The "trade-in" stimulus effect has weakened, and Vatti's profits have shrunk by over 30%.

``` After the "Trade-in" policy's stimulating effect weakened, the kitchen appliance market is entering a brutal stage of stock competition. On April 28, Vatti Co., Ltd. released a rather heavy 2025 report card: total revenue for the year was 5.648 billion yuan, down 11.36% year-on-year; net profit attributable to parent shareholders shrank sharply by 37.90% in the same period, recording only 301 million yuan. This is indeed the result of a weak market. In 2025, retail sales of all kitchen and bathroom categories fell 8.5% year-on-year. The overall industry demand is insufficient, significantly squeezing Vatti's growth and profit margins. None of Vatti's three core categories were spared. In 2025, the water heater business suffered the most, with revenue plunging 20.54% year-on-year; at the same time, its basic categories, range hoods and gas stoves, also fell by 11.32% and 3.07% respectively. All channels are under pressure. In 2025, online and offline channels generated 1.91 billion yuan and 2.749 billion yuan in revenue respectively, down 7.22% and 12.66% year-on-year. While overall revenue is under pressure, Vatti's gross profit margin has improved against the trend. In 2025, the offline channel gross margin reached 43.24%, an increase of 3.79% year-on-year, while the online gross margin slightly increased to 50.55%. This outlines the core logic of Vatti's current development. During the industry's winter period, Vatti no longer blindly pursues market share expansion but stabilizes its basic business through premiumization, using higher gross profit margins to offset the decline in sales. In the online channel, Vatti focuses on "creating blockbuster products and high-end breakthroughs"; in offline channels, it is guided by retail, driving up the proportion of mid-to-high-end product shipments and continuously optimizing the product structure. In 2026, Vatti will continue to adhere to its high-end positioning, aiming to strengthen the brand's sense of fashion and professionalism, and precisely penetrate younger demographic groups. From the first quarter, the downward trend has eased somewhat. In the first quarter of 2026, Vatti's revenue and net profit attributable to parent shareholders were 1.186 billion yuan and 109 million yuan respectively, down 5.86% and 4.88% year-on-year. Guolian Securities analyst Guan Quansen and others believe that although kitchen appliance demand may remain subdued in the future, the company’s current logic of structural upgrades is expected to continue, helping profitability return to a stable upward track. Overall, however, the early overdraft effect of policies such as "trade-in" is becoming apparent, and the industry can no longer rely on external subsidies to restore scale. As new demand slows, the competition logic in the kitchen appliance market is shifting completely from "incremental battle" to "stock competition", and the squeeze from prices, channels, and product structure will persist for a long time. Against this backdrop, Vatti is betting on premiumization and structural upgrades, essentially using "profit first" to hedge against "scale decline". This strategy can help stabilize profitability in the short term, but whether it can continue to be effective in a generally weak demand environment remains uncertain. Risk warning and disclaimer Markets are risky, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the individual investment objectives, financial situation, or needs of specific users. Users should consider whether any opinions, views, or conclusions in this article suit their particular situation. Investment based on this is at your own risk. ```