According to the Wisdom Finance APP, cisi fin released a research report stating that it maintains a "buy" rating for Quanfeng Holdings (02285), and expects operating income in 2024-2026 to reach 16.55, 19.22, and 2.198 billion US dollars respectively, with adjusted net income reaching 1.31, 1.50, and 0.178 billion US dollars. In 2024, the year-on-year loss is expected to turn to profit. The company is expected to achieve faster year-on-year growth in revenue in 2024 Q3 through balanced development across various channels and categories, with full-year revenue growth expected to exceed the bank's previous forecast of 20% year-on-year growth. On the profit side, with the repair of production scale, low raw material prices, and the rapid growth of EGO expected to drive an increase in gross margin, but exchange rates may have a negative impact.

Profit alert: The company recorded a net income of 0.1 billion US dollars from January to September 2024, a year-on-year increase of over 335%, mainly benefiting from the strong performance of EGO, the end of destocking cycle driving shipment growth, repair of production scale, operational efficiency improvement, and operational expense optimization. The company expects to maintain a revenue growth rate of over 20% for the full year of 2024.

The main points of CISI Fin are as follows:

Rapid growth in online channels, steady development in dealer channels:

The company is focusing on the amazon channel, driving rapid growth in online channel revenue. The proportion of the company's online channel revenue is expected to reach double-digit levels in 2024, and is expected to continue to maintain faster revenue growth than the overall company, leading to a continuous increase in the share of online revenue. In the dealer channel, the company is steadily expanding. The company is advancing cooperation relationships with high-end distributors in major markets in North America, and the distribution policy in Europe is expected to continue to adjust in the future, driving further improvement in gross margin. The dealer channel lays the foundation for the company's continuous efforts in high-end and commercial markets in the future.

Q3 2024 is expected to see an improvement in gross margin compared to the same period last year:

Benefiting from the sales performance of the high-margin brand EGO, the scale effect brought by the recovery of production scale in Q3, and favorable factors such as low prices of raw materials such as lithium batteries, the company's gross margin in Q3 is expected to improve year-on-year. At the same time, exchange rates may bring unfavorable effects. The company continues to operate in a refined manner, strictly controlling management expenses, while steadily investing in marketing and research and development expenses.

Downstream retailers' inventory has returned to a relatively healthy level:

The company's OPE and power tools continue to benefit from downstream retailers entering a replenishment cycle, driving growth at the company's delivery end. In Q4, downstream retailers' inventory has returned to a relatively healthy level, and it is expected that subsequent replenishment by downstream retailers will maintain a relatively consistent pace with POS end growth. At the same time, EGO is expected to achieve a growth rate faster than the industry average in the context of continued weak demand at the downstream end of the industry.