The company announced 202 4Q3 results:

24Q3: Revenue of 1 billion yuan (-24.1% YoY), net profit of 0.15 billion yuan (YoY -31.8%); net profit of 1.0 yuan (YoY -51.0%); 24Q1-3: Revenue 3.32 billion (-16.9% YoY), net profit to mother 0.46 billion (-43.8% YoY); net profit of 0.38 billion yuan (YoY -47.2%).

Revenue analysis

Shaver: The year-on-year decline is expected in Q3, and it is still in a period of strategic adjustment and transformation. The company adopts a dual brand strategy and actively adjusts the product structure. The performance of the brand vPro in terms of cost performance is expected to be higher than that of Feike. In October, the company solemnly launched the first dual-electric direct-drive portable shaver U1, leading the development of the industry and is expected to become a hot product.

Hair dryers: Expected to maintain rapid growth in Q3. Referring to Juyuan data, Feike's 24Q3 sales are +25% year-on-year. As industry competition intensifies, the average price is expected to drop, continuing the H1 trend.

Profit analysis

Gross profit margin: 24Q3 gross margin -0.4/+2.8pct month-on-month. It is expected that due to increased market competition and product restructuring, gross margin will decline to a certain extent, but there has been a significant recovery from month to month.

Net interest rate: Net profit margin for 24Q3 is the same as 1.7/+3.0 pct, and sales, management, R&D, and finance are the same as +5.4/+1.6/+0.1/+0.1 pct, respectively. It is expected that sales expenses will increase a lot due to new product launches and online promotion.

Investment advice:

Our point of view:

The company's share is expected to remain leading under the dual brand strategy of shavers. The second curve of high-speed hair dryers contributes to growth. In the medium to long term, it is expected that the sea will further open up room for growth.

Profit forecast: We expect the company's revenue for 2024-2026 to be 4.5/4.9/5.4 billion yuan, -11%/+8%/+10%; the mother is 0.6/0.7/0.8 billion yuan, -39%/+13%/+16%; the corresponding PE is 26/23/20x, maintaining a “buy” rating.

Risk warning:

Market competition intensified, online expansion fell short of expectations, and new products fell short of expectations.