"Investor Network" Sun Xianfeng

Editor Wu Yue

The title "sweeping grass" may only be left in the research reports of a number of brokerages.

On February 24th, Stone Technology (688169.SH) disclosed its 2021 performance, KuaiBao, with revenue of 5.837 billion yuan, up 28.84 percent over the same period last year, and net profit of 1.402 billion yuan, up 2.4 percent over the same period last year. After deducting 1.189 billion yuan, it was 1.52 percent lower than the same period last year. In the previous two years, the homing net profit was 783 million and 1.369 billion respectively, with a corresponding growth rate of 154.52% and 74.92%. On the same day, it was also announced that XIAOMI led eight shareholders, including Dong Jiangao, to reduce their holdings and cash out about 5 billion yuan.

"performance growth slowed while deducting non-net profits also declined, coupled with some original shareholders, including executives, to cash out and reduce their holdings, this double-hit negative attack, the market response will certainly not be good." A leading brokerage analyst said, "the recent trend of continuous decline also reflects the market's concern about the future."

Shares in stone technology fell to nearly 13% at the start of trading on February 25, with 583 yuan at a 52-week low, according to data. As of March 4, Stone Technology shares closed at 596.59 yuan, down 60% from the peak of 1492.99 yuan in June last year.

It is worth noting that under the multiple unfavorable factors such as the lower-than-expected performance of KuaiBao and the reduction of shareholders' holdings, some brokerages are still applauding.

According to the statistics of Investor Network, in just five days from February 25 to March 2, 16 brokerages issued a "buy" rating-based "buy" research report, and some brokerages even set a stock price target of 1000 yuan for Stone Technology.

Competition intensifies and performance growth slows

Stone technology, which is mainly engaged in floor-sweeping robots, is the white horse stock and "sweeping grass" in the eyes of investors, but the report card is not good-looking in the past year.

According to KuaiBao, the company's newly disclosed performance, total operating income in 2021 was 5.837 billion yuan, an increase of 28.84% over the same period last year; the net profit of returning home was 1.402 billion yuan, up only 2.40% from the same period last year; and deducting non-net profit was the first negative growth, down 1.52% to 1.189 billion yuan. In the first three quarters of last year, the company's home net profit and deducted non-net profit still maintained a certain increase, so it is not difficult to infer that the performance declined significantly in the fourth quarter.

In fact, performance growth is almost stagnant, which undoubtedly gives investors a head-on blow. You know, from 2016 to 2020, when the company's public performance was disclosed, its operating income soared from 1.83 billion yuan to 4.53 billion yuan, and its net profit jumped from-11.24 million yuan to 1.369 billion yuan, almost a perfect interpretation of the high growth characteristics of Science and Technology Innovation Board's enterprise.

As for the performance in 2021, Stone Technology explained that due to external factors, global capacity was tight, container stranded ports, ship jumps and poor transportation cycles occurred frequently, which had a certain impact on the company's revenue growth.

At the same time, in the second half of 2021, the company increased its investment in R & D and sales expenses, affecting its annual performance. Also faced with external unfavorable factors, the performance of its peer Coworth in 2021 is obviously different from that of stone technology. according to its previously disclosed performance forecast, Kovos expects 2021 net profit to grow by 211.9% Mu 219.7%, deducting non-net profit by 248.4% Mel 257.8%.

There is a market view that the deep-seated reason for the slowdown in stone science and technology performance comes from the cruel market competition.

Data show that 90% of the sales channels of China's floor-sweeping robots come from online, and the e-commerce channels show a super-strong situation. In 2020, Coworth was far ahead with 41 per cent of the market share, with XIAOMI, Stone Technology and cloud whale fighting in the second camp, accounting for 16 per cent, 11 per cent and 11 per cent respectively; offline channels had an early layout and a market share of more than 80 per cent.

