Key points of investment:

The company released its 2024 three-quarter report on October 30. The third quarter of 2024 achieved operating income of 6.8 billion yuan, up 44.05% year on year, net profit of 0.6 billion yuan, up 52.44% year on year; after deducting non-net profit of 0.537 billion yuan, up 41.98% year on year; diluted EPS of 1.13 yuan, weighted average return on net assets of 7.26%.

Net operating cash flow for the first three quarters was 1.651 billion yuan, up 78.06% year over year.

Brief review and investment advice.

1. Revenue for the third quarter of 2024 was 6.8 billion yuan, up 44.05% year over year. 1-3Q24 revenue was 16.449 billion yuan, up 39.56% year on year; 3Q24 revenue was 6.8 billion yuan, up 44.05% year over year. 1-3Q24 gross profit margin was 44.28%, up 0.98 pct year on year; 3Q24 gross profit margin was 42.99%, down 0.47 pct year on year. ① By region, 1-3Q24's domestic revenue was 0.573 billion yuan, up 31.52% year on year; overseas revenue was 15.875 billion yuan, up 39.86% year on year. ② By channel, 1-3Q24's online revenue was 11.497 billion yuan, up 41.70% year on year; offline revenue was 4.952 billion yuan, up 34.82% year on year; independent sites contributed 1.646 billion yuan in revenue in the first three quarters, up 104.52% year on year, accounting for 10% of revenue.

The three main brands continue to promote new products: ① Charging: Anker Prime products released in August, new AnkerMagGo series released in September; in the consumer energy storage sector, Anker SOLIX C300 DC series launched in August.

② Intelligent innovation: In the field of smart security; eufy's first fingerprint handle lock Smart Lever LockC33 was launched in July, and eufyCam S3 Pro was launched in September; in the field of smart cleaning, the eufy X10 Pro Omni all-purpose base station sweeper was launched in February. This product performed well in the Amazon Prime Day promotion in July. ③ Smart video: In terms of wireless audio, a new generation of open headphone Soundcore AeroFit 2 was launched in China in September; in terms of smart projection, the NEBULA Capsule Air projector was launched in August.

2. The cost rate increased by 0.52 pct year-on-year during the third quarter of 2024, mainly due to an increase in R&D investment. The fee rate for the 1-3Q24 period was 34.13%, up 0.45pct year on year; of these, the cost rate for the 3Q24 period increased 0.52 pct year on year to 34.01% year on year. The 3Q24 sales expense ratio decreased by 0.81 pct to 22% year on year, the management expense ratio increased by 0.15 pct to 3.29% year on year, the financial cost ratio decreased by 0.67 pct to -0.14% year on year, and the R&D expense ratio increased by 1.85 pct to 8.86% year on year.

3. Net profit to mother for the third quarter of 2024 increased 52.44% year on year, and after deducting non-net profit, increased 41.98% year on year.

3Q24 fair value change profit and loss - -26.36 million yuan, investment income 0.105 billion yuan; total profit increased 63.19% to 0.702 billion yuan, and the effective tax rate increased 7.65 pct to 11.06% year on year. Net profit from 1-3Q24 was 1.472 billion yuan, up 21.29% year on year; net profit after deducting non-return to mother was 1.303 billion yuan, up 41.13% year on year; of these, net profit from 3Q24 was 0.6 billion yuan, up 52.44% year on year; after deducting non-net profit of 0.537 billion yuan, up 41.98% year on year.

Maintain judgment on the company. The company is the world's leading consumer electronics brand with strong core competitiveness: ① Continuous innovation product capabilities: The company continues to promote the three major product lines. Among them, energy storage products have been rapidly launched in recent years, which is expected to drive the upgrading of Anker's main brand strategy. ② Excellent supply chain management capabilities: Since 2023, the company's gross margin has increased significantly in every quarter. Our judgment is mainly due to the contribution of supply chain cost reduction and efficiency and exchange rate fluctuations. ③ Omni-channel operation capability: The company has formed a multi-channel layout such as Amazon, other third-party platforms, and independent websites online.

Updated profit forecast: 2024-2026 revenue is expected to be 24.2 billion yuan, 31.1 billion yuan, and 38.1 billion yuan respectively, up 38%, 29%, and 23% year-on-year, and net profit to mother of 2.024 billion yuan, 2.604 billion yuan, and 3.104 billion yuan, respectively, giving 18-22 times PE in 2025, corresponding to a reasonable market value range of 46.9-57.3 billion yuan, and a reasonable value range of 88.70- 108.41 yuan/share, maintaining the “superior to the market” rating.

Risk warning: changes in market demand, risk of inventory management, uncertainty in the global economic and political environment, etc.