Event: The company released its 2024 three-quarter report. The company achieved total operating income of 1.013 billion yuan in 2024Q1-Q3, or -35.51% YoY; realized net profit to mother 0.015 billion yuan, or -93.22% YoY. Among them, 2024Q3's total revenue for a single quarter was 0.316 billion yuan, or -42.29% YoY; net profit to mother was -0.026 billion yuan, or -129.96% 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 -10.36pct year-on-year to 39.08%. Rate side: 2024Q3 Sales/ Management/ R&D/ Finance rate was 30.81%/10.31%/8.60%/-0.25%, year-on-year change

8.28pct/4.22pct/2.74pct/1.25pct. Among them, the increase in financial rates was mainly due to a decrease in interest income. Net interest rate: The company's net interest rate changed year-on-year in 2024Q3 -24.03pct to -8.22%.

Sales volume declined, payouts declined, and cash flow was under pressure. 2024Q3's net operating cash flow was -0.04 billion yuan, down 131.79% year on year. Of these, cash received from sales of products was 0.343 billion yuan, down 48.11% year on year.

Pay attention to product R&D innovation and strengthen omnichannel development strategies. The kitchen appliance market changed from being driven by incremental demand to being driven by stock exchange demand. The company actively adapts to environmental changes, promotes product innovation and development; and actively implements a sales strategy of “combining online and offline, distribution, direct management and e-commerce”. According to Aowei Cloud Network (AVC) omni-channel summary data, the company's e-commerce business has ranked first in the online sales and sales integrated stove industry for many years.

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 0.025/0.142/0.156 billion yuan in 2024-2026, an increase of -90.0%/477.3%/9.6% over the previous year, maintaining a “buy” investment rating.

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