3Q19 results in line with our forecastViomi’s 3Q19 revenue rose 89.2% YoY to Rmb1.07bn; non-GAAP net income rose 116.8% YoY to Rmb83.9mn. The results are in line with our forecast and the revenue growth exceeds 3Q19 official guidance, despite the challenging home appliances market. As we remain cautious about a recovery in China’s home appliances shipment in 4Q19 and 2020, we cut our 2019 and 2020 earnings estimates by 7% and 11%.
We maintain OUTPERFORM rating and our US$12.5 TP (11.3x 2020e non-GAAP P/E), implying 23.8% upside.
Volume growth in water purifiers offset by ASP decline.Water purifier revenue increased 1% YoY in 3Q19. For Viomi’s water purifier revenue, we estimated roughly 20%YoY growth in sales volume which was offset by a 20% YoY decline in ASP on intense competition in 3Q19.For 4Q19, we expect a more healthy revenue performance with YoY growth back to double digits thanks to contribution from the 11/11 sales event in China.
Other IoT home appliances maintain robust growth, despite market headwinds. Revenue from Viomi’s other products (excluding water purifier systems) increased 142% YoY in 3Q19, thanks to continued uplift of Viomi’s brand power, as well as the successful launches of new Xiaomi-branded products,such as sweeping robots, range hoods, and gas stoves. With challenging macro conditions ahead, we stay cautious on Viomi’s revenue growth prospects in 4Q19 and 2020.
Continues to cooperate with Xiaomi in AIoT. The company reiterated it has a good relationship with Xiaomi, and will continue to cooperate with Xiaomi in AIoT product categories. We believe 5G will boost the AIoT industry,which we expect to become a long-term growth driver for Viomi.We lower our 2019 and 2020 earnings forecasts by 7% and 11%, as we remain cautious about a recovery in China’s home appliances market in 4Q19 and 2020. The stock is now trading at 14.2x and 9.1x non-GAAP 2019/2020 P/E.
We maintain OUTPERFORM and our TP of US$12.50 (17.5/11.3x 2019/2020 P/E, 23.8% upside).Demand fluctuations; tough competition in products.Figure 1: Results review and earnings forecast revisions
Source: Corporate filings, Wind Info, CICC Research
Figure 2: Earnings forecast breakdown, by business segment
Source: Corporate filings, Wind Info, CICC Research
Figure 3: CICC estimates vs. market consensus
Source: Corporate filings, Wind Info, CICC Research
Source: Wind Info, Bloomberg, CICC Research
Source: Wind Info, Bloomberg, CICC Research
黃樂平 leping.huang@cicc.com.cn胡譽鏡 yujing.hu@cicc.com.cn 閆慧辰 huichen.yan@cicc.com.cn丁寧 ning.ding@cicc.com.cn 楊俊傑 junjie.yang@cicc.com.cn 陳旭東 xudong.chen@cicc.com.cn成喬升 qiaosheng.cheng@cicc.com.cn劉瑩瑩 yingying.liu@cicc.com.cn李詩雯 shiwen.li@cicc.com.cn姚遜宇 xunyu.yao@cicc.com.cn韋昕 xin.wei@cicc.com.cn
本公眾號僅是轉發中金公司已發布報告的部分觀點,所載盈利預測、目標價格、評級、估值等觀點的給予是基於一系列的假設和前提條件,訂閱者只有在了解相關報告中的全部信息基礎上,才可能對相關觀點形成比較全面的認識。如欲了解完整觀點,應參見中金研究網站(http://research.cicc.com)所載完整報告。
本資料較之中金公司正式發布的報告存在延時轉發的情況,並有可能因報告發布日之後的情勢或其他因素的變更而不再準確或失效。本資料所載意見、評估及預測僅為報告出具日的觀點和判斷。該等意見、評估及預測無需通知即可隨時更改。證券或金融工具的價格或價值走勢可能受各種因素影響,過往的表現不應作為日後表現的預示和擔保。在不同時期,中金公司可能會發出與本資料所載意見、評估及預測不一致的研究報告。中金公司的銷售人員、交易人員以及其他專業人士可能會依據不同假設和標準、採用不同的分析方法而口頭或書面發表與本資料意見不一致的市場評論和/或交易觀點。
在法律許可的情況下,中金公司可能與本資料中提及公司正在建立或爭取建立業務關係或服務關係。因此,訂閱者應當考慮到中金公司及/或其相關人員可能存在影響本資料觀點客觀性的潛在利益衝突。與本資料相關的披露信息請訪http://research.cicc.com/disclosure_cn,亦可參見近期已發布的關於相關公司的具體研究報告。
未經書面許可任何機構和個人不得以任何形式轉發、轉載、翻版、複製、刊登、發表、修改、仿製或引用本訂閱號中的內容。