The company released a three-quarter report: 24Q3 achieved revenue of 0.975 billion yuan (+26.7% YoY), net profit attributable to mother 0.096 billion yuan (-10.4% YoY), and net profit of 0.094 billion yuan (YoY) after deducting non-attributable net profit of 0.094 billion yuan (YoY). The overall performance is in line with expectations. The revenue side is expected to benefit from the release of new products from old customers, the expansion of new customers, and continued beautiful growth. The profit side is slightly pressured by exchange rate fluctuations compounded by the high base in the previous period.

The company also announced a stock value-added incentive plan: it plans to grant a total of 1.2 million share value-added rights to the director and a core manager (0.26% of the total share capital, exercise price is 4.07 yuan). The target value for performance assessment is:

Revenue reached 3.129/3.49 billion yuan in 2025/2026 (+11.5% year-on-year), stimulating the executive team's motivation and sharing the company's growth dividends.

New and old customers continue to grow, and our own brands continue to grow beautifully. The overseas thermos mug market is expanding at an accelerated pace, and the leading brand pattern continues to be concentrated. As a core supplier for leading brands such as Yeti and Stanley, the company conforms to industry trends and continues to iterate on new products. We expect that Yeti will benefit from centralized inventory replenishment and a high base over the same period last year, with Stanley's popular Quencher and iceflow accelerating volume and continuing high growth; the company is increasing efforts to cultivate second-tier/potential customers, and the number of large-scale customers continues to increase, and it is expected that some tier customers will continue to double. In addition, the company's overseas SIGG positions itself as high-end, and is expanding online/offline simultaneously; domestic brands have stepped up their marketing efforts, and “10 million” high-speed rail advertisements have entered major national core transportation hubs in August, and independent brands are expected to continue to grow steadily.

Profits were under pressure for a short time, and cost performance was stable. The 2024Q3 company's gross margin was 30.3% (4.9pct year on year, -1.1 pct month on month), and the net profit margin to mother was 9.9% (4.1pct year on year, -2.0pct month on month). The pressure was mainly due to the high base in the same period last year, and overseas bases are still in the climbing period & overseas costs are high. In terms of expenses, the cost rate for the Q3 period was 18.1% (+1.0pct year on year), with sales/R&D/management/ finance expenses ratios of 8.1%/4.0%/5.6%/0.4%, respectively (+0.1/+0.7/+0.4/-0.2pct), respectively.

Excellent cash flow performance and stable operating capacity. 2024Q3's net operating cash flow was $0.105 billion (+0.123 billion yuan year over year). In terms of operating capacity, the number of days receivable, payable, and inventory turnover as of 2024Q3 was 34.81/96.06/95.64 days (+3.01/+0.84/-3.73 days year-on-year), respectively.

Profit forecast: The company's net profit for 2024-2026 is expected to be 0.31, 0.37, and 0.45 billion yuan, respectively, and the corresponding PE valuations are 12.5X, 10.3X, and 8.6X, respectively, maintaining a “buy” rating.

Risk warning: Overseas demand recovery falls short of expectations, RMB exchange rate fluctuates beyond expectations, and competition intensifies.