Just over the past year, Corworth is still a dominant, more intense competition, launched in the second echelon. Since 2020, Stone Technology has suddenly increased its investment in the market, and the sales expenses of that year soared by 75.14% to 620 million yuan, far exceeding the 7.74% revenue growth that year. Last year, it was announced that the traffic star Xiao Zhan had been signed as a spokesman, and the sales expenses in the first three quarters of that year had exceeded 500 million yuan.

In fact, the phenomenon of "different lives in the same industry" between Covos and Stone Technology has begun to appear since 2020. In 2020 and the first three quarters of 2021, the net profit of Stone Technology increased by 74.92% and 12.98% compared with the same period last year. Coworth is 431.22% and 432.05%, and Stone Technology has seen a decline in net profit growth for two consecutive quarters.

From the performance of market share, there is also a certain gap between the two at present. According to Oviyun's monitoring data, the listing rate of the Corvus line was 41% in 2020. Although the industry competition has intensified in 2021, the leading position of Kovos has become more stable, and the share of online listing has further risen to 45% in 2021. Stone's share of online listing fell from 16% to 14%, and the second place in market share was overtaken by cloud whales.

The "Stone" held up by XIAOMI

The actual controller of Stone Technology is 40-year-old Changjing, who worked as product manager at Tencent and Baidu, Inc. and founded Stone Technology in 2014. Stone Technology has been losing money until 2016. In September 2016, Stone Technology launched the first customized "Mi Jia Intelligent floor sweeping Robot" by XIAOMI, which developed rapidly and landed on Kechuangban in February 2021.

Before listing, Stone Science and Technology conducted a total of five rounds of financing, of which XIAOMI Group and Lei Jun's Shunwei Capital participated in three rounds. Stone Technology is also regarded as XIAOMI Ecological chain Company because of its contract manufacturer XIAOMI floor-sweeping robot.

After landing on the board, Stone Technology once staged "Crazy Stone." The issue price of Stone Science and Technology was 271.12 yuan, which was the highest issue price of Science and Technology Innovation Board at that time. On the day of listing, Stone Technology once rose by more than 98%.

At the beginning of the listing, Shunwei Capital and Jinmi Investment, controlled by Lei Jun, had a combined 24.7 per cent stake, making it the largest shareholder besides founder Changmin. By the end of the third quarter of last year, Shunwei Capital and Jinmi Investment had accumulated 15.75% of their shareholdings, and Jinmi Investment's latest plan to reduce its holdings by 2%. Upon completion, the shareholding will be further reduced to 13.75%.

It is worth mentioning that just after the lifting of the ban, Stone Technology executives and XIAOMI and other shareholders have already "stepped on the spot" to reduce their holdings once, when 10 shareholders reduced their holdings by 11.1%, involving a market capitalization of more than 7 billion yuan.

To some extent, Stone Technology is the company raised by XIAOMI. At the beginning of its establishment, Stone Technology quickly gained a firm foothold by virtue of XIAOMI's omni-directional support in brand, channel and supply chain. From 2016 to 2021, the revenue of stone science and technology was 183 million yuan, 1.119 billion yuan, 3.051 billion yuan, 4.205 billion yuan, 4.53 billion yuan and 5.837 billion yuan, respectively. It is not difficult to see that stone science and technology has experienced explosive growth since 2018, and its corresponding time point is the listing of XIAOMI.

On February 21, 2020, Stone Science and Technology landed on the board, with an issue price of 271.12 yuan per share, the highest issue price of Science and Technology Innovation Board's new shares. Less than a year after listing, the company's share price broke through 1000 yuan, becoming the second thousand yuan share of A shares after Maotai.

At present, XIAOMI has a total of 5 floor-sweeping robot contract manufacturing enterprises, including pursuit, Yunmi, Silver Star Intelligence and Shanchuan Technology in addition to Stone Science and Technology. Among them, it did not enter the vacuum cleaner field until 2019, but its sales exceeded 2 billion in the second year. The search starts with wireless hand-held vacuum cleaners. At present, its category has been covered by intelligent floor washers, sweeping mop and drying robots.

