Investment Rating - The report maintains a "Strong Buy" rating for Hisense Home Appliances, with a target price of 33 yuan, corresponding to a 12x PE for 2025 [2][8]. Core Views - The company reported a revenue of 49.34 billion yuan for H1 2025, a year-on-year increase of 1.4%, and a net profit attributable to shareholders of 2.08 billion yuan, up 3.0% year-on-year. However, Q2 2025 saw a revenue decline of 2.6% year-on-year to 24.5 billion yuan and a net profit drop of 8.3% year-on-year to 0.95 billion yuan [2][8]. - The external sales continue to grow, with overseas revenue increasing by 12.3% year-on-year, while domestic revenue slightly decreased by 0.3% [8]. - The air conditioning segment reported a revenue of 23.69 billion yuan in H1 2025, up 4.1% year-on-year, although central air conditioning faced a decline of 6.0% due to a weak real estate market [8]. - The washing machine business within the refrigeration and washing segment saw a significant revenue increase of 37.6% year-on-year, contributing positively to overall growth [8]. - The company is expected to recover growth in the coming quarters due to favorable weather conditions and government subsidies, despite facing high base pressure in Q2 [8]. Financial Summary - For 2024A, the main revenue is projected at 92.746 billion yuan, with a growth rate of 8.3%. The net profit attributable to shareholders is expected to be 3.348 billion yuan, with a growth rate of 18.0% [4][9]. - The earnings per share (EPS) for 2025E is adjusted to 2.68 yuan, with corresponding PE ratios of 10, 9, and 8 for 2025, 2026, and 2027 respectively [8][9]. - The company’s total assets are projected to grow from 69.702 billion yuan in 2024A to 84.298 billion yuan in 2027E, indicating a steady increase in financial strength [9].

Core Insights - Hisense Home Appliances released its first half-year report for the home appliance industry, showing revenue of 49.34 billion yuan and a net profit of 2.077 billion yuan, with year-on-year growth of 1.44% and 3.01% respectively [1] Financial Performance - Total revenue for the reporting period was 49.34 billion yuan, compared to 48.64 billion yuan in the same period last year, reflecting a growth of 1.44% [1] - Revenue breakdown by industry shows manufacturing at 45.70 billion yuan (92.62% of total revenue), up 4.98% from 43.53 billion yuan [1] - Revenue by product indicates air conditioning sales at 23.69 billion yuan (48.02% of total revenue), an increase of 4.07%, while washing machines and refrigerators generated 15.39 billion yuan (31.20%), up 4.76% [1] Regional Performance - Domestic revenue was 25.25 billion yuan (51.17% of total), slightly down by 0.31% from the previous year, while overseas revenue reached 20.45 billion yuan (41.45%), marking a growth of 12.34% [2] Management Changes - The company announced the resignation of President Hu Jianrong and Director Zhu Dan due to personal reasons and work adjustments, respectively [2] - Chairman Gao Yuling will take over as President, while Yin Bitong, a former executive from Midea Group, has been appointed as a representative director [2][3] Strategic Developments - Yin Bitong's entry into the board reflects Hisense's emphasis on leveraging his experience from Midea Group to enhance its operations [4] - Hisense and Midea Group signed a strategic cooperation agreement in May, focusing on AI applications and advanced manufacturing [4] Business Challenges - In the second quarter, Hisense's revenue was 24.5 billion yuan, down 2.6% year-on-year, with a net profit of 949 million yuan, down 8.25% [5][7] - The air conditioning business generated 23.7 billion yuan in revenue, up 4.07%, while the washing and refrigeration segment saw a revenue of 15.4 billion yuan, also up 4.76% [7] - The domestic central air conditioning market capacity declined by 15.9%, while the retail sales of home air conditioners increased by 24.9% [7]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative performance increase of over 15% against the benchmark index in the next 6 to 12 months [13]. Core Views - The company's performance in the first half of 2025 showed slight pressure, with a revenue of 49.3 billion (up 1.4%) and a net profit of 2.077 billion (up 3%) [5]. - The second quarter of 2025 saw a revenue decline of 3% to 24.5 billion, with a net profit decrease of 8% to 0.95 billion, primarily due to pressures in the central air conditioning and three electrical appliances sectors [5][6]. - The company is focusing on enhancing its high-end brand positioning and reducing reliance on the weak renovation market by strengthening its product offerings in the construction and home decoration sectors [6]. Financial Performance Summary - The company's projected revenue for 2023 is 85.6 billion, with a year-on-year growth rate of 15%. For 2024, revenue is expected to reach 92.746 billion, growing by 8% [3]. - The net profit attributable to the parent company is forecasted to be 2.837 billion in 2023, with a significant growth of 98% year-on-year. By 2024, it is expected to rise to 3.348 billion, an 18% increase [3]. - Earnings per share (EPS) are projected to increase from 2.05 in 2023 to 2.42 in 2024, reflecting a positive growth trajectory [3]. Market and Competitive Landscape - The company is experiencing a mixed performance in its product segments, with air conditioning sales declining domestically while exports are improving. The overall market competition is intensifying, particularly in the domestic air conditioning sector [8]. - The company is expected to see a recovery in its ice washing segment, driven by structural upgrades and efficiency improvements in its Monterrey factory [8]. - The long-term growth of the company is anticipated to rely on improving profit margins in the white goods sector, which is currently at a low level of 3-4% [9]. Management and Strategic Changes - The company plans to change two board members, bringing in individuals with international marketing and air conditioning backgrounds to enhance overseas expansion and address domestic market weaknesses [9].

