Event: The company released its 2024 three-quarter report. In 2024Q1-Q3, the company achieved total operating income of 7.396 billion yuan, -6.78% YoY; realized net profit to mother of 1.202 billion yuan, or -12.44% YoY. Among them, 2024Q3's total quarterly revenue was 2.666 billion yuan, -11.07% YoY; net profit to mother was 0.443 billion yuan, or -18.49% YoY.

Traditional categories remain stable, and the offline market is superior to the online market. Looking at the overall situation of the industry, the range hood and dishwasher categories of kitchen appliances all maintained a steady trend in the first three quarters of 2024. Traditional categories were slightly better than emerging categories, and the offline market was superior to online. According to data from Aowei Cloud Network, the 2024Q1-Q3 range hood/dishwasher/integrated stove online market size was +4.2%/+4.5%/-41.8%, respectively; the 2024Q1-Q3 range hood/dishwasher/integrated stove market size was +13.8%/+12.3%/-4%, respectively.

Gross margin was relatively stable, and net profit margin declined. Gross profit margin: 2024Q3's gross margin increased 0.99pct year-on-year to 53.18%. Rate side: The 2024Q3 sales/management/R&D/finance rate was 28.24%/4.79%/3.67%/-1.52%, with a year-on-year change of 2.26pct/0.68pct/0.12pct/-0.3pct. Net interest rate: The company's 2024Q3 net interest rate changed year-on-year - 1.58pct to 16.38%.

Cash flow is under pressure. 2024Q3's net operating cash flow was 0.112 billion yuan, down 74.3% year on year, mainly due to reduced repayments and increased payments to suppliers. Among them, cash received from sales of goods was 2.682 billion yuan, a year-on-year decrease of 9.03%.

Profit forecasting and investment advice. Considering the company's performance in the first three quarters of 2024 and the overall environment of the kitchen appliance industry, we expect the company to achieve net profit of 1.557/1.693/1.802 billion yuan in 2024-2026, an increase of -10.1%/8.7%/6.4% year-on-year, and maintain an “increase” investment rating.

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