Event: Recently, the company released its 2024 annual report and 2025 first quarter report. According to the company's announcement, the revenue 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%. In Q4 alone, the company's revenue 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%. In 25Q1 alone, the company's revenue was 1.380 billion yuan, a year-on-year increase of +11.59%, and the net profit attributable to the parent company was 138 million yuan, a year-on-year increase of +10.42%. The results were in line with expectations.

The AI + IoT cloud platform empowers the growth of the main business. 1) The second curve has been upgraded from star business to cash flow business. According to the company's announcement, the revenue of smart home business in 24 years was 748 million yuan, a year-on-year increase of +47.87%, a gross profit margin of 42.53%, a year-on-year increase of +8.99pct, villa doorbells, smart cat's eyes and other products were competitive, and the hot sales of smart locks and explosive products drove the gross profit margin to continue to improve. According to the door lock world, the EZVIZ AI smart lock Y5000FVX integrates three innovative technologies: AI voice interaction, AI agent and AI blue ocean model empowerment, detonating the order boom of the 2025 channel partner conference, and the on-site order volume exceeded 170,000, a record high. 2) Rapid growth in cloud platform revenue. According to the company's announcement, the cloud platform service revenue in 24 years was 1.052 billion yuan, a year-on-year increase of +22.87%, mainly due to the number of equipment access and the number of users, the richness of cloud value-added service products, and the continuous improvement of the industry-side PaaS open platform capabilities. With the expansion of the company's product matrix, the ARPU value of cloud services is expected to continue to increase.

The online channel is smooth, and the new products have a scale effect. According to the company's announcement, in 24Q3, due to channel transformation and new product promotion, the company invested more on the expense side, which put pressure on profits. From the perspective of 24Q4, the online transformation of traditional channels has been smooth, the ROI of multiple platforms has increased, and the benefits of global harvesting and transformation have been achieved. At the same time, new products such as service robots are gradually gaining a foothold. The trend of 25Q1 continued, the sales expense ratio gradually decreased, and the company's net profit margin rose to 10.00%, which was roughly the same as that in 24Q1, indicating that the channel transformation and new product promotion have passed the painful period. In addition, "warm technology", "rejuvenation", and "she power" promote brand building, which is expected to feed back product sales.

The decline in operating cash flow was mainly due to the impact of inventory and accounts receivable. According to the company's announcement, the company's operating cash flow in 24 years was 548 million yuan, a year-on-year increase of -43.44%. The main reasons are: 1) the company continued to expand sales in domestic and foreign channels, and at the same time, the sales growth rate of 24Q4 e-commerce self-operated platforms increased, resulting in an increase in the book balance of accounts receivable during the credit period. 2) The company strengthened the cooperation of cross-border e-commerce platforms and increased the construction of overseas local warehousing, and stocked up in advance to increase short-term inventory, which is expected to improve the efficiency of reaching overseas consumers and the company's brand influence.

Investment Analyst Opinion: Based on the 2024 annual report and the first quarter of 2025, the earnings forecast has been lowered. It is estimated that in 25-26 years, the revenue growth rate of smart cameras will be +0%/+0% (previous value +6%/+6%), and the revenue growth rate of smart home will be +42%/+42% (previous value +47%/37%). It is estimated that the revenue forecast value in 25-26 years will be 6.214/7.185 billion yuan (the previous value is 6.576/7.892 billion yuan), and the net profit attributable to the parent company will be 591/691 million yuan (the previous value is 7.14/947 million yuan). The new 27-year revenue/net profit attributable to the parent company is forecast to be 8.467/872 million yuan. The company's ecosystem has been upgraded to "2+5+N" and AI has begun to drive the company's performance growth.

Risk warning: competition in the smart home industry is intensifying; Commercialization of AI algorithm packages is lower than expected; Overseas business development did not meet expectations.