Core Viewpoint - Hisense Home Appliances is undergoing significant management changes, which may indicate a shift in company strategy amidst slowing growth in revenue and profit margins [2][4][5]. Management Changes - Hu Jianyong is no longer serving as executive director, president, or member of the strategic and ESG committees. Gao Yuling has been appointed as the new president, while Zhu Dan has stepped down from his roles [2]. - Yin Bitong, former vice president of Midea Group, has been elected as a representative director of the board, indicating a focus on transformation and innovation [4][11]. - Fang Xueyu has been nominated as an executive director, pending shareholder approval, and has a strong background in international marketing [2][12]. Financial Performance - In the first half of 2025, Hisense Home Appliances reported revenue of 49.34 billion yuan, a year-on-year increase of 1.44%, and a net profit of 2.08 billion yuan, up 3.01% [5][6]. - The company's revenue growth has slowed compared to previous years, with 2024 showing a revenue increase of 8.35% and a net profit increase of 17.99% [7]. - The gross profit margin has slightly decreased to 22.66%, while cash flow from operating activities has significantly improved, rising by 153.43% to 5.32 billion yuan [7][8]. Market Dynamics - The domestic central air conditioning market has contracted by 15.9%, impacting Hisense's revenue, which saw a slight decline of 0.06% in domestic income [7][10]. - Hisense's largest business segment, HVAC, has grown by 4.07% to 23.69 billion yuan, now accounting for 48.02% of total revenue [8][9]. - Internationally, Hisense's revenue has increased by 12.34%, with significant growth in Europe and the Americas, driven by high demand for energy-efficient and smart appliances [10][12]. Strategic Focus - The management changes and financial performance suggest a potential shift in strategy to enhance growth and market presence, particularly in international markets [4][11]. - Hisense aims to leverage its partnerships and marketing strategies, such as its sponsorship of major sports events, to strengthen its brand and product offerings in high-end markets [12].

Core Viewpoint - The company's 1H25 performance slightly underperformed expectations due to currency fluctuations, personnel adjustments in the three electrical businesses, and ongoing negative impacts from the real estate sector on air conditioning sales [1][2]. Financial Performance - 1H25 revenue reached 49.34 billion yuan, a year-on-year increase of 1.4%, while net profit attributable to shareholders was 2.077 billion yuan, up 3.0% year-on-year [1]. - For 2Q25, revenue was 24.502 billion yuan, down 2.6% year-on-year, and net profit was 949 million yuan, a decrease of 8.3% year-on-year [1]. - The company's performance was pressured by exchange rate fluctuations, intensified competition in the air conditioning market, and a decline in domestic demand [1][2]. Market Trends - Domestic demand for air conditioning is weak, with intensified competition leading to a decline in retail prices; air conditioning retail sales saw a year-on-year increase of 26% in 4Q24 but a decrease of 2% in 1Q25 [1][2]. - The air conditioning market is facing increased competition, particularly from Xiaomi, which has accelerated its market presence [1]. - Hisense's air conditioning products, classified as second-tier assets, have been negatively impacted by the competitive environment, with online retail market share dropping by 0.5 percentage points to 4.2% in 2Q25 [1][2]. Business Segment Performance - The central air conditioning market in China contracted by 15.9% year-on-year in 1H25, with the home decoration retail market down 18% [2]. - Hisense's revenue from the air conditioning segment fell by 6% in 1H25, with a profit margin of 17.5%, an increase of 0.2 percentage points year-on-year [2]. - The three electrical businesses faced a significant decline in exchange income due to currency fluctuations, impacting profits by approximately 200 million yuan [2]. Export and Profitability - The export of white goods has slowed down, with a year-on-year increase of 8% in 1Q25 followed by a decrease of 7% in 2Q25 [2]. - Despite the slowdown, the operating profit margin for the washing machine business improved by 0.8 percentage points to 4.2% in 1H25 due to reduced losses from the Monterrey factory and improved sales structure [2]. Profit Forecast and Valuation - The company has slightly adjusted its net profit forecasts for 2025 and 2026 down by 2.5% and 4.8% to 3.742 billion yuan and 4.197 billion yuan, respectively [2]. - The current stock price corresponds to a P/E ratio of 10.1x for A shares and 8.3x for H shares for 2025E [2]. - The target price remains unchanged at 36.5 yuan for A shares and 32.5 HKD for H shares, indicating an upside potential of 34.2% and 34.6%, respectively [2].

