Analyst: Optimistic about Beijing Roborock Technology (688169.SH) and other companies restructuring the smart home industry.

, and artificial intelligence technology is accelerating the development of the smart home industry towards fully integrated smart homes. The development of artificial intelligence technology has driven the innovation and upgrading of smart home products, providing consumers with more convenient and personalized user experiences. By 2024, the global smart home market is projected to reach $155.8 billion, with an annual compound growth rate of 21.52% between 2017 and 2024. The penetration rate is highest in the control and connectivity segment, with China's smart home appliance segment accounting for 81%, while the control and connectivity segment accounts for only 10%. This indicates that the smart home industry in China has hardware innovation and manufacturing advantages, but software integration and diffusion are relatively slower. In this context, on April 17, Caixin Securities released a research report stating that technology-based companies like Beijing Roborock Technology (688169.SH) are restructuring the smart home industry through a development path of "breakthrough products, deepening scenarios, and ecosystem building", which has led to a unique advantage compared to other players, with greater technological depth and self-developed and self-produced response speed. With the integration of artificial intelligence technology, the smart home industry is rapidly developing. The traditional definition of smart homes is based on residential platforms, utilizing technologies such as the Internet of Things, cloud computing, artificial intelligence, and machine learning to collect household environmental data through sensors and manage home facilities intelligently, with centralized management, remote control, interconnection, and autonomous learning functions. It automatically adjusts the operating status of home devices according to user needs and preset strategies, enhancing the safety, convenience, comfort, and aesthetics of home life. The integration of artificial intelligence technology is driving the rapid development of the smart home industry. With the development of artificial intelligence technology, the integration of artificial intelligence and digital assistants is driving innovation and upgrading of smart home products, providing consumers with more convenient and personalized user experiences, further catalyzing consumer demand. According to the "2024 Overseas Insight Research Report on Smart Homes," the global smart home market is expected to reach $155.8 billion by 2024, with an annual compound growth rate of 21.52% between 2017 and 2024, with revenues projected to increase to $175.5 billion by 2025. With technological support, the Chinese smart home market is in a period of accelerated growth. Thanks to the increase in disposable income per capita and the continuous pursuit of quality living, the demand for smart home products continues to grow, with an expanding variety of categories. China is in a period of rapid growth for smart homes, as projected in the 2023 China Smart Home Development White Paper, with the smart home market expected to reach 682.1 billion yuan by 2024, showing a significant increase in recent years. Players in the smart home industry are diverse, each with their own relative advantages. Currently, there are many players in the Chinese smart home market, which can be roughly divided into four categories: Traditional home appliance manufacturers, such as Midea Group Co., Ltd. and HAIER SMARTHOME, rely on downstream channel advantages and a wide range of product categories to build strong customer loyalty. Platform-based enterprises, such as Huawei and Xiaomi, have a high user base on the mobile end and an interconnected ecosystem, seizing opportunities and attracting more users due to their hardware and software advantages in upstream technology, providing whole-house smart solutions, emphasizing interconnected ecosystems, entering the market share from the front end of the home furnishing market. Specialized smart home manufacturers, such as Yingshi and Beijing Roborock Technology, with both hardware and software strength, gradually expanding from single-product businesses to multiple products. These players have strong innovation capabilities and can capture market demands in a timely manner through research and development. Internet technology companies, such as Baidu and Alibaba, have entered the smart home market through smart speakers, attracting partner manufacturers to join their smart home open platforms, forming an ecosystem. Beijing Roborock Technology's new products achieve further leaps in home cleaning products towards full intelligence. Among the many smart home industries, cleaning appliances have been one of the fastest-growing household appliance categories in China in recent years, with continuous technological and functional innovations driving rapid industry growth. In 2020, Chinese cleaning appliance manufacturers began to improve and innovate in response to a series of pain points in the navigation and obstacle avoidance technology of cleaning robots. For example, in terms of navigation and obstacle avoidance technology, domestic brands were the first to combine laser navigation and visual recognition, which can detect obstacles and avoid or clean them, greatly improving the accuracy of product navigation and obstacle avoidance. In terms of product features, through the cleaning robot's base station, a series of "self-cleaning" functions have been realized, significantly increasing the degree of product intelligence and substantially reducing the need for manual participation in household floor cleaning, leading to rapid increases in product sales and penetration rates. According to data from AVC Cloud, the market size of China's cleaning appliance market grew from 240 billion yuan in 2020 to 423 billion yuan in 2024, with a compound growth rate as high as 15.22%. Among them, floor scrubbers and cleaning robots, with functional innovations hitting user pain points and corresponding to Chinese floor cleaning habits, have continued to erode the market share of vacuum cleaners, becoming the largest segment in the cleaning appliance industry. The total share of these two segments increased from 44% in 2020 to 79% in 2024. According to Caixin Securities' research, the penetration rates of cleaning robots and floor scrubbers in China are only 5.5% and 3.1%, respectively, compared to the 13.5% penetration rate of vacuum cleaners, indicating a significant room for improvement. Caixin Securities believes that cleaning appliances are essential for Chinese consumers.Category, under the high frequency of family cleaning habits, Siasun Robot&Automation floor sweeping robot can effectively eliminate manual work. With the development of technology and improvement of product functions, the user experience of the product continues to improve. Coupled with the stimulus of current government subsidy policies on household appliances demand, both the floor sweeping robot and floor scrubber have the potential for rapid growth.At the same time, the supply side of cleaning appliances continues to exert efforts. Emerging products such as the window-cleaning Siasun Robot&Automation and the fabric cleaning machine are extending traditional floor cleaning into the three-dimensional field of whole-house cleaning, achieving good market performance. In 2024, the scale of the window-cleaning Siasun Robot&Automation is expected to increase by +36.10% to 1.14 billion yuan. Since the emergence of the full-site sweeping Siasun Robot&Automation in 2020, the sweeping Siasun Robot&Automation industry has entered a high-speed development track. With the assistance of intelligent large models, the future technological evolution path is towards embodied intelligent bodies that can adapt to scenes and make autonomous decisions. In the "self-cleaning" field, the sweeping Siasun Robot&Automation can automatically add and drain water and dry the brush during cleaning, greatly increasing the level of automation and intelligence. In response to the long-standing issue of foul odors in base stations, innovative automatic dust collection technology with internal circulation has been adopted, and the built-in dust bag can last 100 days without needing to empty the trash. In terms of cleaning power, due to the mostly circular design of the sweeping Siasun Robot&Automation, problems with cleaning corners are easily overcome by the precision stepper motors and variable distance systems. By maintaining the constant expansion of the mop tray, flexible stretching can achieve cleaning in close contact with floor corners and furniture bases. Furthermore, in order for the sweeping Siasun Robot&Automation to adapt to more household environments and reduce installation difficulties, the base station size is continuously reduced. In terms of navigation and obstacle avoidance technology, more and more products are integrating visual recognition technology on the basis of lidar, combining visual texture information and spatial information from lidar to improve the generalization ability for unknown objects and achieve autonomous decision-making in complex scenes. At the beginning of this year, Beijing Roborock Technology showcased a sweeping Siasun Robot&Automation equipped with intelligent large models and a five-axis folding robotic arm at the CES exhibition. Through online learning and model updates, new obstacles can be identified through software updates; the robotic arm can execute grabbing and categorizing items, achieving a breakthrough from two-dimensional ground cleaning to three-dimensional spatial control in household cleaning, further advancing from ordinary household cleaning products towards embodied intelligent bodies.