Event: The company's operating income in 2024 will be 5.442 billion yuan, a year-on-year increase of +12.41%, and the net profit attributable to the parent company will be 504 million yuan, a year-on-year increase of -10.52%; Among them, in 2024Q4, the operating income was 1.479 billion yuan, a year-on-year increase of +11.05%, and the net profit attributable to the parent company was 129 million yuan, a year-on-year increase of -20.03%. (After adjustment), it is proposed to distribute a cash dividend of 3.5 yuan (tax included) to all shareholders for every 10 shares, with a dividend ratio of 55%. In Q1 2025, the company achieved operating income of 1.38 billion yuan, a year-on-year increase of +11.59%, and net profit attributable to the parent company of 138 million yuan, a year-on-year increase of +10.42%. (After adjustment)

The growth rate of smart home and service robot business is bright, and the smart home camera business is slightly under pressure. The growth of intelligent home and intelligent service robots is eye-catching, with a year-on-year increase of +47.87%/+265.12%. Cloud platform business revenue was +22.87% year-on-year, showing rapid growth. Among them, the revenue growth rate of 24H2 smart home cameras improved month-on-month compared with 24H1, +1.7% year-on-year; The growth rate of smart home and cloud platform business slowed slightly from 24H1, +34.7%/+17.2% year-on-year. In terms of regions, 24A's domestic and foreign sales revenue was +5.54%/+26.42% year-on-year, and the export sales growth was good. In 2024, the company will continue to launch competitive products, continue to expand and optimize the construction of domestic and overseas channels, and achieve steady growth in overall operating income; At the same time, the company continues to focus on its core advantages, consolidate technology research and development, actively expand the new product market, lay out the global retail channel matrix, and continuously build the brand influence of the company's various core product lines at home and abroad. The growth of the cloud platform business is mainly due to the continuous increase in the number of devices and users connected to the company, the continuous enrichment of cloud value-added service products, and the continuous strengthening of the industry-side PaaS open platform capabilities.

In 2024, the company's gross profit margin will be 42.08%, a year-on-year increase of -0.39pct, and the net profit margin will be 9.26%, a year-on-year increase of -2.37pct, of which the gross profit margin in 2024Q4 will be 39.95%, a year-on-year increase of +0.03pct, and the net profit margin will be 8.73%, a year-on-year increase of -3.39pct. In terms of products, the gross profit margin of 24A smart home and cloud platform business was +8.99/+0.1pct year-on-year respectively, and the gross profit margin of other businesses decreased to varying degrees year-on-year. In terms of regions, the gross profit margin of domestic and foreign sales in 24A was -0.5/-0.57pct year-on-year, and both domestic and foreign sales declined. In terms of channels, the 24A online/offline gross profit margin was -2.11/-0.21pct year-on-year, the offline gross profit margin basically remained stable, the competition in online channels was relatively fierce, and the gross profit margin declined significantly. The company's gross profit margin in Q1 2025 is 42.55%, a year-on-year increase of -0.04pct, and the net profit margin is 10%, a year-on-year increase of -0.11pct. The company's profit margins remained largely stable.

The company increases investment in brand promotion and marketing The

company's sales, management, R&D, and financial expense ratios in 2024 will be 15.77%, 3.26%, 14.95%, and -1.08%, respectively, and +1.77, -0.09, -0.14, and +0.19pct year-on-year; Among them, the sales, management, R&D, and financial expense ratios in the 24Q4 quarter were 16.61%, 2.44%, 13.18%, and 0.54%, respectively, +3.39, -0.71, -0.74, and +2pct year-on-year. The year-on-year increase in the sales expense ratio was mainly due to the fact that the company's newly expanded intelligent new products are still in the early stage of market construction, and the investment in various marketing expenses has increased. The company's sales, management, R&D, and financial expense ratios in Q1 2025 will be 14.28%, 3.06%, 14.75%, and -1.64%, respectively, with a year-on-year increase of -0.44, -0.37, -2.02, and +1.99pct. The company's R&D expense ratio has been optimized year-on-year; We believe that the change in the financial expense ratio is mainly due to the fluctuation of the exchange rate between the euro and the renminbi.

Investment suggestion: The company is a leading enterprise in the field of smart home, and the product side continues to expand categories and application scenarios through the integration of software and hardware, and gradually builds core barriers. On the revenue side, after years of cultivation, smart door locks have now entered the product harvest period, becoming the second curve that drives the company's revenue growth in addition to cameras; On the profit side, the change of channel structure, the improvement of product structure, and the cost reduction and efficiency increase brought about by the supply chain reform have led to the improvement of profit margin. According to the company's annual report and first quarterly report, we have added a 27-year forecast, giving a net profit attributable to the parent company of 6.6/7.6/880 million yuan in 25-27 years (the previous value of 6.6/760 million yuan in 25-26 years), and the corresponding dynamic PE is 43.3x/37.6x/32.7x, maintaining an "overweight" rating.

Risk warning: the penetration of smart home is less than expected; The implementation of AI applications is not as expected; the risk that the development of new products is less than expected; the risk that overseas market expansion is less than expected; Raw material price fluctuation risk.