Event: The company publishes its 2024 Annual Report and 2025 First Quarter Report. In 2024, the annual revenue will be 5.441 billion yuan (YoY+12.44%); net profit attributable to the parent company was 504 million yuan (YoY-10.5: 2%); The net profit deducted from non-attributable to the parent company was 483 million yuan (YoY-12.63%), and the proposed dividend was 3.5 yuan (tax included) for every 10 shares. In the first quarter of 2025, the revenue will be 1.380 billion yuan (YoY+11.59%); the net profit attributable to the parent company was 138 million yuan (YoY+10.42%); The net profit deducted from non-attributable to the parent company was 138 million yuan (YoY+13.24%).

The net profit elasticity is expected to be realized in the long run: during the reporting period, the company's revenue increased by 12.4% year-on-year, and net profit decreased by 10.5% year-on-year. The main reasons are: 1) the company actively expanded and optimized its domestic and overseas business layout, promoted diversified channel coverage, continuously enriched its product matrix, and steadily increased its overall revenue; 2) The company actively explores the new product market, and during the reporting period, the company's new intelligent products are still in the early stage of market cultivation, and the related marketing investment has increased, resulting in a decline in net profit. In terms of segments, the company's main business smart home products/Internet of Things cloud platform achieved revenue of 4.347/1.052 billion yuan respectively, a year-on-year increase of 9.76%/22.87%; In terms of products, smart home and intelligent service robots grew significantly, achieving revenue of 7.48/166 million yuan respectively, a year-on-year increase of 47.87%/265.12%. In 2024, the company's gross profit margin will be 42.08% (YoY-0.39pct) and net profit margin will be 9.26% (YoY-2.37pct). The gross profit margin of smart home products was 34.02% (YoY+1.36pct), due to the increase in the number of users, the abundance of cloud value-added service products, and the increase in the proportion of overseas business. The gross profit margin of the IoT cloud platform was 76.19% (YoY-0.10pct). The company focuses on its core advantages, consolidates technology research and development, and grows steadily at the level of three fees. In 2024, the company's sales/management/R&D expenses will be 8.58/1.77/814 million yuan, an increase of 26.66%/9.35%/11.35% respectively, and the expense ratio will be 15.77%/3.26%/14.95% respectively, and the company's total assets will be 8.354 billion yuan in 2024, and the asset-liability ratio will be 34.24% (YoY-1.57pct).

Strategic upgrade of product matrix with the adoption of a new "2+5+N" architecture: In 2024, the company will fully upgrade its business structure to "2+5+N". From the single-core of the Internet of Things cloud platform to the dual-core drive of "AI + Huangshi IoT Cloud", the dual main business pattern of "smart home + Internet of Things cloud platform services" has been developed; On the basis of the four core self-developed products of smart home cameras, smart home devices, intelligent service robots and intelligent control terminals, new smart wearable products are added to build five core self-developed product lines of AI interaction; Through the ecological controller, the N-class ecological product line under the subsystem ecology of environmental control and intelligent audio and video is opened to promote the evolution of the product system to a richer and more intelligent scene ecology.

Released a self-developed large model to create AI converged intelligent services: The company has taken a key step in its intelligent strategy by launching a self-developed "blue ocean model", which adopts the MoE architecture and can be connected to external models such as DeepSeek to build a EZVIZ AI middle platform system, supporting full-stack capabilities from algorithms, computing power to tool chains. Based on the improvement of large model capabilities, the main business has been comprehensively and intelligently upgraded. The company has launched a variety of new AI-integrated smart home products, including the S10 video call camera with intelligent interaction function, the TAMO pet robot that combines AI pet recognition and remote interaction capabilities, the DL6OFVX Pro video lock that integrates the AI recognition capability of three reports, and the intelligent escort robot RK3 specially designed for the elderly, realizing the terminal and scenario-based landing of AI capabilities, marking the gradual transformation of EZVIZ product types from single hardware to intelligent services; The IoT cloud platform is further intelligent, with the C-side integrating AI algorithms and terminal perception through "EZVIZ Cloud Video" to provide personalized intelligent life services, and the B-side providing full-stack open PaaS platform services, supporting multiple deployment modes, providing customers with highly secure and scalable IoT infrastructure, and continuously consolidating its leading position in the global AIoT platform field.

Adhere to the construction of global retail channels and drive growth through brand marketing: The company continued to improve its terminal reach capabilities and promote channel 020 integration. In terms of online, we will further strengthen online content planting and live broadcast sales, and expand from shelf e-commerce to "shelf e-commerce + content e-commerce" two-wheel drive; In terms of offline, we have built a diversified channel structure that focuses on retail terminals, distribution, and industry customer channels, and continuously optimized store operation and management. In terms of overseas, overseas business has expanded from single product categories to multiple categories, and smart home products have opened the second growth curve.

At the same time, the company focuses on the brand concept of "AI and temperature", builds a content marketing matrix of BGC, PGC and UGC, focuses on the three keywords of "warm technology", "youth" and "her power", and cooperates with the closed-loop strategy of "new media grass planting + live broadcast promotion + omni-channel conversion" to effectively promote the improvement of brand voice and user stickiness. It has won 51 brand awards throughout the year, and many products have won international awards such as the Red Dot Award, and have appeared in top exhibitions such as IFA and GTEX, and the brand influence has steadily expanded to the global market.

Investment suggestion: We expect the company's revenue from 2025 to 2027 to be 62.73/73.47/8.665 billion yuan respectively, a year-on-year increase of 15.27%/17.11%/17.95%; the net profit attributable to the parent company was 6.59/8.04/991 million yuan, a year-on-year increase of 30.82%/21.89%/23.34%; EPS is 0.84/1.02/1.26 yuan, and the current stock price corresponds to 43.48/35.67/28.92 times PE in 2025-2027, maintaining the "recommended" rating.

Risk warning: technology iteration is less than expected; New product development is less than expected; intensified competition in the industry; Risks to data security and privacy protection.