QAI · Why does Stone Technology’s price-for-volume strategy drag down net profit?

Wang Shengyu

Editor |

On March 20, Stone Technology’s stock price hit a new low in nearly a year, and the company’s total market value fell to 32.6 billion yuan. Its market value at the close of the first day of listing on the Science and Technology Innovation Board of the Shanghai Stock Exchange in 2020 was 33.3 billion yuan, and after more than six years, the market value of Stone Technology has fallen back to the starting point of listing.

Since 2026, Stone Technology’s stock price has fallen by as much as 17%, while the Shanghai Composite Index has fallen by only 0.3% in the same period. Looking at the extended cycle, the stock price of Stone Technology has seriously underperformed the market, and its stock price has fallen by more than 60% from the high of nearly 1,500 yuan in 2021, and the total market value has evaporated by more than 60 billion yuan compared with the highest market value of nearly 100 billion yuan.

However, in terms of performance, Stone Technology’s operating income still maintains a high growth rate, and the performance report shows that Stone Technology will achieve revenue of 18.616 billion yuan in 2025, a record high, and according to the latest report data of IDC cited in its announcement, Stone Technology’s intelligent sweeping robot ranks first in the world in terms of sales and sales share in the global market.

It is worth noting that despite the soaring operating income, the net profit of Stone Technology has declined sharply, in 2025, Stone Technology will achieve a net profit attributable to the parent company of 1.360 billion yuan, a year-on-year decrease of 31.19%, and a net profit of 1.087 billion yuan, a year-on-year decrease of 32.90%, which is slightly lower than the net profit of its listing year in 2020, and the net profit of Stone Technology in 2020 will achieve a net profit of 1.369 billion yuan, while the operating income of that year is only 4.530 billion yuan.

In the case of an increase in revenue of more than 10 billion, Stone Technology’s net profit has declined, falling into the dilemma of increasing revenue but not increasing profits. Stone Technology, once known as a “sweeper”, is currently valued at a price-earnings ratio of about 24 times in the secondary market, which is increasingly like a home appliance stock rather than a technology company. In the case of leading market share, why has Stone Technology fallen into the embarrassing situation of “the more you sell, the less profitable it is”? What kind of “crisis” does this cleaning appliance giant face?

The more you sell, the less profitable it is The net profit of Stone Technology disappears

In the first three quarters of 2025, Stone Technology achieved revenue of 12.066 billion yuan, a year-on-year increase of 72.22%, a net profit attributable to the parent company of 1.038 billion yuan, a year-on-year decrease of 29.51%, and a net profit of 835 million yuan, a year-on-year decrease of 29.63%.

Combined with the annual performance report, Stone Technology’s revenue in the fourth quarter of 2025 was 6.550 billion yuan, a year-on-year increase of 32.64%, the net profit attributable to the parent company was 322 million yuan, a year-on-year decrease of 36.16%, and the net profit attributable to the parent company was 252 million yuan, a year-on-year decrease of 41.99%, which shows that its revenue growth rate has slowed down year-on-year, and its net profit has further declined.

For the growth of revenue, Stone Technology said that in the domestic market, the intelligent sweeping robot business and floor scrubber business are driven by the national “trade-in” subsidy policy, and the company has further improved the product matrix and price matrix, promoting business growth. In overseas markets, we have improved the layout of all price segments of products, and achieved stable growth in overseas revenue through refined channel layout and active market strategies.

Whether in domestic or overseas markets, Stone Technology has mentioned improving the price matrix, which is its business strategy adjustment starting from the third quarter of 2024. In order to compete for market share, Stone Technology has adopted an aggressive “price for volume” strategy, on the one hand, it has reduced prices, and on the other hand, it has supplemented its product line of sweeping robots in the price range of 2,000 yuan to 3,000 yuan, and actively increased the shipment ratio of mid-range and entry-level sweeping robots.

However, the gross profit margin of low-end products is generally low, because the sweeping robot business is the core source of revenue of Stone Technology, which also directly lowers the gross profit margin of Stone Technology. According to the data, in 2023, the gross profit margin of Roborock Technology will be 53.93%, and its gross profit margin will be 50.14% in 2024, and by the end of the third quarter of 2025, the gross profit margin of Roborock Technology will drop to 43.73%, and in less than two years, the gross profit margin will fall by more than 10%, greatly compressing its profitability.

