In 2024Q4, revenue growth exceeded expectations, the impact of North American tariffs is expected to be limited, and the "buy" rating is maintained, and the company will achieve revenue of 11.94 billion yuan in 2024 (+38.0% year-on-year, the same below), net profit attributable to the parent company of 1.98 billion yuan (-3.6%), and net profit attributable to the parent company of 1.62 billion yuan (-11.3%). In 2024Q4, the company achieved revenue of 4.94 billion (+66.5%), net profit attributable to the parent company of 500 million (-27.0%), and net profit attributable to the parent company of 430 million (-24.1%). In 2024, the company will pay dividends and repurchase a total of 225 million yuan, accounting for 11.39% of the net profit attributable to the parent company, and plans to repurchase 0.5-100 million yuan of shares in 2025, demonstrating confidence in development. We maintain the profit forecast for 2025, raise the profit forecast for 2026 and add 2027, and expect the net profit attributable to the parent company in 2025-2027 to be 23.0/29.7/3.78 billion yuan (the original value in 2026 is 2.90 billion yuan), the corresponding EPS is 12.45/16.06/20.45 yuan, and the corresponding PE of the current stock price is 18.2/14.1/11.1 times. The company's revenue increased as expected after more active products and sales strategies, and the impact of tariffs is expected to be limited, so it is optimistic about raising its valuation as a benchmark enterprise for the application of AI robotics technology, and maintains a "buy" rating.

In 2024Q4, the company's domestic sales are expected to increase by more than 40% year-on-year, and export sales will increase by about 35% year-on-year in 2024, of which Europe/North America/Asia-Pacific will increase by about 25%/60%/30% year-on-year respectively. In 2024Q4 alone, domestic sales growth is expected to reach double digits, and the growth rate of Europe/North America/Asia-Pacific in overseas markets is expected to exceed +50%/+50%/+30% year-on-year respectively, of which the online/offline growth rate in Europe will reach about +100%/+20% respectively. In terms of categories, in 2024, the revenue of smart sweepers and accessories will be 10.85 billion yuan (+34.2%), and the revenue of other smart electrical products will be 1.07 billion yuan (+93.1%), accounting for 9.0%, and floor scrubbers and washing machines will gradually build a second growth curve. In 2024, the company will open nearly 200 offline experience stores in the business districts of core cities in China through distribution; As of December 2024, the company covers 1,398 Target stores and 900 Bestbuy stores in North America.

Looking forward to 2025, the domestic sales and domestic subsidies will continue, and the export consumption boom is expected to rebound, and the company is optimistic that the company will continue to maintain high revenue growth under a more active product/sales strategy. In terms of domestic sales, in 2025, the cumulative volume/price of online channels of stone sweepers (as of March 30) will be +55%/+6% year-on-year, of which +82%/+5% year-on-year respectively; In terms of export sales, the sales volume of Stone 2025M1-2 Meiya and Deya were +80%/+75% year-on-year respectively, and the active strategy continued to show results.

Profitability is under pressure under multiple factors such as tariffs and saturated marketing, and it is expected to bottom out and stabilize in 2024Q4 gross profit margin of 48.4% (after reduction, -8.3pct year-on-year), mainly due to (1) Europe to quickly cover the low- and medium-priced segments to take discount measures for old products, (2) the cost of US tariffs increased by about 100 million yuan; (3) the structural impact of the rapid growth rate of floor scrubbers and washing machines with low gross profit margins; During the 2024Q4 period, the expense ratio was 36.5% (+6.8pct), of which the sales/management/R&D/financial expense ratio was +8.4pct (after reduction)/+0.9pct/+0.9pct/flat year-on-year, respectively, and the increase in other income/decrease in asset impairment loss had a positive impact on the net profit margin of +1.1/+1.5pct year-on-year, the net profit margin was 10.2% (-13.1pct), and the net profit margin attributable to the parent was 10.2% (-13.1 pct), deducting non-net profit margin of 8.8% (-10.5 pct). In the non-economic period, the three factors dragged down the net profit margin by 1.9/0.4/0.4pct year-on-year, respectively, due to the decrease in fair value change income and the decrease in government subsidies due to the staggered recognition of software tax refunds. We believe that the company's voluntary abandonment of high net profit margin is for better revenue growth and share increase, and at the same time, it can fully compress the competition space, and the current strategy has gradually reaped the results, and the net profit margin is expected to bottom out and stabilize in 2025.

Risk warning: new product sales are less than expected; the risk of increased competition; Demand is lower than expected amid high inflation overseas.