Core Viewpoint - The company reported its 2025 mid-year results, showing modest growth in revenue and net profit, but a decline in Q2 performance, primarily due to weak domestic sales [1][2]. Financial Performance - For H1 2025, the company achieved revenue of 49.34 billion yuan, a year-on-year increase of 1.44%, and a net profit attributable to shareholders of 2.08 billion yuan, up 3.01% [1]. - In Q2 2025, revenue was 24.50 billion yuan, down 2.60% year-on-year, with net profit of 949 million yuan, a decline of 8.25% [1]. - The company's gross margin for H1 2025 improved by 0.69 percentage points to 21.48%, with variations across product categories [2]. Segment Analysis - In terms of product categories, the HVAC business grew by 4.07%, while the ice and washing machine segment saw a 4.76% increase, with domestic washing machine revenue rising significantly by 37.58% [1]. - Regionally, domestic business saw a slight decline of 0.31%, while overseas business grew by 12.34%, with notable increases in Europe (22.7%) and the Americas (26.2%) [1]. Operational Efficiency - The company’s operating profit for H1 2025 was 2.63 billion yuan, reflecting a year-on-year increase of 9.67%, with an operating profit margin of 5.32%, up 0.40 percentage points [2]. - In Q2 2025, the operating profit margin improved to 4.59%, despite a slight decline in operating profit to 1.12 billion yuan [3]. Cash Flow and Future Outlook - The net cash flow from operating activities increased by 153.43% year-on-year for H1 2025, indicating significant improvement in operational quality [3]. - The company aims to enhance efficiency through brand synergy and supply chain optimization, with expectations for a return to higher growth rates in revenue and profit from 2025 to 2027 [3].

Group 1 - The core viewpoint of the report is that Haier Smart Home (000921.SZ) is given a "buy" rating by Open Source Securities due to significant revenue differentiation between domestic and international sales, with the central air conditioning business under pressure [2] - The report highlights an expected improvement in gross margin by Q2 2025, while maintaining stable period expense ratios [2] Group 2 - The report identifies risks such as intensified competition in domestic sales, risks related to raw material prices, and potential underperformance in overseas brand development [2]

Investment Rating - The investment rating for Hisense Home Appliances is "Outperform the Market" [7]. Core Views - The company showed slight pressure in Q2 2025, but overall performance remained stable with H1 revenue of 49.34 billion (+1.4%) and net profit of 2.08 billion (+3.0%) [2]. - The air conditioning business faced challenges, impacting Q2 results, but the overall growth in H1 indicates resilience [2]. - The company is expected to maintain profitability in its central air conditioning segment while facing price competition in the home air conditioning market [2][3]. Revenue and Profitability - In H1 2025, the revenue from HVAC (Heating, Ventilation, and Air Conditioning) grew by 4.1% to 23.69 billion, with a decline in Hisense Hitachi revenue by 6.0% to 10.66 billion [2]. - The ice washing segment saw a revenue increase of 4.8% to 15.39 billion, with an operating profit margin improvement of 0.8 percentage points to 4.2% [3]. - The three electric segments (automotive compressors and thermal management) reported a revenue growth of 3% in H1, with new orders contributing to future revenue stability [3]. Sales Performance - Domestic sales in H1 2025 decreased by 0.3% to 25.25 billion, primarily due to the impact of central air conditioning, while overseas sales increased by 12.3% to 20.45 billion [3]. - Significant growth was observed in various regions, with Europe up by 22.7%, the Americas by 26.2%, and the Middle East and Africa by 22.8% [3]. Margin and Cost Analysis - The gross margin for H1 improved by 0.7 percentage points to 21.5%, with Q2 gross margin also up by 1.1 percentage points to 21.5% [4]. - Increased expenses in sales, management, R&D, and finance were noted, with Q2 expense ratios rising by 0.3 percentage points across various categories [4]. Profit Forecast and Valuation - The profit forecast has been adjusted downwards, with expected net profits for 2025-2027 at 3.55 billion, 3.90 billion, and 4.27 billion, reflecting a year-on-year growth of 6.1%, 9.9%, and 9.5% respectively [4][5]. - The corresponding price-to-earnings ratios are projected at 10.6, 9.7, and 8.8 for the respective years [4].