In the first three quarters of 2025, its sales expenses will be as high as 3.180 billion yuan, a year-on-year increase of 103.42%, far exceeding the revenue growth rate of 72.22%. The sales expense ratio climbed from 19.79% in 2023 to 26.35% at the end of the third quarter of 2025. This means that for every 100 yuan of revenue earned by the company, more than 26 yuan has to be reinvested in advertising, celebrity endorsements and channel laying, while only 8.6 yuan is retained in net profit.

In terms of new business, in order to find the second growth curve of performance, Stone Technology has laid out new categories such as washing machines and smart lawn mowers in recent years, but these businesses have not been able to contribute to profits. According to a research report released by Lu Ming, an analyst at Kaiyuan Securities, in 2025, Stone Technology’s washing machine business is expected to lose 5-600 million yuan, the floor scrubber business is expected to lose about 200 million yuan, and the lawn mower robot business is expected to lose about 100 million yuan, dragging down the net profit by about 8-900 million yuan, further lowering the net profit of Stone Technology.

It can be seen that the sharp decline in Stone Technology’s net profit in 2025 is not caused by a single factor, but the result of the superposition of multiple pressures of price for volume, a surge in sales expenses and new business losses. This profitability dilemma also reflects the increasingly fierce competition in the sweeping robot market.

The market value evaporated by more than 60 billion, and shareholders cashed out more than 10 billion

The founder of Stone Technology is Chang Jing, born in August 1982, graduated from South China University of Technology majoring in computer science, and has worked in Internet companies such as Automobile and Microsoft since 2006. In 2011, Changjing founded the software “Magic Map Genie” for mobile phone photo processing and sharing, taking the first step in entrepreneurship. The company was later acquired by Baidu, and he immediately joined Baidu as a senior manager.

In 2014, Changjing started his second entrepreneurial journey, focusing on the sweeping robot track, devoting himself to the hardware field, and establishing Stone Technology, with a registered capital of only 200,000 yuan at that time. Coincidentally, Xiaomi was laying out an ecological chain model, and Chang Jing and others quickly received investment from Xiaomi. As one of the important enterprises in the Xiaomi ecological chain model, in the years when Stone Technology started, Xiaomi provided it with a lot of resources and orders, and looking back, this was regarded by Changjing as the greatest luck at the beginning of the company’s establishment.

After rapid development in the early days, Stone Technology began to build its own brand and actively expand overseas markets, while promoting the increase in the volume of its own brand, while de-Xiaomi, and achieved a significant increase in revenue and profit. In February 2020, Stone Technology landed on the Science and Technology Innovation Board of the Shanghai Stock Exchange, with an issue price of 271.12 yuan per share, soaring 84.46% on the first day of listing, becoming the highest priced stock on the Science and Technology Innovation Board.

With the concept of the first share of sweeping robots, superimposed on the capital market’s preference for core assets at that time, the stock price of Stone Technology broke through the 1,000 yuan mark in one fell swoop only ten months after its listing, and in June 2021, the stock price once approached 1,500 yuan, with a maximum market value of nearly 100 billion, which was called “sweeping the floor” and “crazy stone” by investors.

As of March 20, the market value of Stone Technology was only 32.6 billion, and the market value of nearly 100 billion yuan at the peak has evaporated by more than 60 billion. The successive reductions of Changjing, the actual controller, and early investment institutions have further impacted the confidence of investors in the secondary market.

In June 2023, Changjing reduced his holdings by a total of 94,000 shares and cashed out 35.08 million yuan through centralized bidding. In September of the same year, Changjing continued to reduce his holdings by 1,312,400 shares and cashed out 392 million yuan. In June 2024, Changjing threw out an inquiry transfer plan with a transfer price of 376.88 yuan per share, transferring a total of 1.3158 million shares and cashing out 496 million yuan again.

After reducing its holdings and cashing out 923 million yuan, Stone Technology issued an announcement promising that Changjing would not reduce its holdings of the company’s shares within half a year. In June 2025, it announced again that Changjing promised not to reduce its holdings until June 22, 2026. According to the announcement of Stone Technology’s 2025 third quarter report, Changjing holds 54.3774 million shares of Stone Technology, accounting for 20.99% of the total share capital, and Changjing currently serves as the chairman and general manager of Stone Technology.

