The company released its 2024 three-quarter report: 24Q3 achieved revenue of 0.356 billion yuan (-10.3% YoY), net profit of 0.047 billion yuan (YoY -46.8%), and net profit of 0.047 billion yuan (YoY -41.5%). We judge that the price band of the main sales unit continues to decline and revenue pressure is increasing. At the same time, the early launch of Double Eleven and expected cost preemption led to high cost rates in Q3, putting pressure on profit performance.

Online Double Eleven performed well, and trade-in is expected to contribute to the increase. The company drives the market with explosives, and uses platforms such as Douyin and Xiaohongshu to promote online channel customer stickiness and market coverage. We judge that the online decline in 24Q3 was relatively small. As of October 28, the three Haotai electric clothes drying rack products ranked in the top 1, 2, and 3 of the Tmall drying rack hot sales list, leading online share; the extensive offline layout of specialty stores and outlets simultaneously promoted offline retail transformation, and established strategic relationships with many leading real estate companies and partners in various fields to explore and establish strategic relationships with many leading real estate companies and partners in various fields. Application scenarios, we judge 24Q3 offline The decline in channels was higher than the overall level. Currently, the company's online Tmall and JD platforms have participated in the renewal subsidy campaign, enjoying Guangzhou's 15% subsidy, and orders can be placed nationwide. We expect that online sales will benefit significantly; the offline qualification review threshold is high, and it is expected that a certain promotion process will still be needed.

Profitability declined year-on-year, and operating capacity was generally stable. The 24Q3 company's gross margin was 49.3% (YoY -3.4pct), net profit margin 13.2% (YoY -9.0pct), and 24Q3 sales/management/R&D expense ratios were 27.0%/6.0%/3.8% (+7.2pct/+1.4pct/+1.0pct), respectively. Along with the decline in ASP and the year-on-year decline in gross margin, increased investment in sales expenses, and the introduction of Double Eleven expenses, resulting in pressure on net interest rates, we expect the 24Q4 expense ratio to decline sequentially. The company generated a net operating cash flow of 0.032 billion yuan (-0.052 billion yuan year over year). As of the end of 24Q3, the company's accounts receivable turnover was 21 days (year-on-year -1 day), the number of accounts payable turnover days was 103 days (+40 days year over year), and 94 days of inventory turnover (+4 days year over year).

Profit forecast and investment rating: We expect the company's net profit to be 0.28 billion/ 0.32 billion/ 0.36 billion yuan for 2024-2026, and the corresponding PE will be 20.2X, 17.8X, and 15.7X respectively, maintaining a “buy” rating.

Risk warning: Channel development falls short of expectations, real estate recovery falls short of expectations, and industry competition intensifies.