\u3000\u3 Guocheng Mining Co.Ltd(000688) 169 Beijing Roborock Technology Co.Ltd(688169) )
Key investment points
Event: the new products previously released by stone overseas will be listed in China: T8 (corresponding to overseas q7max +, 2999 yuan), g10s (corresponding to overseas s7maxv); It was officially put on sale on April 8.
What do you think of the new features?
The parameters / prices of the new products are similar to the overseas version released at the beginning of the year, which is in line with expectations. The specific comparison of parameters can be seen in the attached table.
T8: self dust collection at the middle end, complementary to t7s + at the middle and high end. The price of T8 is significantly lower than the high-end self dust collection t7s + (2999 yuan vs 4399 yuan) released last year, and the suction is upgraded compared with last year’s t7s + (4200vs2500pa). But ① the automatic lifting mop function is no longer retained; ② Replace cyclone dust collector with ordinary dust collector; ③ Obstacle avoidance is weakened and AI structured light is less than t7s +. Considering that the self dust collection function is more suitable for overseas countries with low demand for mopping, China has higher demand for self-cleaning mopping. We believe that T8, as a new self-cleaning product, will not necessarily replace the flagship sales position of self-cleaning G10 in China, but will complement the medium and high-end self-cleaning products with t7s + and improve the overall product layout.
G10s: self dust collection + self-cleaning high-end flagship model. G10s is the highest matching product of stone at present, and it is expected to form a benchmark with Ecovacs Robotics Co.Ltd(603486) x1 in terms of performance. In terms of function, in addition to the high configuration of suction and obstacle avoidance, the automatic lifting of mop + intelligent cleaning of base station with the characteristics of stone brand will also be retained.
It is expected that the listing of Q2 new products at home and abroad is expected to drive the company’s revenue, form an inflection point and catalyze the stock price.
What do you think of the product line layout of stone and Ecovacs Robotics Co.Ltd(603486) 2022 in the first half of the year?
In 2021, Ecovacs Robotics Co.Ltd(603486) , Shitou once occupied the blank area of the market and gained the share advantage of leading competitive products by virtue of the differentiated product layout of N9 + and G10. What is the current layout of the two sides in 2022?
Self cleaning + self dust collection super high-end (5000 + yuan): Ke (x1), Shi (g10s, i.e. s7maxv)
Self cleaning flagship (3999 yuan): Branch (T10), stone (G10)
Middle end self-cleaning ( Hunan Zhongke Electric Co.Ltd(300035) 00): Ke (N9 +), Shi [temporarily unavailable]
Low end self-cleaning (2999): Ecovacs Robotics Co.Ltd(603486) a little (K10), Shi [temporarily unavailable]
High end self dust collection (3500 +): Keke (overseas N8 +, lack in China), Shi (t7s, overseas S7 +)
Middle end self dust collection (2999): Ke [temporarily unavailable], Shi (T8, i.e. overseas q)
Both layouts tend to be improved to make up for last year’s shortcomings. At present, Ecovacs Robotics Co.Ltd(603486) leads the layout of [medium and low-end self-cleaning], and is expected to continue to lead in [China] this year; Stone takes the lead in [mid-range self dust collection], which is expected to better adapt to the [overseas] competitive environment.
How to look forward to the industry boom at home and abroad in 2022?
China: 2021 high-end first, 2022 middle-end supplement
In 2021, high-end products take the lead, and Ecovacs Robotics Co.Ltd(603486) x1 and other products significantly increase the average price, but the volume is slightly lower. According to orvey, in 2021, the retail sales of China’s floor sweeper industry was 12 billion yuan (YoY + 28%), 5.85 million units (yoy-10%) and the average price was 2048 yuan (YoY + 44%). 2021 can be described as the flagship product of China’s floor sweeper “arms war”. The product parameters and functions are getting higher and higher, which also brings the rapid upward movement of the price band. By the end of 2020, the proportion of high-end market sales corresponding to products above 3000 yuan was only 20%, while by the end of 2021, the proportion of high-end market sales had risen to 70%.
