Time is the best friend?

China's sweeping robot leader has chilled investors.

Recently, a topic of "the chairman of Roborock Technology cashed out 900 million yuan but advised investors to be patient" has aroused widespread attention from people inside and outside the industry.

As a leader in sweeping robots, the share price of Rock Technology (688169) has soared, and once stood at a high of 469 yuan in May this year, but has since gone downhill, as of the article, it fell to about 218 yuan, and half of the high point has evaporated.

▲Source: Baidu Stock Market

Coincidentally, in the year before the stock price plummeted, Chang Jing, chairman of Roborock, cashed out nearly 900 million. It has aroused investors' doubts that it is suspected of cashing out at a high level.

According to the Red Star Capital Bureau, in response to investors' concerns about Roborock's chairman Chang Jing's "high-level reduction" and "persuading investors to be patient", on the morning of December 4, the relevant person in charge of the Roborock Board Secretary Office responded to the Red Star Capital Bureau that there was no high-level reduction of holdings, and there was also a misunderstanding of the statement of "persuading investors to be patient".

Who knew that this move did not let investors go, and the incident became darker and darker.

01 The chairman reduced his holdings and caused public anger

Youshan checked the relevant data and learned that from March 2023 to June 2024, Changjing reduced its holdings of Roborock shares through centralized bidding and inquiry transfer, and its shareholding in Roborock decreased from 23.15% to 21.09%, with a cumulative cash of about 888 million yuan.

After the reduction, the stock price fell all the way, and investor dissatisfaction is certain.

So in November this year, under the video of Chang Jing participating in the "desert off-road" car event on the Douyin platform, some netizens left a message saying: "Boss Chang can't just play with cars, take care of Rock Technology, investors have been crying for a month."

Another comment said, "The recent decline in the share price of Roborock hopes that Mr. Chang can pay attention to strengthen the company's market value management expectations and enhance investor confidence." ”

Investors complained that Changjing was a little "not doing business". Chang Jing did not sit idly by, and personally posted a video at the end of November, meaning that the overwhelming comments have caused a lot of trouble, and advised investors to be patient. "This is a period of strategic transition, so there will be some changes in the company, and these changes are for the long-term development in the future," Chang said. ”

▲ Source: Screenshot of Changjing video

Roborock also said that some investors may be affected by the recent fluctuations in the company's stock price, and there is also a misunderstanding of the interpretation of this sentence due to different personal investment styles.

The

"patience talk" of the "double standard" for themselves and public investors not only did not play a positive role, but turned the mood of investors from displeasure to anger.

Some netizens joked: "900 million is in hand, I am indeed patient." ”

Some netizens countered: "In difficult times, if the chairman chooses to reduce his shareholdings, then investors may also withdraw temporarily, and wait for the chairman to repurchase before considering entering the market." ”

There are also netizens who are yin and yang: "No wonder everyone should be patient, the shareholding ratio has dropped from 23.15% to 21.09%, the big one is still to come, all small shareholders must be stabilized, how can Chang Dong continue to reduce his holdings if he is not stable?" How do you catch the last baton? ”

As the first 1,000-yuan stock on the Science and Technology Innovation Board, Roborock hit a record high of 1,494.99 yuan per share in June 2021.

At this juncture, Chang Jing advised investors to be patient, and no one could accept it.

Some investors asked: Where was the 888 million yuan spent in cash? Is there any feedback to the listed company? Or what about technological innovation?

The hammer of public opinion has made the already not optimistic Rock Technology even worse.

On the one hand, Chang Jing himself was immersed as an "Internet celebrity" and reduced his holdings heavily; On the other hand, the main sweeping robot industry is in a bottleneck, how can investors believe that the company's strategic transformation can be successful?

02The growth of the main business was hindered

According to the report released by IDC, Roborock's smart sweeping robots sold in the second quarter of 2024 increased by 8% year-on-year, ranking first in the world in terms of shipments and value, becoming the first Chinese smart sweeping robot manufacturer to top the global smart home device list.

Why is it difficult to contain the anger of shareholders, this has to start from the fuse - the third quarterly report of Roborock.

According to public information, Roborock reported that in the first three quarters of 2024, Roborock achieved revenue of 7.007 billion yuan, a year-on-year increase of 23.17%; The net profit attributable to the parent company was 1.472 billion yuan, a year-on-year increase of 8.22%.

The single-quarter revenue in the third quarter was 2.590 billion yuan, a year-on-year increase of 11.91%, which was significantly slower than the previous growth rate; The net profit attributable to the parent company in a single quarter was 351 million yuan, a year-on-year cliff-like drop of 43.40% and a month-on-month decrease of 51.32%.

Why did the net profit decline sharply despite the growth of revenue in a single quarter?

In the first three quarters of this year, the growth rate of its net profit was 95.23%, 34.91%, and -43.40%, respectively. Could it be that there is a mystery hidden in the financial report of Roborock?

