The company released its 2024 annual report: revenue was 14.196 billion yuan, a year-on-year increase of +38.87%; The net profit attributable to the parent company was 1.084 billion yuan, a year-on-year increase of +81.29%. Among them, Q4 revenue was 3.290 billion yuan, +22.05%/-22.38% year-on-year/month-on-month; The net profit attributable to the parent company was 114 million yuan, a year-on-year/month-on-month increase of -47.77%/-69.40%. The performance of the company's annual report is basically in line with the performance express. It is optimistic that the company will continue to enhance its brand power through technological innovation and channel optimization, and the diversified development of two-wheeled vehicles, robots, all-terrain vehicles and other businesses will drive long-term growth. Maintain "Overweight" rating.

The 24-year profit level has steadily improved, and the high dividend shows the company's confidence, and the gross profit margin/net profit margin in 24 years was 28.24%/7.65%, respectively, +1.34/+1.81pct year-on-year. The gross profit margin of electric two-wheelers/electric self-balancing vehicles and electric scooters/all-terrain vehicles/robots was +2.06/+7.95/-0.65/+2.14pct year-on-year, respectively. Among them, after excluding store construction subsidies and quality premiums, the gross profit margin of two-wheelers reached 22.92%, a year-on-year increase of +3.65pct. 24Q4 revenue growth and profit decline were mainly due to a decrease in fair value change net income. In 24 years, the company's cash dividends (800 million yuan) and repurchase amounted to 1.1 billion yuan, accounting for 101.52% of the net profit attributable to the parent company, demonstrating the company's confidence in future development.

In terms of electric two-wheeled vehicles, the company continued to optimize the product matrix, launched new products such as the Orion EVA co-branded model and the MIX family oriented to the new national standard electric bicycle market, and optimized the channel and store layout (more than 7,600 exclusive stores in China on February 28, 25), consolidating its leading position in the field of smart electric vehicles. In '24, the company sold about 2.6 million electric two-wheelers (+77% year-on-year); On March 10, 25, the company's cumulative shipments of smart electric two-wheelers in the domestic market exceeded 6 million units. We are optimistic that the company will continue to innovate and iterate, strengthen brand building, and enhance its competitiveness in the global market. New

businesses such as lawn mowers and all-terrain vehicles have rapidly increased In

the past 24 years, the company's new businesses such as robots and all-terrain vehicles have grown rapidly, and the sales of robots/all-terrain vehicles have increased by +323%/34% year-on-year, respectively. In terms of robots, in 24, the company released the X3 series of intelligent lawn mower robots to broaden the lawn mowing scene and is expected to gradually increase market penetration. In terms of all-terrain vehicles, the company has accelerated the pace of globalization in recent years and entered the core all-terrain vehicle markets in North America, Europe, Asia-Pacific, and Latin America. In addition, the company actively expands E-bike and other categories. We are optimistic about the diversified layout and continue to empower the company's long-term growth.

Profit Forecast and Valuation

We raise the company's net profit attributable to the parent company in 25-26 years to 1.628 billion yuan and 2.174 billion yuan (up 0.95% and 1.15% respectively, mainly due to the assumption of raising product sales), and expect the net profit attributable to the parent company in 27 years to be 2.867 billion yuan (CAGR of 33% in the three-year forecast period), corresponding to EPS of 2.27, 3.03 and 4.00 yuan. Referring to the 25-year Wind consensus expectation of comparable companies with an average PE of 22.3 times, considering that the company's intelligent layout has a first-mover advantage and multi-category resonance, the company is given 27 times PE in 25 years, and the target price is raised to 61.27 yuan (the previous value is 51.74 yuan, corresponding to 23 times PE in 25 years).

Risk warning: deterioration of industry competition; The new product iteration is less than expected; Market development is less than expected.