Event: The company released its 2024 three-quarter report. The company achieved total operating income of 0.449 billion yuan in 2024Q1-Q3, or -52.45%; realized net profit to mother of -0.011 billion yuan, or -106.30% year-on-year. Among them, 2024Q3's total quarterly revenue was 0.106 billion yuan, -67.57% YoY; net profit to mother was -0.029 billion yuan, or -159.52% YoY.

Affected by changes in the real estate environment, the integrated stove industry is under pressure. Omni-channel retail sales continued to shrink. In the first three quarters of 2024, the scale of online and offline retail sales of the integrated stove industry declined by 41.8% and 4%, respectively; online consumption was downgraded, and the average offline price of the integrated stove industry was still rising. The average online and offline prices of the integrated stove industry in the first three quarters of 2024 were -8.5% and +4.1%, respectively.

Profitability has declined sharply. Gross profit margin: 2024Q3 companies' gross margin was -22.2pct year-on-year to 23.86%.

Rate side: 2024Q3 Sales/ Management/ R&D/ Finance rate was 30.83%/11.12%/10.02%/2.37%, year-on-year change

7.31pct/5.1pct/5.44pct/4.04pct The increase in financial rates is mainly due to an increase in interest charges on convertible bonds. Net interest rate: The company's net interest rate changed year-on-year in 2024Q3 - 41.66pct to -26.94%. The sharp decline in revenue has led to large fluctuations in the company's gross margin and expense ratio.

Sales orders have declined, repayments have declined, and cash flow is under pressure. 2024Q3's net operating cash flow was 0.025 billion yuan, a year-on-year decrease of 76.32%. Of these, cash received from sales of products was 0.137 billion yuan, a year-on-year decrease of 59.36%.

Continue to promote product iteration and improve channel efficiency. The integrated stove market is under overall pressure and consumption growth has clearly slowed. The company actively resists market risks and pressures, continues to develop and produce high-end, intelligent, integrated, green and unmanned kitchen appliances, and built a diversified product matrix; the company continues to cultivate distribution channels, expand e-commerce channels, broaden home improvement and KA channels, enter sinking channel outlets, and take more measures to vigorously improve channel efficiency.

Profit forecasting and investment advice. Considering the company's performance in the first three quarters of 2024 and the overall environment of the integrated stove industry, we expect the company to achieve net profit of 0/0.06/0.066 billion yuan in 2024-2026, an increase of -99.8%/13522.9%/9.7% year-on-year, and maintain an “increase” investment rating.

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