Product and Service

Companies included in household robot sector in household equipment industry primarily design and build robots for home related work.


Demand for Product and Service

As our sales data indicates, the demand for home cleaning robot products has been very strong. Sales volume increased more than 20% annually in the past two years as a result of increase in consumers’ purchasing power and in marketing investment and promotion.

The Sector

Sector’s current, trend, causes behind trend, and future

Current and Trend

  • Generally, the demand for home robot products has been strong and companies have better performance in US market than international market.
  • Companies have benefited from products’ innovation and investment in consumers’ market and in R&D.


Causes behind the trend

Economy situation/consumers spending is the major factor influencing demand for robot products from individual consumers. The customers’ segment of home robot products has been the group who has benefited most from recent economy recovery and accumulation of wealth.

Industry Future

Supported by faster economy recovery, upward trend in demand in this sector may continue.


General Financial Performance of Companies In the Sector

While the fast increase in sales of home robots of this company seems to have been supported by large spending in marketing and aggressive promotion, the more than 20% annual growth in sales units since 2017 cannot be explained without support of strong demand from consumers. At the same time, shifting of product mix to higher margin products may mean that consumers would like to pay more for innovation of products, which may have been proved by continuingly increasing sales volume of its new products in the 2Q of 2018.

As a result of increasing demand for higher margin products, companies’ gross margin has been improved by about 400 basis points to about 50% in the past several years. It is the first time for this company’s gross margin in the past several years to catch up the increase in its average SG&A as percentage of sales, which increased by about 400 basis points during the same period. We thus see its operating margin to go back to about 9% in 2018, a 100 basis point increase compared with 2017 thanks to fast increase in sales. We see an increase in cash flow.

The typical average enterprise price/EBI (a) ratio is: 54(interest/EBI ratio of 0%) and stock price/sales ratio is 3.1.

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