At the performance exchange meeting after the third quarterly report, Roborock said that on the one hand, the decline in net profit was due to the company's more active product strategy and marketing strategy, the company increased investment in brand promotion, increased brand exposure, improved brand voice, and built stronger brand power; On the other hand, the adjustment of overseas sales structure (agent to direct sales) has brought about the adjustment of revenue recognition, and the income of the European region with a higher net profit margin has a certain impact on the overall revenue and profit.

To support this statement, Roborock's R&D expenses increased to 640 million yuan in the third quarter. Among them, the company's R&D expenditure increased by 231 million yuan in a single quarter, but the proportion of revenue was less than 9%, and the impact of R&D investment on performance was limited.

In the third quarter, the sales expenses increased to 1.563 billion yuan, and the sales expense ratio rose to 22.31%, a record high, of which the sales expenses increased by 678 million yuan in a single quarter.

From the perspective of total expenditure, the increase in operating costs and sales input is the fundamental reason for the dilution of profit margins and the sharp decline in net profit growth.

Of course, the slowdown in performance growth and the concentrated expansion of R&D and sales expenses are not unique to the industry.

Ecovac 603486 s, the former industry leader, experienced a sharp decline in performance in the second and third quarters of 2023, thus ceding the top spot in the industry to Roborock.

According to data from Guosen Securities (002736), since the end of 2022, the sales growth rate of the sweeper industry has begun to exceed the sales growth rate, and the sweeper industry has begun to enter the period of "exchanging price for volume".

In addition, the gross profit margin of sweeping robot-related companies is generally as high as 50%, which gives all companies enough profit margins to roll low prices, roll up research and development, and roll advertising costs.

However, this kind of "price for volume" often makes it difficult for manufacturers to form differentiated technical advantages, unable to open a gap with competitors, and then falls into a vicious circle.

In June this year, due to patent disputes, Roborock was restricted from manufacturing and selling P10S Pro sweeping robot products, although the subsequent restrictions were lifted, but it did have an impact on Roborock's sales.

In foreign countries, Roborock is also struggling with patent lawsuits. In August this year, a German company successfully won a lawsuit with Roborock, and Roborock has stopped selling related products in Germany.

In addition, on the black cat complaint platform, there are thousands of complaints about Roborock sweeping robots, and there are still nearly 300 complaints that have not been handled.

▲ Source: Black Cat complaint

03New growth drivers

The industry has entered the darkest moment of "involution", and in order to expand the growth curve, it seems inevitable to go overseas to pan for gold.

While making efforts in domestic sales, Ecovacs and Roborock, two major sweeper giants, went overseas in 2012 and 2017 respectively.

Among them, Roborock's overseas business map has caught up, and it has built a global distribution network in more than 170 countries and regions around the world, and its overseas business dependence is higher.

In Roborock's third quarterly report, it did not provide sub-regional data on domestic and export sales, but it was mentioned in its semi-annual report that from January to June 2024, Roborock's domestic sales were 2.122 billion yuan and overseas sales were 2.294 billion yuan, and the domestic and foreign sales business were basically "evenly divided".

▲ Source: Roborock's official blog

In addition to floor cleaning, Roborock has also set its sights on other categories, such as the development of washing machines.

However, the current ownership rate of washing machines in 100 Chinese households has reached almost 100%, and it is not easy for Roborock to get a piece of the pie because of the washing machine brand giants such as Siemens, Panasonic, Haier, and Midea.

In addition, Chang Jing, the founder of Roborock, also incubated the car-making business outside the listed company and launched Polar Stone Automobile.

The

main company of Polar Stone Automobile is Shanghai Luoke Intelligent Technology Co., Ltd., which was jointly established by Chang Jing and Yan Feng, who has more than 20 years of automotive experience in Shanghai General Motors, SAIC Passenger Vehicle, SAIC Group and Banma.ai. In 2023, Weiqiao Venture Group, one of the largest private enterprises in Shandong, will strategically invest US$1 billion in Shanghai Luoke Intelligence.

As a new force in car manufacturing, Polar Stone Automobile was established in 2021 and will only begin to deliver its first car, Polar Stone 01, at the end of 2023. Although it has a history of more than three years, it seems to be a little "deep" in the Chinese market, with a total of 4,000 units sold, of which nearly one-third of the customers are from overseas markets.

According to Polar Stone data, in the important automobile market of the United Arab Emirates, the sales volume of Polar Stone 01 ranked third in all-terrain luxury SUVs in January ~ October this year, with a market share of more than 15%. Polar Stone plans to launch a facelifted version of the Polar Stone 01 in 2025, with a short-term sales target of 30,000-50,000 units per year.

The head effect of car companies is becoming more and more obvious, and with more and more new forces, they have begun to enter the sequence of elimination and elimination. For the new power brand Polar Stone, which does not have a certain sales volume, it may be more difficult to walk than the road of sweeping robots, and it is difficult to guarantee that it is not the next Byton, Gaohe.

Being patient is good, but it doesn't necessarily lead to good results.

References:

[1] "The chairman cashed out 900 million yuan but advised investors to be patient, Roborock responded" Red Star News

[2] "Cash out 880 million! Something happened to China's sweeping robot faucet! 》Finance for three minutes