Technological premium reshapes the industry logic: Insights from Ecovacs' record - high net profit in Q1
On April 26, Ecovacs Group released its financial reports for 2024 and the first quarter of 2025.
Data shows that in 2024, Ecovacs Group achieved an operating revenue of 16.54 billion yuan, a year - on - year increase of 6.7%. During the same period, the net profit attributable to the parent company was 810 million yuan, a year - on - year increase of 31.7%. In Q1 of 2025, the revenue further increased by 11.1% to 3.86 billion yuan. What's even more exciting for the market is that the profit growth in the first quarter was far better than the revenue growth. During the same period, the net profit attributable to the parent company increased to 480 million yuan, with a year - on - year growth rate as high as 59.4%.
Image source: Ecovacs WeChat official account
Regarding the recovery of this performance, some market voices attribute it to the catalysis of the national subsidy policy. However, the continued significant improvement in profitability in Q1 of 2025 means that the national subsidy is not the only determining factor. In fact, the improvement of product competitiveness brought by technological innovation to the two brands under Ecovacs Group and the scale effect and cost reduction and efficiency improvement under global expansion are more important, because this represents the improvement of its internal driving force. Compared with external factors, the market is obviously more concerned about the sustainability and certainty of future performance growth driven by internal driving force.
So, what are the highlights of Ecovacs Group's current financial report? Can its future growth logic be realized in the long term?
01. A New Paradigm of Dual - wheel Growth Driven by Technology
From the perspective of revenue, in 2024, Ecovacs Group's operating revenue was 16.54 billion yuan, a year - on - year increase of 6.7%, and the growth rate significantly recovered compared with 2023. At the quarterly level, the company's revenue growth rate accelerated starting from Q4 of 2024, and it has been expanding at a double - digit rate for two consecutive quarters.
What's more noteworthy is that Ecovacs Group has a very balanced revenue structure, and its two brands, Ecovacs and Tineco, have achieved simultaneous progress. By brand, in 2024, the service robots of the Ecovacs brand and the smart household appliances of the Tineco brand recorded revenues of 8.08 billion yuan and 8.06 billion yuan respectively, a year - on - year increase of 5.2% and 10.9%, and the revenue accounted for 48.9% and 48.7% respectively.
Image source: Ecovacs WeChat official account
The balanced development model of Ecovacs Group's two brands shows rare strategic foresight. The Ecovacs brand takes the sweeping robot as its anchor point and continuously consolidates its dominance in the core market, while the Tineco brand uses the floor washer as its spear and has completed the leap from a new brand to a global leader in a few years. The uniqueness of this "dual - wheel drive" lies in that when the industry is generally in the dilemma of the main brand's stalled growth and the sub - brand's difficulty in achieving success, Ecovacs has achieved strategic complementarity between the two brands and jointly built a product matrix covering all scenarios of floor cleaning.
Specifically, regarding the reasons for the performance growth, in September last year, the policy of trading in old home appliances for new ones was launched and further strengthened this year. The national subsidy policy has fully stimulated the demand for upgrading and replacing cleaning home appliances and stimulated the industry to start a new round of purchasing boom. According to data from Aowei Cloud Network, in 2024, the retail sales of domestic sweeping robots and floor washers were 6.036 million units and 6.615 million units respectively, a year - on - year increase of 31.7% and 31.1%.
As the leader in the two tracks, the national subsidy dividend undoubtedly provides support for the sales growth of the products of the Ecovacs and Tineco brands. However, as mentioned above, external factors are just icing on the cake rather than the decisive factor in boosting sales.
In Q4 of 2024, the shipments of the Ecovacs and Tineco brands increased by 47.5% and 32.7% respectively, much faster than the industry average. This is more the result of the optimization of the company's product matrix and the improvement of product strength, which is inseparable from the technological innovation support brought by the group's long - term high - intensity investment.
Image source: Ecovacs WeChat official account
Since 2024, Ecovacs Group has actively adjusted its product strategy and focused on core business categories. On the one hand, in the advantageous mid - to - high - end products, the Ecovacs brand launched the flagship X8 series of constant - pressure live - water floor - washing robots, bringing the sweeping robot industry into the roller floor - washing era. The flagship product of the Tineco brand, the Tineco Art Station, addresses customer pain points, is equipped with the first - created "front - multi - layer capture 0 hair - entanglement" technology, and has achieved multi - functional upgrades such as the "disappearance" of water stains through technological optimization. On the other hand, based on the sinking of high - end product technologies, the group has also launched a number of innovative new products, effectively filling the product lines at various price points and driving the recovery of market share.
