Incident: The company achieved operating income of 1.01 billion yuan in 24Q1-Q3; net profit to mother of 15.09 million yuan, -93.22% year over year; net profit of 8.85 million yuan after deducting non-return to mother, -95.65% year on year. Among them, 24Q3 achieved operating income of 0.32 billion yuan, or -42.29%; net profit to mother of -25.95 million yuan, or -129.96% year-on-year; net profit after deducting non-attributable net profit of -27.03 million yuan, or -134.54% year-on-year.
Revenue is under pressure, and favorable policies have boosted recovery. Currently, China's integrated category market is still in an adjustment period. The feedback behind this is the impact of the downturn in the real estate industry on new demand. According to Aowei sample data, 24Q3 integrated stove online/offline KA sales reached 0.51/0.09 billion yuan, respectively, -35%/-9%; during the same period, the Martian brand's online/offline KA sales reached 0.12/0.02 billion yuan, respectively, with sales market share of about 23%/20%, respectively.
With the in-depth implementation and implementation of the trade-in policy, the demand side of the kitchen appliance market has been clearly boosted recently. According to Aowei high-frequency data, online/offline KA sales for integrated stoves were -28%/+14%, respectively, and online/offline KA sales for integrated stoves were +135%/+58%, respectively during the 9/30-10/20 period. The company, as a leader on the racetrack, is expected to usher in operational improvements along with the recovery of the industry.
Q3 Gross margin declined, and higher cost ratios dragged down performance. In 24Q3, the company's overall gross profit margin was 39.1%, -10.4pcts year-on-year. On the cost side, the company's 24Q3 sales/management/R&D/finance expense ratios were 30.8%/10.3%/8.6%/-0.2%, respectively, +8.3/+4.2/+2.7/+1.2pcts. The cost rate continued to rise year-on-year due to shrinking revenue scale. In the end, the 24Q3 company recorded a net profit margin of -8.2% to mother.
Investment advice: Against the backdrop of weak real estate data, the integrated stove circuit's performance has been lackluster since 23 years. As the industry moves from a high growth stage in the past to a new stage of high-quality development, leading brands are still expected to rely on long-term technology accumulation and channel layout, as well as good brand awareness and market influence to enhance their operating stability. As an industry leader, Martians has established a leading model of online and offline two-wheel drive, while continuing to expand emerging traffic entrances such as KA and home improvement. Coupled with favorable trade-in policies, it is expected to return to the growth channel in the future. The company's net profit for 24-26 is estimated to be 0.03/0.09/0.14 billion yuan, respectively (previous value 0.11/0.16/0.2 billion yuan, considering the third quarter revenue and profit decline widened and lowered overall expectations), corresponding to PE 225x/63x/41x, maintaining an “incremental” rating.
Risk warning: the risk of rising raw material prices; the risk of fluctuations in the real estate market; the risk of increased market competition; the risk that demand for categories such as integrated stoves, cabinets, and integrated sinks falls short of expectations.