The rapid increase in the share of stone floor scrubbers is expected to become the second growth curve, maintaining the "buy" rating In February 2025, the share of stone brand floor scrubbers will rapidly increase to the third in the industry, becoming another important pillar of domestic sales revenue. We believe that the company's more aggressive product and sales strategies are gradually working in the floor scrubber category, and the brand effect of the sweeper category is expanding to other new categories, helping the company's revenue to grow steadily. As a benchmark enterprise for the application of AI + robot technology to the C-end, the company is expected to obtain a valuation increase, and we maintain the profit forecast, and it is expected that the net profit attributable to the parent company in 2024-2026 will be 19.81/23.00/2.900 billion yuan, and the corresponding EPS will be 10.72/12.45/15.70 yuan respectively, and the current stock price will correspond to PE 23.0/19.8/15.7 times, maintaining a "buy" rating.

The share of stone floor scrubbers continues to increase and has become the company's second growth curve, and the new products continue to expand the price of floor scrubbers to fit the hard ground of Chinese families, which better solves the needs of "sweeping + mopping", and is expected to complement the cleaning function of differentiated groups and cleaning areas together with sweepers. According to the data of Aowei cloud network, in February 2025, the market share of online channel sales of stone brand floor scrubbers will reach 13.1%, which is further narrowed compared with the duopoly gap of Timke/Dreame (37.1%/22.2% respectively), and the domestic sales revenue of floor scrubber products in 2024 is expected to account for about 10%, gradually becoming another important business pillar of domestic sales. From the perspective of product strength, the company's product highlights are built for hot water scrubbing, steam scrubbing, ultra-thin flat lying, super suction and sewage tank deodorization, etc., which have differentiated competitive advantages compared with competing products; In terms of price bands, after the release of the A30 series, the stone has achieved a good breakthrough in the three mainstream price segments of 1500-2000, 2000-2500 and 2500-3000 yuan, and the market share of 2025M2 sales volume reached 13.9%/19.4%/18.9% respectively, a year-on-year increase of +11.4/+7.8/+12.9pcts, ranking third/third/second in the industry. In March 2025, the company will continue to release new products A30 Pro Steam/A30 Pure, priced at 3299/1699 yuan respectively, and will continue to anchor 2500-3000/1000-1500 yuan respectively after the national subsidy, and the price band will continue to expand.

We are optimistic that the company will expand to a wider range of consumers after gaining a firm foothold in the original price segment and continuously increase its brand share.

Behind the success of the floor scrubber is the brand power reuse + more active strategy, optimistic about the reproduction to other categories, we believe that the reason for the company's good results in the floor scrubber business may be due to the company's organizational structure adjustment, the adoption of more active product and marketing strategies, including improving the product price band, differentiation to build product strength, enriching sales channels, increasing brand and traffic investment, etc. At a time when Stone ranks first in the world in sales by virtue of the sweeper category, the company fully reuses brand potential energy, sales channels and intelligent cleaning technology to achieve the creation and hot sale of high-quality floor scrubber products. In terms of profitability, after the scale of the new category gradually increases, it is expected to continuously reduce costs through scale effect and technology cost reduction, so as to achieve continuous improvement in gross / net profit margin. We believe that the continuous increase in the share of the floor scrubber category may reflect the company's long-term cultivation and building of sweeper product power and brand power, and gradually have the ability to replicate new categories, and we are optimistic that the company will continue to successfully replicate the success of washing machines and more new categories, and gradually grow into a multi-category home appliance giant with underlying technology and brand power support.

Risk warning: channel expansion is less than expected, overseas demand is sluggish, and new product sales are less than expected.