However, it is inevitable that the sharp upward movement of prices has also suppressed the large-scale performance of products to a certain extent. Superimposed on the supply chain repression such as core shortage in 2021, the industry as a whole presents a situation of price increment reduction.
2022 mid-range supplement, mid-range self-cleaning and other products are expected to bring volume growth to the industry. In 2022, the layout of various brands is expected to gradually shift from “high-end arms war” to “middle-end large-scale war”. For example, Ecovacs Robotics Co.Ltd(603486) released the new T10 (3999 yuan), and reduced the function and price based on the new x1turbo last year; And release the low-cost self-cleaning K10 (2999 yuan) as a sub brand. Stone’s new T8 also pays attention to the mid-range layout, rather than blindly piling up high functions and raising the average price. We believe that the current product function has reached the threshold of “easy to use”, and the easing of price this year is expected to contribute to the large-scale volume of the industry. It is expected that the core driver of the industry in 2022 will be volume increase, and the average price will also be supported by a small increase.
Overseas: the middle end will take the lead in 2021 and the high end will make up for it in 2022
In 2021, the middle-end will take the lead, with a large amount of middle-end products from dust collection of US $400. According to the caliber of iRobot, the overseas market sales in 2021 were US $2.79 billion (YoY + 7%), and there is no specific split in the growth rate of industry volume and price. However, we can refer to the absolute leader of iRobot in 2021, with volume + 2% and price + 4%. It is expected that the overall volume and price of the industry will also grow weakly.
Different from the rapid increase in the proportion of high-end products in China, the main source of overseas growth is expected to be middle-end products of $ Tus-Design Group Co.Ltd(300500) , rather than high-end products of more than $500. Take the revenue proportion of iRobot as an example (products below $200 are not counted). The proportion of entry-level products of $200300, mid-range products of $ Tus-Design Group Co.Ltd(300500) and high-end products of more than $500 has changed from 20:15:65 in 2020 to 15:35:50 in 2021. The proportion of the middle end increased rapidly. The rapidly growing mid-range products are mostly the combination of entry-level + self dust collection base stations (such as iroboti3 +, sharkur1005ae, etc.). On the one hand, it shows that overseas has the same strong demand for base station products as China, but on the other hand, because the overseas R & D strength is weaker than China, there are no ultra-high-end products similar to Ecovacs Robotics Co.Ltd(603486) x1 and stone s7maxv to meet the overseas demand for high-end products.
2022 high-end supplement. Ke and Shi are about to go to sea X1 and other ultra-high-end products, which are expected to increase the average overseas price. This year, Ecovacs Robotics Co.Ltd(603486) , stone joined the overseas war with high-end new products. Considering that the purchasing power of overseas users in Europe and America is stronger than that in China, the acceptance of high average price and high-performance products is expected to be higher. Overseas product upgrades are expected to continue. In 2022, it is expected that the average price of the overseas industry will continue to rise.
Investment suggestion: buy rating.
The profit margin of Q4 has declined due to the investment of expenses, but the risk caused by short-term profit fluctuation has been fully released in the stock price adjustment. From a long-term perspective: ① the company’s products and R & D strength are still in the first echelon, maintaining global leadership; ② The company’s various shortcomings in making up channels and marketing bring short-term cost pressure, but it is a continuous increase in long-term competitiveness; ③ The current valuation is the historical bottom area of the company, which has long-term layout value. Short term: the release of new products is also expected to form a revenue pull and bring stock price catalysis.
Considering the profit margin fluctuation caused by short-term launch, we adjust the profit forecast. It is estimated that the net profit attributable to the parent company in 21-23 years will be 1.4 billion, 1.7 billion and 2.2 billion (the previous value is 1.6 billion, 2.2 billion and 2.6 billion), corresponding to pe25x, 20x and 16x. Maintain buy rating.
Risk warning: supply chain risks such as shipping / core shortage, industry demand is lower than expected, and the cost investment is higher than expected
