year. We expect the increase in gross margin mainly due to continuous promotion and product structure optimization, excluding the impact of non-recurring profit and loss, narrowing gross sales margin and increasing net margin.

Profit forecast: According to Wind's agreed expectations, the company is expected to achieve net profit of 1.973/2.371/2.826 billion yuan in 24/25/26, an increase of 22%/20%/19%, corresponding to the closing price PE on September 6, 2024 of 17/15/12X, respectively.

Risk factors: Overseas macroeconomic uncertainty, exchange rate fluctuations, increased industry competition, new product launches & sales fall short of expectations.