With a profit of 2 billion per year, Stone Technology has won the game

Like many household products, cleaning appliances experienced super-fast growth from 2020 to 2022. However, since 2022, macroeconomic uncertainty has posed challenges to the sales of cleaning appliances, and the industry has performed poorly. However, among the companies in this field, Stone Technology has achieved a significant increase in performance against the trend.

On the evening of the 28th, Stone Technology released its 2023 annual financial report, achieving double growth in revenue and net profit, with a net profit increase of more than 70%, which attracted attention in the industry.

Stone Technology's annual net profit exceeds 2 billion

Stone Technology is mainly engaged in the design, research and development, production and sales of smart hardware such as smart cleaning robots. Its main products include smart sweeping robots, floor scrubbers, washer-dryers and other smart appliances. It is one of the leading companies in cleaning appliances.

In 2023, Stone Technology achieved revenue of 8.654 billion yuan, a year-on-year increase of 30.55%, and net profit attributable to shareholders of the parent company of 2.051 billion yuan, a year-on-year increase of 73.32%.

From the perspective of product classification, the revenue of smart sweepers and accessories was 8.085 billion yuan, an increase of 27.41% over the previous year, and the gross profit margin reached 56.15%, an increase of 6.63 percentage points year-on-year; the revenue of other smart electrical products was 554 million yuan, an increase of 109.40% over the previous year, and the gross profit margin was 43.31%.

The substantial increase in Roborock Technology's performance was mainly due to the launch of a number of new products and the expansion of domestic and overseas markets, the expansion of sales scale, the enhancement of market competitiveness, and the improvement of profitability and operating performance. Emphasis on R&D and dual drive of domestic and overseas markets are important factors in Roborock Technology's rapid growth.

The market demand for smart cleaning appliances is growing, but this is also a technology-driven enterprise. As industry competition becomes increasingly fierce, companies must continuously upgrade product functions to meet more diverse user needs and maintain or expand their market share.

Last year, Roborock launched a number of high-performance sweeping robots, floor scrubbers and molecular sieve washer-dryers, which were recognized by the market. Behind the product iteration, Roborock invested 619 million yuan in research and development in 2023. As of the end of last year, the company had as many as 622 R&D personnel and obtained 522 new domestic and foreign authorized patents.

In terms of regions, the proportion of domestic and overseas revenue of Stone Technology was almost the same, 4.411 billion and 4.229 billion respectively, but the domestic operating costs increased by 30% year-on-year, while the overseas operating costs decreased by 0.7% year-on-year. In comparison, the overseas business had a better gross profit performance, with a gross profit margin of 61.65%, while the domestic part was 49.26%.

In the domestic market, Stone Technology focuses resources on consolidating its mid-to-high-end brand image, and deploys products in multiple price ranges to ensure that products cover all price ranges. In terms of brand, the company makes full use of its product series on sale to express brand characteristics, strengthen user minds, and continue to expand its market influence through new products. On the other hand, the company continues to increase the publicity and promotion of its own brands, and increase brand awareness through traditional e-commerce cooperation, new channel layout and other means.

According to data from Aowei Cloud Network, in 2023, Stone Technology's sweeping robot online market retail sales share reached 23.89%, an increase of 2.61 percentage points year-on-year.

Overseas markets contribute nearly half of Roborock's revenue. In overseas markets, Roborock takes advantage of the potential market size and high-quality products to focus on the US, European and Asia-Pacific markets, and has gradually established a global distribution network, with products sold to more than 170 countries and regions around the world.

In major overseas markets, Roborock Technology has established local branches and overseas companies to improve its market position and provide better after-sales service. Currently, it has established overseas companies in the United States, Japan, the Netherlands, Poland, Germany, South Korea and other places, and opened online brand stores on online platforms such as Amazon, Home Depot, Target, Bestbuy, WalMart, etc. In 2023, Roborock Technology entered the US offline physical chain retail channel Target for the first time, taking a big step in the supermarket channel.

Roborock Technology has become well-known overseas. During the overseas Black Friday and Cyber ​​Monday in 2023, Roborock Technology's GMV in North America increased by 30% year-on-year. Even with its own factory, the production pressure is very high, and the production capacity of the foundry is still in short supply.

In comparison, Ecovacs, which is also in the cleaning appliance market, has a dismal performance.

The performance forecast shows that Ecovacs expects to achieve a net profit attributable to shareholders of RMB 600 million to RMB 680 million in 2023, a year-on-year decrease of 59.96% to 64.67% compared with RMB 1.698 billion in the same period last year; it is expected to achieve a net profit attributable to shareholders of RMB 436 million to RMB 516 million after deducting non-recurring items, a year-on-year decrease of 68.27% to 73.19% compared with RMB 1.626 billion in the same period last year, with the net profit being "halved".

Ecovacs analyzed that the main reason for its expected performance reduction lies in the domestic market. Affected by the downward trend in the average price of domestic industry products, the gross profit margins of the company's sweeping robots and floor scrubbers have declined compared with the same period last year ; at the same time , affected by the macro-economy, the domestic consumer sentiment is weak, coupled with the intensified industry competition and changes in the online channel structure, resulting in a decline in market investment conversion efficiency, and the company's sales expenses accounted for an increase in the proportion of revenue compared with the same period last year . In addition, its new categories such as commercial cleaning robots , lawn mowing robots , and Shiwan smart food processors are in the net investment period , which has depressed the overall profit performance.

However, Ecovacs' overall revenue scale is still expected to increase slightly, and the overall market share and revenue share of overseas business are also steadily increasing. The lawn mowing robot exceeded the established operating goals in its first year on the European market , and its performance in 2024 is worth looking forward to.

Chinese brands take the lead, and small cleaning appliances have a promising future

As for the overall situation of sweeping machines going overseas, in 2023, Chinese brand sweeping machines and cleaning appliances achieved remarkable achievements in overseas markets, achieving a simultaneous increase in sales volume and price. Mid-to-high-end products were highly sought after by the market due to their leading technology and complete functions.

Compared with other domestic export categories, small cleaning appliances have performed amazingly, and Chinese brands have begun to lead the development of the industry. In the recently released "Cross-border E-commerce Smart Cleaning Appliance Brand Influence List ( 2023/12)", the top ten are Dyson, Roborock, Eufy, Shark, Dreame, iRobot, Tineco, NARWAL, Ecovacs, and ILIFE. Chinese brands occupy 8 seats, almost dominating the list.

Sweeping machines are a high-demand small appliance in both the domestic and overseas markets. In the next few years, small appliances and the cleaning appliances they are subdivided into will see substantial growth.

Research firm IDC pointed out that the size of the global smart home market will continue to grow from 2023 to 2027, driven by the demand for convenience, energy efficiency and security. Consumers around the world are looking for ways to simplify their daily lives and make their homes more comfortable and secure.

IDC predicts that by 2027, the global smart home market will exceed 1 billion, with a compound annual growth rate of 5.6%, and North America, Europe and Asia Pacific will continue to grow. By 2027, the global market capacity of sweepers will grow to 23.2 million units. Improvements in product functions and expansion of usage scenarios will drive the growth of the sweeper market, and the annual growth rate of the sweeper market will be higher than that of the overall smart home market.

There is still great potential in the overseas market for cleaning appliances.