Core views:

Since August, Stone has been intensively releasing new sweepers. According to Tmall flagship store information, domestic: Specifically, it includes three models: P20 Pro (released on August 26, latest price 3999 yuan), P10S Pure (released on August 26, latest price 2,499 yuan), and G20s Ultra (released on September 5, latest price 4999 yuan), which have both groundbreaking technology and mid-range cost performance. Overseas, according to the official website, Stone's two new products, Qrevo Curv and Qrevo Slim, are expected to become new growth points for overseas revenue since August.

On the domestic side, as of August 31, 2024, sales in the sweeper category increased 20.5% year on year, and sales increased 16.5% year on year. According to data from Aowei Cloud Network, online sweepers have sold 1.946 million units since this year, +17.5% compared with the same period last year. The average online price in the industry was 3,289 yuan, +3.01% year over year, showing a sharp rise in volume and price. In the face of increasingly fierce competition in the industry, Stone's best-selling models in August, the P10S PRO (water and sewage version) and P10S PRO accounted for 7.69% and 7.06% of the market sales, respectively, reflecting Stone's unique resilience. Since August, Stone's new ultra-cost-effective classic model, the P10S Pure, is expected to become an important growth point for Stone's revenue; in terms of high-end products, such as G20Sultra's new ultra-thin high-end flagship product, it is expected that it will quickly occupy the high-end market.

Overseas, Stone continues to expand overseas markets. In 2023, the market share in Western Europe, Middle East & Africa, developing Asia, Russian-speaking regions and other regions has exceeded 50%. From 2020 to 2023, in the face of increasingly fierce competition in overseas markets and large fluctuations in foreign exchange, Stone's market share in Western Europe, developing Asia and other places can continue to increase, fully reflecting the resilience of the brand. Although sales market share in the Middle East and Africa declined, the overall sales market remained within a manageable range.

Profit forecast and investment advice: Net profit to mother is expected to increase 24.2% and 17.5% year-on-year in 24-25, corresponding to 17 times PE in 24. Referring to comparable company valuations and the growth rate of sweepers compared to the traditional small household appliance industry, the company was given 20 times PE in 24 years, corresponding to a reasonable value of 276.14 yuan/share, giving it a “buy” rating.

Risk warning: Competition in the cleaning appliance industry has intensified, the price of raw materials has risen sharply, and the penetration rate of sweepers falls short of expectations.