Revenue performance was generally in line with expectations. Supor 2024Q1-3 achieved operating income of 16.512 billion yuan, an increase of 7% year on year; realized net profit of 1.433 billion yuan, an increase of 5% year on year; realized net profit after deducting non-return to mother of 1.405 billion yuan, an increase of 5% year on year. Among them, in the Q3 single quarter, the company achieved operating income of 5.548 billion yuan, a year-on-year increase of 3%; realized net profit of 0.492 billion yuan, a year-on-year increase of 2%; and realized net profit without deduction of 0.482 billion yuan, an increase of 1% over the previous year. The company raised the estimated amount of daily related transactions with SEB Group in 2024 to 6.95 billion yuan (previous value was 6.2 billion yuan), +17% compared to 2023.

Domestic sales outperformed the industry, and channel competitiveness was remarkable. In terms of domestic sales, the company achieved the best performance of traditional e-commerce and Douyin in terms of overall market share. According to data from Aowei Cloud Network, Supor's sales in the small kitchen appliance market are superior to the industry level, and its online and offline market share has increased, ranking first in the industry. Sales of 2024Q1-3 industry-side air fryers/rice cookers/electric kettles/wall breakers fell 30%/4%/6%/11% respectively, but the company achieved superior growth to the industry, mainly benefiting from tight demand in sales categories and continuous innovation on the product side. According to Jiuqian online data, the company's 24Q3 online revenue was +1.5% YoY, of which the Douyin platform's revenue was +21% YoY. The company's two major business segments superimpose new categories of businesses such as cleaning appliances and coffee machines, and continue to expand. It is hoped that the new categories will drive continuous and steady growth in the future. In terms of channels, the company has demonstrated strong competitiveness, and offline O2O and B2B channels have performed well.

Export sales raised related transaction quotas, profoundly benefiting from the completion of inventory removal and demand recovery from major customers. In terms of export sales, the company issued the “Notice on Increasing the Estimated Amount of Daily Related Transactions in 2024”, which raised the amount of daily related transactions with SEB in 2024 to 6.95 billion yuan (previously estimated at 6.2 billion yuan), an increase of 17% over 2023. SEB Group, an affiliate of the company, is confident that sales will increase throughout the year. The overall overseas recovery trend in the first half of the year was obvious. Under the influence of completed overseas inventory removal/weak inventory replenishment+ low base, the company's export sales increased significantly. Furthermore, in the face of the imposition of tariffs by the US and rising overseas freight rates, the company's overseas factories are fully prepared, do not account for a high share of sales in the US, and the risk is manageable.

Excellent cost control. The company's 24Q3 gross margin level remained stable, with a slight decrease of 0.76 pcts year on year. The main reason was the restructuring of the product structure and domestic and foreign sales share; in terms of costs, the company's 24Q3 cost ratio still maintained a good level of control and high marketing efficiency. The 24Q3 sales expense ratio was -0.98 pcts year over year, and the R&D cost ratio was +0.19 pcts year over year, which is in a virtuous cycle.

Maintain profit forecasts and “buy” ratings. We maintained our 24-26 profit forecast of 2.32/2.54/2.66 billion yuan, with year-on-year growth of 6.2%/9.8%/4.7%, respectively, corresponding PE 19/17/16 times, respectively. Considering that the company is a leading enterprise in traditional small household appliances, while consolidating the dominant position of traditional e-commerce platforms, domestic sales continue to increase investment in new e-commerce platforms such as Douyin and accelerate the successful implementation of the online channel transformation strategy; export sales are growing steadily, and the company's market competitiveness continues to stand out, maintaining a “buy” rating.

Risk warning: raw material price fluctuation risk, exchange rate fluctuation risk.