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lushanjun's previous article evaluating ecovacs was refuted by the company.2024the disclosure of the semi-annual report not only reaffirmed lushan jun’s judgment, and once again proves that no matter how listed companies try to hide and disguise themselves, the ugly daughter-in-law will eventually have to meet her parents-in-law.

as the "first stock of sweeping robots", ecovacs' road down from the altar is steep and long: from increasing revenue without increasing profits to negative revenue growth, from various failures to being pointed out to have "hacker backdoors"... although various new products are still being launched, consumers feel that the substance remains the same, while investors are already worried.will there be a day when this “sweeping monk” is “swept out” by the market?

01

market value has been cut to the ankle

in the first half of 2024, ecovacs achieved revenue of 6.976 billion yuan, a year-on-year decrease of 2.35%, which is consistent with its market performance. net profit attributable to the parent company was 609 million yuan. although it increased by 4.26% year-on-year, it is not difficult for anyone with a discerning eye to see that this is a slight increase on a low base after the performance plummeted in 2023. moreover, there is still a considerable gap from the 850 million yuan and 877 million yuan in the two interim reports in 2021 and 2022.

investors have long been concerned about ecovacs. looking at the latest three semi-annual reports from 2022 to 2024, the company's operating income changed by 27.31%, 4.72%, and -2.35% year-on-year, respectively.the trend continues to decline, proving that its decline has not been improved.。

looking back at 2023, ecovacs has fallen into an obvious performance pit: the company's full-year revenue only increased by 1.16% year-on-year, while its net profit attributable to shareholders of the parent company plummeted by 63.96%.

from the very reluctant increase in revenue without increase in profit, to the revenue in the first half of this year that could no longer hold up, the deterioration of performance has long been reflected in the shrinking market value: in july 2021, ecovacs' highlight was fixed at 245.62 yuan per share, and its market value once exceeded 150 billion yuan; as of september 9, 2024, the company's stock price was 41.14 yuan, and its total market value was about 23.4 billion yuan, only one and a half percent left.

02

race with the tortoise and the hare

in sharp contrast to the decline in ecovacs' revenue, the market size of sweeping robots is still growing steadily.

in the first half of 2024, the global robot vacuum cleaner market will be worth approximately us$2.43 billion. the domestic robot vacuum cleaner market benefited from the driving effect of new products, with retail sales increasing by 9.3% year-on-year and retail volume increasing by 5.4% year-on-year, breaking the 2 million units mark in half a year for the first time.

benefiting from the market's popularity, stone technology, which is also in the sweeping robot market, is a latecomer but has surpassed ecovacs in terms of net profit.

in 2023, when ecovacs' net profit plummeted and suffered a major setback, stone technology achieved operating income 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%.although the revenue is not as high as ecovacs'6but the net profit is ecovacs's3this sharp contrast also reflects the low profit margin of ecovacs.

comparing the two parties' semi-annual reports in 2024, the speed gap is becoming more and more obvious: stone technology's revenue in the first half of the year was 4.416 billion yuan, a year-on-year increase of 30.9%, continuing to approach ecovacs; the net profit attributable to the parent continued to widen the gap with ecovacs, increasing by 51.57% year-on-year to 1.121 billion yuan.

roborock technology continues to generate 2 to 3 times the net profit of ecovacs with 60% of ecovacs' revenue.ecovacs cannot blame the industry and can only swallow the bitter pill of its own making in silence.

03

the peeping man hat is a great way to break down your defenses

for ecovacs, 2024 has been a year of double whammy: it has been left behind by its peers not only in performance but also in reputation.

at the 2024 def con security conference, two security researchers said that they had studied more than 10 products including sweeping robots, lawn mowing robots and air purifier robots, and found that there were security issues with ecovacs' sweeping robot products: almost anyone using a mobile phone can connect to and control the ecovacs robot via bluetooth from about 130 meters away, and by reading the wi-fi credentials, read all saved room maps, cameras, microphones and other data.

in this regard,ecovacs’ response was to acknowledge the problem and downplay the consequences.the company held a conference call to "respond to questions related to data security", stating that this is a means of cracking in technical attack and defense, but the probability of these security risks occurring in the user's daily use environment is extremely low. it requires professional hacking tools and close contact with the machine to complete, so users do not need to worry about it.

translated into normal human language, it means that although our anti-theft door is not safe, only a thief can break in by sneaking in and picking the lock, so don't worry about such a small matter.

in an era when personal privacy is increasingly valued, the risk of core data being snooped on has been exposed, and consumers are overwhelmed. it is still unknown whether ecovacs's rhetoric can resolve market concerns, but itsthe long-standing strategy of "focusing on marketing and neglecting research and development" has already shown its disastrous consequences.

from 2021 to 2023, ecovacs' advertising, marketing and platform service fees will total nearly 10 billion yuan. in 2023, ecovacs' advertising, marketing and platform service fees will be approximately 3.8 billion yuan, while r&d expenses will be approximately 825 million yuan.in the first half of the year, sales expenses were20.421 billion yuan, which is still five times its r&d expenditure.

04

won both the gold and bronze medals in the complaint list

the consequences of neglecting r&d are not only reflected in data security, but also in product quality.

on xiaohongshu, douyin and heimao complaint platforms, consumers have been complaining about the quality of ecovacs products and after-sales costs. as of september 9, ecovacs has received 3,630 complaints on heimao complaints. in the past 30 days, there have been 85 complaints about ecovacs, almost 3 complaints per day, and only 25 complaints have been resolved, less than one-third. another major brand of ecovacs, tineco, has received an even higher number of complaints, 8,089, with 89 complaints in the past 30 days and a resolution rate of less than half.

according to relevant data from the consumer service guarantee platform under the china electronic commerce association, as of the end of august, a total of 3,105 complaints related to sweeping robots were received, with the amount involved reaching 8.3 million yuan, and the effective complaint resolution rate was only 62.61%.

according to brand classification, tineco, dreame and ecovacs ranked the top three in the industry in terms of the number of complaints, accounting for more than 40% of the total complaints. among them, tineco received 569 complaints, accounting for 18.33%; dreame received 412 complaints, accounting for 13.27%; ecovacs followed closely with 401 complaints, accounting for 12.91%.

judging from the complaint resolution rate, haier, yunjing, xiaomi and roborock all exceeded 70%. the top three companies with the most complaints, tineco, dreame and ecovacs, were unsurprisingly the bottom three.

it is worth noting that tineco is also a brand under ecovacs.this means that ecovacs alone occupies two of the top three spots on the blacklist.according to the 2024 semi-annual report, these two brands accounted for more than 48% of ecovacs' revenue.

quality problems not only hurt consumers, but also investors, because they inevitably bring huge maintenance costs to ecovacs.ecovacs' after-sales and repair costs are as high as5.19billion yuan, an increase of139%, and even approached the net profit attributable to the parent company, which is quite a strange sight.

in a market with low barriers to entry, ecovacs' future is still unclear as its quality cannot compete with its competitors.