event: the company released 23 years of semi-annual report: 2023H1 the company achieved revenue of 3.4 billion yuan, YoY plus 15%. Among them, 23Q2 realized revenue of 2.2 billion yuan, YoY plus 42%, the net profit of the parent/deduction of non-return net profit was 5.4/0.5 billion yuan, YoY plus 96%/74%.

comments:

domestic volume double increase, business trends continue to improve. 23H1 Company's domestic/export revenue was RMB13/2 billion (40%/60% of total revenue, respectively). On the domestic front, according to Oviyun Network, the average online retail price of stone sweepers in 23H1 was 3719 yuan (YoY-6), online retail sales/volume + 14%/20% year-on-year, sales/volume market share +2.0/1.2pct year-on-year, and G10S/P10/G20 series sweepers and A10 series vacuum cleaners were introduced in China. Abroad, according to 23H1 performance, the company's high-price segment product strategy drove Q2 growth, with Europe/Asia Pacific/North America accounting for 50%/30%/20% of overseas revenue, respectively.

23H1 gross margin increased year-on-year, while the expense side declined year-on-year. 23H1 company gross margin of 51.1 percent, year-on-year plus 2.9pcts, of which 23Q2 gross margin of 51.7 percent, year-on-year plus 2.9pct, gross margin improvement is mainly product structure improvement, RMB depreciation, design reduction and supply chain business reduction. 23H1/23Q2 home-to-home net interest rate of 21.9/24.2%, YoY plus 0.8/plus 6.7pct,23Q2 net interest rate increased significantly benefited from gross margin increase and expense rate decline. 23Q2 Sales/Management/Research and Development/Financial Expense Rate was 19.4/2.7/7.0/-2.9 (YoY -1.0/-0.6/-0.0/-0.4pct). The decrease in sales expense rate was mainly due to: 1) changes in revenue structure, better recovery in sales in Europe and Asia Pacific, high revenue growth in low expense rate channels, and 2) improved efficiency in sales promotion and delivery. On the balance sheet, 23H1 Company's monetary funds + trading financial assets amounted to $5.6 billion, accounting for 46% of total assets, with sufficient operational safety cushion; 23H1 receivables decreased by 46% YoY and payables increased by 64% YoY. In terms of cash flow, 23H1 Company's net cash flow from operating activities was 1.02 billion billion yuan, up 529 percent year-on-year.

profit forecast, valuation and rating: the company is the head enterprise in the field of intelligent sweeping robots. considering the marginal demand at home and abroad and the continuous improvement of the company's advantages in the industry competition, the company has raised its net profit forecast for 2023-25 to 16/18/2.1 billion yuan respectively (66%/68%/69% higher than the previous profit forecast respectively), the current price corresponds to a PE of 25/22/19 times. The company's strong research and development strength and profitability long-term upward, along with the recovery of consumer demand recovery, performance is expected to achieve growth, maintain the "overweight" rating.

risk tips: raw materials prices significantly, market competition intensified, poor shipping routes.