In the past, "sweeping grass"“ Coworth He is falling down from the altar step by step.
The market value has dropped from 140 billion yuan in the peak period to more than 30 billion yuan today.
In the first half of 2023, the net profit fell by 33%, and the annual net profit fell by 64%. In the first quarter of this year, the net profit continued to decline.
With, Sweeping robot As the competition in the field becomes more and more fierce, how can we return to the high growth in the past?
Non net profit will plummet by 70% in 2023
On the evening of April 26, Covos released its 2023 annual report. The financial report shows that in 2023, Covos will achieve a revenue of 15.502 billion yuan, up only 1.16% year on year; The net profit attributable to the parent company was 612 million yuan, down 63.96% year on year; Non net profit deduction dropped by more than 70% year-on-year to 484 million yuan. In addition, the net cash flow from operating activities of Covance fell 36.82% year on year
In terms of business, the sales revenue of the service robot of the Covance brand was 7.681 billion yuan, and the sales revenue of the high-end intelligent living appliances of the Tianke brand was 7.271 billion yuan. The total revenue of the two private brand businesses of Covance and Tianke reached 14.952 billion yuan, up 1.67% over the previous year, accounting for 96.45% of the company's total revenue in the reporting period.
It is worth noting that in 2023, the non net profit deduction of Kevos will decline quarter by quarter, and the net profit deduction of the fourth quarter with the highest annual operating revenue will be a loss of 38.22 million yuan, down 107% year on year.
As for the sharp drop in net profit, Covance said that due to the weak recovery of the domestic consumer market as a whole and the intensified industry competition, the product layout of the company's floor sweeping robot at the middle and low price segments in the domestic market was missing, and the investment in new business fields increased significantly, which jointly depressed the company's overall profit performance.
In addition, Coworth also believes that the company is facing multiple challenges. The company honestly reviews its strategic deficiencies, decisively adjusts its business strategy, firmly focuses on core categories, increases its product portfolio and layout, and lays a solid foundation for subsequent growth on the basis of striving to stabilize the overall business scale.
In the first quarter of this year, its revenue was 3.474 billion yuan, up 7.35% year on year, and its net profit attributable to the parent company was 298 million yuan, down 8.71% year on year; Non net profit deducted was 286 million yuan, a slight increase of 0.26% year on year, mainly because the proportion of sales and administrative expenses decreased year on year.
Focus on marketing rather than research and development
Over the years, Covance has spent money on marketing crazily.
In 2023, the sales expenses of Covance will reach 5.297 billion yuan, accounting for 34.2% of the total operating income. Among them, the advertising marketing and platform service fee was 3.799 billion yuan, accounting for 24.5% of the total operating revenue, which is equivalent to nearly a quarter of the operating revenue of Coves used for advertising.
From 2020 to 2022, the sales expenses of Covance will be 1.561 billion yuan, 3.237 billion yuan and 4.623 billion yuan respectively, accounting for 21.58%, 24.74% and 30.17% of the operating income of the year, It shows a rising trend year by year.
Unfortunately, the increase in sales fees failed to drive the company's performance to grow significantly, but swallowed up a lot of profits. The non net profit deducted by Covos has a negative year-on-year growth for seven consecutive quarters from the second quarter of 2022 to the fourth quarter of 2023.
In addition, the online market of floor sweeping robots in China has declined. According to the data of Ovi Cloud, in 2023, with retail sales as the statistical caliber, the online market share of Coves in China's sweeping robot will further decline to 30.3%, and with retail sales as the statistical caliber, the online market share will also decline to 34.4%.
In sharp contrast to the high sales costs, in recent years, the R&D expenses of Covos have been hovering around 5% for a long time. From 2019 to 2023, the R&D expenses of Covos will be 277 million yuan, 338 million yuan, 549 million yuan, 744 million yuan and 825 million yuan respectively, and the R&D rate will account for 5.22%, 4.67%, 4.2%, 4.86% and 5.32% respectively.
Although the R&D investment of Covance will increase by 10.84% year on year in 2023, the R&D personnel will decrease. By the end of 2023, the number of R&D personnel of the company had reached 1562, accounting for 16.11% of the total number of employees, 38 fewer than the same period last year, or 1.87 percentage points lower.
The R&D rate of Stone Technology in the domestic sweeping robot industry will be 7.37% in 2023, and the proportion of R&D personnel will be as high as 39%. It can be seen that Covance is significantly lower than its competitors in these two aspects. It can be seen that the criticism of "focusing on marketing and neglecting research and development" by Coves is not groundless.
Increased intra industry volume
In 2020, due to the inconvenience of most people going out, the demand for solving household problems has soared, and the sweeping robot has quickly become a popular product in the small household appliance industry. Covance seized this opportunity, and its performance grew rapidly and its stock price soared. In just over a year, the stock price of Covance rose from about 15 yuan to 250.71 yuan, an increase of more than 1600%.
With the progress of technology and the influx of a large number of small and medium-sized brands into the market, the competition in the field of sweeping robots has become increasingly fierce, the demand has begun to decline, and the growth predicted by the agency has also turned into a bubble. In order to compete for market share, enterprises have adopted price reduction strategies.
Since then, the stock price of Covance has also declined from the highest point to about 53 yuan today, a 78.8% decline. Its market value has shrunk by more than 100 billion yuan, with a total market value of only 30.58 billion yuan.
In order to seek new and new growth space, Covance has increased its efforts to expand overseas markets in recent years. In the research report, Guojin Securities pointed out that the penetration rate of sweeping machines in most countries is still low, and the improvement of product strength will help the penetration rate of overseas sweeping robots increase rapidly. It is estimated that the global market space of sweeping robots is about 45.44 million units/year, compared with 11.96 million units/year in 2022, there is still 280% growth space.
However, the road to the sea is not an easy one, and Covos is also facing many challenges. International enterprises such as Dyson and iRobot have strong brand effect overseas, and domestic enterprises such as Stone Technology have also gone to sea, which makes the market competition more intense.
Due to internal and external problems, the future growth potential of Covos still needs to be verified by the market.
