Guosen Securities is forecasting that the logic of price-for-volume exchange in the sweeping machine industry is beginning to emerge, according to a recent research report released by the firm. As the current round of functional iterations of sweepers comes to an end, the demand for sweepers is expected to increase significantly with lower prices. Guosen Securities predicts that the sales volume of sweepers may reach levels of 6-7.5 million units again, with a compound growth rate of 19% from 2022 to 2025.
On the supply side, Guosen Securities believes that there is a potential for an overall cost reduction of sweepers ranging from 12% to 36%. This reduction in cost can be achieved through various methods, such as reducing the allocation of non-core functions and implementing cost reductions in core component technologies. However, achieving annual double-digit reductions in cost is seen as a significant challenge.
Against the backdrop of the turning point in domestic sweeping machines and the active recovery of overseas sweeping machines, Guosen Securities recommends leading sweeping robot companies Stone Technology (688169.SH) and Ecovacs (603486.SH).
The report highlights several key points, including the completion of the main function of sweepers and the emergence of price-for-volume logic. The continuous improvement of the product power of sweeping machines has driven up prices and maintained a structural upgrade in the industry. With the current round of sweeper function iteration coming to an end, the volume growth gap within the industry is expected to narrow, leading to an increase in sales growth rate starting in 2023.
Additionally, the report notes that the current retention rate of sweepers is less than 10%, indicating significant room for growth in the market. The core challenge lies in exploring how much price reduction can drive this growth.
In conclusion, Guosen Securities anticipates a promising future for the sweeping machine industry, with increased sales volume and potential cost reductions. The market outlook is positive, particularly for leading companies such as Stone Technology and Ecovacs. However, the report also highlights potential risks, such as fluctuations in domestic and foreign demand, intensified industry competition, and the possibility of overseas expansion not meeting expectations.