It is worth noting that in addition to Stone Technology, Changjing began to lay out car-making projects in 2021, although it publicly stated that car manufacturing is a personal investment, and the focus of the main business is still in Stone Technology, but car manufacturing is a “capital-intensive” industry that requires continuous huge investment. The market generally speculates that part of the funds from its reduction and cashing out may be used to support the development of Polar Stone Automobile, and at the same time, the management energy of Stone Technology has also been dispersed.

In addition to Changjing, as a member of the Xiaomi ecological chain enterprises in the early days, Stone Technology has received the blessing of star capital such as Shunwei Capital, Gaorong Capital, and Qiming Venture Capital, which have successively withdrawn from Stone Technology after the ban on shares is lifted, which can be described as making a lot of money.

On February 22, 2021, just one year after its listing, Stone Technology ushered in a large-scale shareholder reduction plan, and 10 shareholders planned to reduce their holdings through inquiry transfer, centralized bidding or block trading. The total number of shares to be reduced by centralized bidding or block trading shall not exceed 7,397,500 shares, and the total proportion of the number of shares to be reduced shall not exceed 11.10% of the company’s total share capital, and the market value of the reduced shares will exceed 7 billion yuan based on the stock price at that time.

Since its listing in 2020, early investors such as Changjing and “Xiaomi Department” Shunwei Capital have cashed out a total of more than 10 billion yuan through multiple rounds of holdings. At present, there is no trace of these early institutional investors among the top ten shareholders of Stone Technology.

Industry competition intensified, and the amount of Stone Technology’s inventory surged by 149%

After years of popularization and development, the cleaning appliance industry as a whole has been in a mature stage, not only in the domestic market, but also in the global market, Chinese sweeping robot brands have formed a situation of “group going to sea”. The industry concentration is getting higher and higher, the head players have taken away the vast majority of the share, while the price war, functional involution, and channel competition continue to intensify, and the market competition is becoming more and more fierce.

According to the IDC report, in the first three quarters of 2025, the global intelligent sweeping robot market shipped a total of 17.424 million units, a year-on-year increase of 18.7%. The Middle East and Europe markets became the core growth engines, leading the expansion of the industry. From the perspective of manufacturer share, with the complete exit of iRobot, the originator of the industry, Chinese manufacturers are the top five in global shipments. Among them, the cumulative shipments of Stone Technology reached 3.788 million units, ranking first in the industry with a market share of 21.7%. Ecovacs has a global market share of 14.1% and still maintains the first position in the Chinese market in terms of shipments.

In terms of other players, Dreame sweeping robots account for 12.4% of the global share and rank first in European market shipments in the first three quarters of 2025. Xiaomi still focuses on the mid-range cost-effective route in the intelligent sweeping robot market, accounting for 10% of the global market share, and the global shipment volume of Cloud Whale sweeping robot ranks among the top five.

At the same time, the market competition pattern has further changed, and drone giant DJI will strongly cross border into the sweeping robot market in August 2025, and with its technology accumulation and brand potential, it will rush to the sixth place in shipments in the Chinese market in the third quarter of 2025. Traditional home appliance giants Midea and Haier are also actively laying out the sweeping robot market, further intensifying industry competition.

It is worth noting that while the market size is expanding, the sweeping robot industry is still facing high inventory pressure, which brings multiple challenges to manufacturers’ inventory turnover, profit control and subsequent product layout.

According to the data, at the end of the third quarter of 2025, the inventory amount of Stone Technology hit a record high of 3.716 billion yuan, a surge of 149% from the inventory of 1.49 billion yuan at the beginning of 2025, much higher than its revenue growth rate, and Ecovacs’ inventory increased by 44% in the same period.

In the current competitive situation of “price for volume” and seizing market share, sweeping robot manufacturers must maintain a certain amount of spot capacity. But at the same time, the fierce price war and the changes of AI to the cleaning appliance industry require manufacturers to strictly control inventory to avoid huge price losses, which puts forward higher requirements for Stone Technology’s inventory management capabilities.

At present, Stone Technology is promoting the listing of Hong Kong stocks, and after the first prospectus submitted in June 2025 expired, the company has resubmitted the form on December 31, 2025, and the intention of financing blood replenishment is very urgent. In the process of promoting listing, Stone Technology is still facing multiple practical challenges such as profit pressure, intensified industry competition, and insufficient investor confidence.