Written by Kaede

　　-8.64%、-16.79%....

After disclosing a financial report that fell short of market expectations, Roborock (688169.SH) was killed by the market. In just two trading days, the market value has evaporated by 11 billion, and then it has continued to fall.

For now, the moving averages have shown a clear bearish alignment, which is simply not too ugly.

What happened to Roborock, which is known as "sweeping grass" by the market?

Price for volume

In 2024, Roborock will increase revenue but not profits.

revenue was 11.945 billion yuan, a year-on-year increase of 38.03%; the net profit attributable to the parent company was 1.977 billion yuan, a year-on-year decrease of 3.64%; deducted non-net profit of 1.62 billion yuan, a year-on-year decrease of 11.26%.

In fact, this report card is lower than expected. According to the previous performance report, the net profit attributable to the parent decreased by 3.42%, and the non-net profit decreased by 11%.

If we look at it in a single quarter, Roborock's net profit has fallen "twice" year-on-year.

The "stone" is no longer crazy, and the capital market naturally does not buy it.

Roborock is mainly engaged in the design, R&D, production and sales of intelligent hardware such as intelligent sweeping robots, and its main products include intelligent sweeping robots, floor scrubbers, washer-dryers and other intelligent electrical appliances.

Smart sweepers and accessories are the main source of the company's revenue, and have contributed more than ninety percent of the company's revenue since its financial records. In 2024, the revenue will be 10.848 billion yuan, an increase of 34.17%, and the revenue contribution rate will be 90.82%.

However, this growth rate has been achieved through an aggressive "price for volume" strategy.

In the second half of 2024, Roborock will seize market share through "price reduction + allocation reduction promotion" and other methods, and the actual price of its main model Q7 Max series will drop from the list price of 569 euros to 419 euros, a decrease of 26.36%.

Roborock is not shy about saying that due to the intensification of market competition, the company has further expanded its product price segment to respond to the differentiated needs of consumers.

The problem is that although the revenue has maintained a rapid growth, the gross profit margin of the business is declining, falling to 52.07% in 2024, a decrease of 4.08 percentage points compared with the same period last year.

Further downward transmission, in 2024, Roborock's gross profit margin decreased by 3.79 percentage points year-on-year to 50.14%.

Heavy marketing

At the same time of price reduction, Roborock also invested heavily in marketing.

In 2024, the company's advertising and marketing expenses surged by 77.5% year-on-year to RMB1.924 billion. As a result, Roborock's sales expenses also surged, with a year-on-year increase of 73.23% to 2.967 billion yuan.

This growth rate is much faster than the revenue of the same period.

In contrast, its R&D investment is slightly less impressive, with R&D expenses of 971 million yuan in 2024, an increase of 56.93%.

According to calculations, Roborock's R&D investment is less than 1/3 of the sales expenses (32.74% of the latter).

Looking at it this way, Roborock is inevitably a bit heavy on marketing and light on research and development.

For the technology-intensive smart cleaning appliance industry, this is bound to affect the long-term competitiveness of the company's products.

The significant increase in selling expenses also made Roborock's expense ratio further climb to 34.51% during the period, a new high since 2016.

With such a large-scale increase in expenses, Roborock's net profit has been significantly squeezed, and it is difficult to maintain the previous growth trend.

The actual controller cashed out 888 million

It is worth noting that in 2024, 4 of the top 10 shareholders of Roborock will reduce their positions.

Among them, northbound funds reduced their holdings by 1,481,300 shares, Tianjin Jinmi Investment and Tianjin Stone Age reduced their holdings by 481,200 shares and 200,400 shares respectively, and Mao Guohua, one of the co-founders of Roborock, reduced their holdings by 474,000 shares.

The actual controller, Chang Jing, also reduced his holdings of 1,315,800 shares through inquiry and transfer during the year (June 2024), with a total amount of 496 million yuan.

Previously, from March to September 2023, Changjing had reduced its holdings of 1.3124 million shares through centralized bidding, with a total amount of 392 million yuan.

That is, Changjing has cashed out a total of 888 million yuan twice before and after the high position.

On the other hand, the company's share price has fallen from a high of 529.36 yuan on June 21, 2021 to 183.6 yuan, a cumulative decline of 65.32%.

Up to now, the company's market value is 33.9 billion yuan, which has shrunk by 65.4 billion yuan compared with its peak.

In November last year, in the face of netizens' doubts, Chang Jing released a video to persuade investors to "wait patiently".

Ironically, as a long-term strategic investor in Roborock, Xiaomi's "Shunwei Capital withdrew from the top ten holdings in 24Q4.

This is enough to show that it is not that investors are impatient....

(Redirected from: Bubble Finance).