Event: The company released its 2024 annual report and 2025 first quarter report. 1) In 2024, the company will achieve revenue of 5.442 billion yuan, a year-on-year increase of +12.41%; The gross profit margin was 42.08%, a year-on-year increase of -0.77 pct, and the net profit attributable to the parent company was 504 million yuan, a year-on-year increase of -10.52%. 2) 2025Q1: The company achieved revenue of 1.380 billion yuan, a year-on-year increase of +11.59%; The gross profit margin in a single quarter reached 42.55%; The net profit attributable to the parent company was 138 million yuan, a year-on-year increase of +10.42%.

SHC: Functionalization, interactivity, and scenario-based drive to unlock more cloud payment scenarios. In 2024, the business will achieve revenue of 2.948 billion yuan and a gross profit margin of 37.19%. The company promotes the upgrade of smart home cameras to visualization, scene-based, interactive and intelligent, continuously enriches application scenarios, and explores more possibilities for cloud value-added functions. In 2024, the company launched the S10 camera, which can realize the two-way interaction between security monitoring and intelligent companionship of children and the elderly, the TAMO camera positioned in the pet companionship scene, and the eye bean that better matches the functional experience needs and aesthetic trends of the younger generation of users. The coupling between cloud payment and smart home cameras is strong, and the payment rate is expected to continue to increase with the improvement of the functionality and interactivity of smart products in specific scenarios.

Smart home: new product launch + revenue growth continues to improve, and the logic of the second growth curve is clear. In 2024, the business will achieve revenue of 748 million yuan, a year-on-year increase of +47.87%, and the proportion of revenue will increase to 13.85%; The gross profit margin increased to 42.53%, +8.99pct year-on-year, and the second growth curve was verified as the scale of the smart lock business continued to expand and the expense ratio decreased.

The company has launched innovative products such as cost-effective face + palm vein, industry-leading three-camera smart lock, and the Y3000 series, which focuses on face recognition and visual capabilities, has become a hot seller.

Intelligent service robots: from the incubation period to the revenue growth period, the third growth curve is expected to be implemented. The business is positioned in the company's third growth curve, and has achieved initial results on the marketing side, achieving revenue of 166 million yuan in 2024, an increase of about 2.7 times compared with 2023, and a gross profit margin of 14.58%. In 2024, the company will release the first home AI floor scrubbing robot RX30MAX and a new generation of home AI all-round sweeping robot RS20 Pro Ultra, and complete the trial operation test and system docking of EZVIZ commercial cleaning robot BS1 on the head client in Q4, promoting the product to enter the market in small batches.

Cloud services: The logic of profit increase has been further verified, and the AI application matrix + EZVIZ cloud ecology has been accelerated and improved. In 2024, the company's cloud revenue will increase to 1.052 billion yuan, a year-on-year increase of +22.87%, and the proportion of revenue will increase to 19.49%, driving the overall gross profit margin to increase by 0.10pct to 76.19%. By the end of 2024, more than 300 million IoT devices have been connected to the platform, including more than 250 million video devices, and the long-term growth logic of this business has been further verified. On February 21, 2025, the company officially announced that it would officially access the DeepSeek large model. On March 5, 2025, the cloud storage function launched functions such as AI intelligent search, AI daily summary, AI video summary, and personalized language prompts, which is expected to improve the user experience and increase the payment rate.

Profit forecast, valuation and investment rating: The company was born from Hikvision, a leading security company, inherited its AI vision technology capabilities, and successfully entered the smart home track. Considering that the company's smart home and robots construct a new growth curve, and continue to invest in technological innovation to drive product upgrades, we expect the company's net profit attributable to the parent company in 2025-2027 to be 6.87/8.53/1.034 billion yuan, (the company's net profit attributable to the parent company in 2025-2026 is forecast to be 7.30/871 million yuan before adjustment), and maintain a "buy" rating.

Risk warning: the risk that product innovation iteration is less than expected, the risk of intensified market competition, the risk of data security and personal information protection of cloud services, and the risk that the public information used in the research report may be delayed or updated in a timely manner.