Event: The company releases its 2024 financial results. In 2024, the company will achieve operating income of 11.94 billion yuan, a year-on-year increase of +38.0%; the net profit attributable to the parent company was 1.98 billion yuan, a year-on-year increase of -3.6%; net profit after deducting non-attributable to the parent company was 1.62 billion yuan, a year-on-year increase of -11.3%. 24Q4 operating income was 4.94 billion yuan, +66.5% year-on-year; net profit attributable to the parent company was 500 million yuan, a year-on-year increase of -27.0%; net profit after deducting non-attributable to the parent company was 430 million yuan, a year-on-year increase of -24.1%.

The national subsidy boosted consumption, and the company's revenue grew rapidly due to the superimposed overseas active market strategy.

24 years of sub-products: intelligent sweepers and accessories 10.85 billion yuan, a year-on-year increase of +34.2%, mainly due to the company's enrichment of the product matrix and price matrix, key breakthroughs in the mainstream price segment, while adopting an active market strategy to further optimize the sales structure; Gross profit margin was 52.1%, -2.9pct year-on-year.

other smart electrical products were 1.07 billion yuan, a year-on-year increase of +93.1%, mainly due to the launch of a variety of new products; Gross profit margin was 33.0%, -9.1pct year-on-year.

24 years by region: domestic revenue of 5.53 billion yuan, +25.4% year-on-year; The gross profit margin was 46.5%, a year-on-year increase of -1.6pct. overseas revenue was 6.39 billion yuan, +51.1% year-on-year; The gross profit margin was 53.7%, a year-on-year increase of -6.74 pct, mainly due to the increase in tariff costs.

The decline in gross profit margin was mainly due to market expansion, tariff impact, and the increase in the proportion of other smart electrical products with low gross profit margin; Under the strengthening of marketing efforts, the sales rate increased, and the profitability declined.

Gross profit margin: In 2024, the company's gross profit margin will be -5.0pct year-on-year to 50.1%, and the single Q4 will be -11.8pct year-on-year to 44.9%. In the second half of '24, we adopted an aggressive product strategy to further expand our product price segments, as well as intensified market competition. In addition, there is an increase in the cost of customs duties.

Rate side: In 2024, the sales/management/R&D/finance rate will be 24.8%/2.9%/8.1%/-1.4%, a year-on-year change of +3.8pct/+0.5pct/+1.0pct/+0.2pct; The year-on-year change in Q4 was +4.9pct/+0.9pct/+0.9pct/flat, and the increase in sales rate was mainly due to the increase in marketing fees, platform service fees and commission fees.

Net profit margin: net profit margin in 2024 will be -7.2pct year-on-year to 16.5%; Single Q4 -13.1pct year-on-year to 10.2%.

Profit forecasts and investment recommendations. We expect the company's net profit attributable to the parent company from 2025 to 2027 to be 22.8/27.0/3.16 billion yuan respectively, a year-on-year increase of +15.1%/+18.5%/+17.1%, maintaining an "overweight" rating.

Risk warning: consumption recovery is less than expected, industry competition is intensifying, and new product development is less than expected.