However, XIAOMI's help eventually turned into the pressure on the sustained growth of Stone's scientific and technological performance. The requirement of high quality and low price of XIAOMI ecological chain products determines that XIAOMI reduces the cost of ecological chain enterprises to the extreme. The stone technology of "de-mileization" has successively launched own-brand floor-sweeping robots such as stone and Xiaowa, which compete head-on with XIAOMI's Mijia floor-sweeping robot. In July 2020, Stone Technology also released an equity incentive plan, in which the standard of performance evaluation is to increase the sales of Stone Technology's own brand.

From 2019 to the first half of 2021, stone technology own brands accounted for 65.73%, 70.72% and 98.23% of sales, respectively. With the increase in the proportion of private brands, the most obvious benefit is the increase in gross profit margin. By contrast, the gross profit margin of XIAOMI robot, which is manufactured by stone technology, has been below 20%. With the growth of private brand sales, stone technology gross profit margin has increased from 19.21% in 2016 to 51.32% in 2020.

While the gross profit margin increases, the de-millet also increases the sales cost of stone technology gradually. In the first three quarters of 2021, stone technology marketing expenses reached 513 million, accounting for 13.4% of the total revenue, an increase of 39.4% over the same period last year.

Stockholders reduce their holdings and securities firms applaud

Under the strategy of "de-mileization" of Stone Science and Technology, its own brand has fallen into a game of increasing gross profit and sales expenses, while the original shareholders of Stone Science and Technology and the directors and supervisors have chosen to "ship goods every high", cashing out billions.

As early as February 2021, when the company's listing ushered in a huge amount of 30 billion yuan in lifting the ban, 10 shareholders, including Stone Age and a number of Dong Jiangao, put forward a plan to reduce their holdings: the number of shares to be reduced is nearly 7.4 million shares, accounting for more than 11% of the company's total share capital. the market capitalization exceeds 7.1 billion yuan.

According to the statistics of the "Investor Network", this round of reduction was led by Lei Jun's Shun to capital of 594 million yuan, followed by Tianjin Jinmi, Qiming, Gaorong and other investment institutions that reduced their holdings to 1.65 billion yuan, 826 million yuan and 828 million yuan respectively. In addition, Dong Jiangao, Wu Zhen, Mao Guohua, Wan Yunpeng, and Zhang Zhichun also cashed out 422 million yuan, 422 million yuan, 184 million yuan and 184 million yuan respectively.

The share price of Stone Technology has halved after the first round of reduction, but the major shareholders and Dong Supervisor Gao clearly have no intention to stop. According to the announcement of the reduction plan issued on February 24, eight shareholders, including Tianjin Jinmi and Dong Jiangao, plan to reduce their holdings by no more than 10.752%. With the current market capitalization of 44.9 billion yuan of Stone Technology, the market value of this wave of reduction is as high as nearly 5 billion.

Enterprise investigation shows that the actual controller behind Tianjin Jinmi is Lei Jun, a well-known entrepreneur, the Stone Age is the employee shareholding platform of Stone Technology, and Wan Yunpeng, Wang Xuan and Sun Jia are the company's Dong Jiangao.

While the share price has halved and the original shareholders, including senior executives, have reduced their holdings one after another, some brokerages are still quite optimistic about the company's prospects, giving a "buy"-based bullish rating.

Among them, CITIC gave a target price of 1000 yuan /, and pointed out in the research report that when the company released its performance in 2021, KuaiBao, driven by the growth of new domestic products and overseas markets, the overall revenue was basically in line with expectations. however, due to the pressure of shipping, supply chain and raw materials, net profit is relatively under pressure. At the industry level, the global floor sweeping robot industry is still in a stage of rapid growth, and global demand will remain high in 2022 with the gradual stabilization of external influences such as the supply chain. For the company, with the continuous growth of domestic new products and the steady expansion of overseas new products and channels, the company's revenue structure and long-term profit margins are expected to continue to improve. Be optimistic about the company's medium-and long-term growth and the performance improvement opportunities brought about by the improvement of the supply chain in the middle of the year, and continue to maintain the company's "buy" rating. (produced by thinking Finance)