every AI newsletter, on December 27, 2023, Haitong securities issued a research report to review fluorite network (688475).

Driven by technological innovation, continuous investment in research and development. As a technology innovation-driven company, the company continues to increase investment in research and development. As of 23H1, the company has 1244 R & D personnel, accounting for 29.32 of the company's total employees; as of 23H1, the company has accumulated 172 authorized invention patents, 81 software copyrights, and 673 invention patents under acceptance. 23Q1-Q3 company research and development cost rate of 15.55.

cleaning service robot new product expansion product matrix. On October 12, 2023, the company released two new cleaning service robots developed with the concept of body intelligence: the new home AI sweep treasure RS20 Pro and the first commercial cleaning robot BS1. We believe that the release of cleaning service robots reflects the company's active exploration and layout in the direction of intelligent robots. The C- end AI Sweep Drag Treasure RS20 Pro focuses on pet families, and the cloud vision commercial cleaning robot BS1 focuses on the enterprise building cleaning market. On the one hand, it continues to expand the smart home product line for the company, and on the other hand, it is the forward-looking practice of the company's visual navigation program in the field of intelligent service robots.

Cloud platform contribution continues to improve. As of 23H1, cloud platform service revenue of 0.38 billion yuan accounted for 16.7 percent of revenue, with a gross margin of 75 percent. The company's core technologies are based on the Internet of Things cloud platform as the core, with visual interaction as the characteristics of research and development, in the Internet of Things cloud platform formed on the basis of the strong middle-end capabilities, with smart home products hardware technology innovation. Based on the cloud platform, the company has developed a dual main business of "smart home and Internet of Things cloud platform. We expect that the continued increase in the contribution of the cloud platform in the future will help the company continue to improve its software capabilities and assist in the intelligent transformation of hardware products.

Solid revenue growth and substantial recovery in profitability. The company's 23Q1-Q3 cumulative revenue was 3.508 billion yuan, up 11.8 percent YoY, achieved gross margin of 43.4 percent, up 7.4pct YoY, and net profit attributable to the parent reached 0.401 billion yuan, up 83.3 percent YoY. The increase in the company's gross profit margin is mainly due to lean supply chain management, cost reduction, channel and product structure optimization and other comprehensive factors, resulting in a substantial rebound in final profitability.

Investment recommendations and earnings forecasts. The company is a seed player in the smart home track, through the focus on the advantages of visual Internet of Things, the whole product, the whole scene, the whole channel layout, and constantly accumulate brand potential energy. Lean supply chain management continues to reduce costs and increase efficiency. We expect the company to achieve a net profit of 0.752 billion yuan in 2024, with a compound EPS growth rate of 34% from 2023 to 2025. We give the company a PEG(2024E) forecast of 1-1.05, corresponding to a PE valuation of 34X-36X in 2024, corresponding to a reasonable value range of 45.56 yuan -48.24 yuan, giving the company a rating of "better than the big market.

Risk. Terminal demand fluctuations, upstream integrated circuit industry development constraints.

(Source: Huibo Investment Research)

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(edited by Zeng Jianhui)