You know, in the current industry with serious homogenization, the upgrading of mid - to - high - end products requires disruptive technologies to create differentiated product functions to solve market pain points, which requires continuous R & D investment. Whether the R & D investment can be sustained depends on its ability to be transformed into performance. In addition to the great success of high - end products themselves, it also depends on the sales growth brought by the sinking of mature technologies to mid - and low - end products.
In short, R & D investment drives technological innovation, products are recognized by the market and bring sales growth, which is realized as revenue expansion and profit improvement, and then feeds back into a new round of R & D investment, thus forming a positive cycle. This complete link is the basis for Ecovacs Group to achieve long - term high - quality growth.
02. A Leap from Scale Expansion to Profit Barriers
From the perspective of profit, in 2024, Ecovacs Group achieved a net profit attributable to the parent company of 810 million yuan, a year - on - year increase of 31.7%. In Q1 of 2025, it further increased by 59.4%, corresponding to a net profit margin attributable to the parent company of 12.3%, a year - on - year increase of nearly 4 percentage points.
Overall, Ecovacs Group's profit side has been continuously recovering since the fourth quarter of last year. The profit growth rate is better than the revenue expansion, and there is an accelerating trend in 2025. Through profit breakdown, the improvement of profitability is mainly due to the improvement of gross profit margin and the marginal decrease of expense ratio.
First, let's look at the gross profit margin. In 2024, its gross profit margin was 46.5%, and it further increased to 49.7% in Q1 of 2025, a growth of 2.5 percentage points.
In the past two years, the cleaning home appliance industry has been deeply mired in the quagmire of price wars, and the profit levels of various companies have declined. Against this background, Ecovacs Group chose to "compete on value rather than price", driving the profitability to grow against the trend. Driven by such a strategy, Ecovacs Group has entered a new round of strong product cycle. With the stable recovery of the proportion of high - gross - profit products, it has ultimately driven the improvement of the comprehensive gross profit margin. This also shows its confidence in its own product technology and the support of its production and manufacturing capabilities from the side.
In addition to the consolidation of the high - end market, the entry of the high - gross - profit overseas market into the harvest period is also a major support for the improvement of its comprehensive gross profit margin. According to the financial report, last year, the operating revenues of the Ecovacs brand and the Tineco brand in the European market increased by 51.6% and 64.0% respectively.
Image source: Ecovacs WeChat official account
For the active expansion overseas, Ecovacs Group has its own set of strategies. Based on the flagship products verified in the domestic market, the company conducts localized innovation according to the differentiated needs of overseas users, which not only better meets the needs of overseas users but also effectively reduces the trial - and - error costs under blind innovation. For example, in response to the demand for lightweight products from small - sized households in Japan, the Tineco brand launched the more lightweight FLOOR ONE S7 Combo intelligent floor washer.
Benefiting from localized operations, during the "Black Friday" period in 2024, the total GMV of Tineco's e - commerce platforms exceeded 540 million yuan, and the total sales volume exceeded 230,000 units, leading the international market of floor washers. It ranked first in the market share in 9 major countries such as the United States, France, Germany, Canada, and Italy.
Then, let's look at the expense ratio. In 2024, the period expense ratio of Ecovacs Group was 39.2%, a decrease of 3.9 percentage points compared with 2023. Among them, the sales expense ratio and management expense ratio were 30.3% and 3.4% respectively, a decrease of 3.9 percentage points and 0.36 percentage points compared with 2023 respectively.
In the past few years, the company was in a critical investment period for seizing the cost - effective market and expanding overseas markets. Since 2024, with the increase in the volume of cost - effective products and overseas markets, under the scale effect, its sales expense ratio and management expense ratio have shown a marginal decrease, releasing more space for profit.
However, it is worth noting that while the sales and management expenses are showing a marginal decrease trend, the company's R & D expense ratio still maintains a steady expansion, which undoubtedly shows the company's emphasis on R & D innovation.
In addition, benefiting from the coordinated development of the two brands, Ecovacs Group fully integrates the high - quality supply chain resources and channel resources of the two brands, and effectively achieves internal coordination and cost reduction and efficiency improvement by reducing the cost of core components through centralized procurement and reusing cross - category R & D basic technology modules.
This forward - looking strategy not only ensures product quality and maintains brand tone but also has been widely recognized by the market. Recently, many enterprises in the industry have announced the construction of their own production lines, which is the best proof.
In summary, the net profit in Ecovacs Group's Q1 financial report in 2025 reached a new high for the company's Q1 in the past two years and a new high in the industry, which has attracted wide attention from the market.
The improvement of profitability fully reflects the market's recognition of its products. Especially in the current increasingly competitive industry, the strong competitive barriers built by the company based on its dual - brand strategy and global layout have promoted the simultaneous increase of brand premium and user stickiness, verifying its logic of sustainable high - quality growth.