Group 1: Market Overview - The home appliance market is expected to show resilient growth in the first half of 2025, driven by the trade-in policy, although significant differentiation among industry players is evident [1][2] - The color TV market is experiencing a steady recovery, with both volume and revenue growth in the first half of 2025 [2] Group 2: Company Performance - Sichuan Changhong's net profit, excluding non-recurring gains, is expected to decline year-on-year, while the company anticipates a net profit of 4.39 billion to 5.71 billion yuan, an increase of 56.53% to 103.59% due to significant non-recurring gains [2][3] - Skyworth Group expects a nearly 50% decline in after-tax net profit, primarily due to the ongoing downturn in the real estate market and sluggish sales [3] - Konka Group forecasts a narrowed loss, with a net profit ranging from -500 million to -360 million yuan, despite a year-on-year increase of 54.03% to 66.90% in net profit [3] Group 3: Sector-Specific Insights - The kitchen appliance sector is heavily impacted by the real estate market and export policies, with Supor experiencing revenue growth without profit increase, and major players like Liren Technology and Shuaifeng Electric facing significant profit declines [1][5] - TCL Technology expects revenue between 82.6 billion to 90.6 billion yuan, with a net profit of 1.8 billion to 2 billion yuan, driven by strong growth in its semiconductor display business [2] - The air conditioning, refrigerator, and washing machine markets are undergoing deep adjustments, with Hisense Home Appliances reporting a slight revenue increase of 1.44% to 49.34 billion yuan and a net profit increase of 3.01% [5][6] Group 4: Emerging Trends - XGIMI Technology anticipates a revenue of 1.626 billion yuan, a year-on-year increase of 1.63%, and a net profit of 88.66 million yuan, reflecting a significant growth of 2062.33% [4] - The small appliance sector remains sluggish, with Supor's revenue increasing by 4.68% to 11.478 billion yuan, but net profit declining slightly by 0.07% [6][7] - Companies like Beiding and Aishida are showing signs of recovery, with Beiding's revenue growing by 34.05% to 430 million yuan and net profit increasing by 74.92% [7]

Investment Rating - The report maintains a "Strong Buy" rating for Hisense Home Appliances [3] Core Views - The company is currently facing operational pressure but is expected to see a turnaround in its performance. The revenue for H1 2025 was 49.3 billion yuan, a year-on-year increase of 1%, while the net profit attributable to shareholders was 2.08 billion yuan, up 3% year-on-year. However, Q2 2025 saw a decline in revenue by 3% and a net profit decrease of 8% [1][2] Financial Data and Valuation - Projected total revenue for 2023 is 85.6 billion yuan, with a year-on-year growth of 15%. This is expected to grow to 99.6 billion yuan by 2025, with a growth rate of 7% [2][14] - The net profit attributable to shareholders is projected to reach 3.68 billion yuan in 2025, reflecting a 10% increase from the previous year [2][14] - Earnings per share (EPS) is expected to be 2.66 yuan in 2025, with a price-to-earnings (PE) ratio of 10.2 [2][14] - The company has a return on equity (ROE) of 21.3% and a debt-to-asset ratio of 73.9% [3] Product Performance - In Q2 2025, the air conditioning segment saw a year-on-year increase in domestic and foreign sales of 6% and 17%, respectively. However, both segments experienced negative growth in Q2 due to industry price wars and high base effects from the previous year [6] - The refrigerator segment reported a 4% increase in domestic sales and a 2% increase in foreign sales, with improved profitability in foreign sales due to enhanced brand strength [6] - The central air conditioning segment experienced a revenue decline of 6% in H1 2025, attributed to a sluggish real estate market, but maintains strong brand power in the renovation market [6] Investment Outlook - The report suggests that the domestic consumption support policies will positively impact the company's performance, with a strong growth outlook for 2025-2027. The projected net profits for these years are 3.7 billion yuan, 4.2 billion yuan, and 4.9 billion yuan, respectively, with corresponding growth rates of 10%, 15%, and 15% [6][2]