Summary of Hisense Home Appliances Q1 2025 Earnings Call Company Overview - **Company**: Hisense Home Appliances - **Date**: Q1 2025 Earnings Call Key Points Financial Performance - Q1 2025 revenue reached 197.81 billion CNY, a year-on-year increase of 14.89% [2] - Net profit attributable to shareholders was 11.27 billion CNY, up 14.89% year-on-year [3] - Non-recurring net profit was 10.07 billion CNY, reflecting a 20% increase year-on-year [2][3] - Operating cash flow decreased year-on-year, primarily due to currency fluctuations and reduced revenue from the three-electric business [2][8] Business Segments - **Central Air Conditioning**: Overall growth with a good performance in the ToC segment; however, the construction sector saw a decline [2][9] - **Home Air Conditioning**: External sales growth exceeded 40%, with Europe accounting for over 45% of revenue [2][10] - **Washing and Refrigeration**: External sales showed double-digit growth, while internal sales remained stable [6][10] - **Three Electric Business**: Slight decline in revenue [6] Profitability and Margins - Overall gross margin slightly decreased, but external sales improved margins due to lower marketing costs [6][11] - Central air conditioning net margin exceeded 17%, benefiting from improved gross margins and optimized expense ratios [11][12] - The company aims for single-digit revenue growth while maintaining stable profit margins throughout the year [12] Market Dynamics - External sales growth is expected to continue, with a focus on emerging markets [21][22] - The company is cautious about potential slowdowns in external sales growth, particularly in mature markets [10] - The competitive landscape is intensifying, especially with price competition affecting both online and offline markets [33][34] Strategic Initiatives - The company is launching new products, such as a three-tub washing machine and a new air conditioning model, to enhance market competitiveness [15][31] - Hisense is focusing on brand differentiation, particularly with the repositioning of the Kelon brand to target younger consumers [15][17] - Efforts to penetrate emerging markets include establishing local sales networks and adapting successful domestic marketing strategies [23][26] Risks and Challenges - Currency fluctuations, particularly the yen, have impacted cash flow [8] - The company faces challenges from increased competition, particularly from brands like Xiaomi in the air conditioning sector [31][32] - The impact of high tariffs in the U.S. is minimal, as the company has diversified its production and sales across various regions [25][30] Future Outlook - The company expects gradual improvement in cash flow and performance in the second quarter [9] - Continued focus on innovation and market expansion is anticipated to drive growth in both domestic and international markets [15][21] Additional Insights - The asset-liability ratio increased to 71.23%, influenced by acquisitions and special dividends [13][14] - The company maintains a strong liquidity position, with sufficient cash equivalents to cover short-term liabilities [14] This summary encapsulates the key insights from Hisense Home Appliances' Q1 2025 earnings call, highlighting financial performance, market dynamics, strategic initiatives, and future outlook.

Investment Rating - The report maintains an "Outperform" rating for the company with a target price of RMB 36.50 for A-shares and HKD 32.50 for H-shares [1]. Core Views - The company's Q1 2025 performance met expectations, with revenue of RMB 24.838 billion, a year-on-year increase of 5.76%, and a net profit attributable to the parent company of RMB 1.127 billion, up 14.89% year-on-year [4][8]. - The report highlights the improvement in profitability driven by strict cost control and a favorable sales structure, achieving a net profit margin of 4.5% in Q1 2025, an increase of 0.36 percentage points year-on-year [7][8]. Financial Performance Summary - **Revenue and Profit Growth**: - Revenue for 2023 was RMB 85.6 billion, projected to grow to RMB 99.6 billion in 2025, reflecting a growth rate of 7.4% [3]. - Net profit attributable to the parent company was RMB 2.837 billion in 2023, expected to reach RMB 3.839 billion in 2025, with a growth rate of 14.7% [3]. - **Profitability Metrics**: - The gross margin for Q1 2025 was 21.4%, with a slight year-on-year increase of 0.3 percentage points [7]. - The report indicates a projected P/E ratio of 9.9x for 2025, suggesting a favorable valuation compared to industry peers [8]. - **Cash Flow and Dividends**: - Operating cash flow for Q1 2025 was RMB 65.08 million, a decrease of 58% year-on-year, attributed to currency fluctuations and revenue decline [7]. - The company plans to increase dividends, with projected dividends per share of RMB 1.41 in 2025, yielding a dividend rate of 5.2% [3]. Market Trends and Competitive Position - **Export Growth**: - The company experienced a strong growth in exports, with a 12.5% increase in appliance exports in Q1 2025, particularly in air conditioners and refrigerators [5]. - **Domestic Market Dynamics**: - The domestic market showed mixed results, with a slight decline in retail sales for air conditioners and refrigerators, while washing machines saw a 4.8% increase [6]. - The competitive landscape is intensifying, particularly in the online segment, with increased market share from competitors like Xiaomi [6]. - **Strategic Initiatives**: - The company is focusing on product differentiation and cost efficiency to maintain its competitive edge in a challenging market environment [6][7].

Group 1 - The top three companies with the highest short positions are WuXi AppTec (02359), Ganfeng Lithium (01772), and Vanke Enterprises (02202), with short ratios of 15.63%, 14.23%, and 13.24% respectively [1][2] - The company with the largest increase in short positions is China Ruifeng (00136), which saw an increase of 2.52%, followed by Vanke Enterprises (02202) with an increase of 1.49%, and Rongchang Biologics (09995) with an increase of 1.18% [1][2] - The companies with the largest decrease in short positions include Zai Ding Pharmaceuticals (09688) with a decrease of 1.31%, Midea Group (00300) with a decrease of 0.80%, and Kanglong Chemical (03759) with a decrease of 0.76% [1][3] Group 2 - The latest short position data shows that the short ratio for WuXi AppTec decreased from 6168.69 million shares to 6050.95 million shares, while Ganfeng Lithium decreased from 5893.42 million shares to 5743.15 million shares [2] - The short ratio for Vanke Enterprises increased from 259 million shares to 292 million shares, indicating a growing bearish sentiment [2] - Other notable companies with significant changes in short positions include ZTE Corporation (00763) and Brilliance China Automotive (01114), with short ratios of 12.54% and 12.18% respectively [2]

Financial Performance - In 2024, Hisense achieved a revenue of RMB 92.746 billion, representing a year-on-year growth of 8.35%[8] - The net profit attributable to shareholders reached RMB 3.348 billion, with a growth rate of 17.99%[8] - The compound annual growth rate (CAGR) for revenue over the past decade was 16%, while the CAGR for net profit attributable to shareholders was 21%[8] - Hisense has increased its dividend payout ratio from 30% to 50% of net profit, with a 95.9% year-on-year increase in dividends per share for 2023[15] - The company has cumulatively distributed approximately 5.05 billion yuan in dividends over the past ten years[15] - The company's cash flow from operating activities decreased by 51.64% year-on-year, amounting to approximately RMB 5.13 billion[64] - The weighted average return on equity is expected to rise to 23.27%, an increase of 0.63 percentage points from the previous year[64] - Hisense's total assets at the end of 2024 are projected to be approximately RMB 69.70 billion, a 5.69% increase from the end of 2023[64] - Total operating revenue for 2024 reached RMB 92.75 billion, an increase of 8.35% compared to RMB 85.60 billion in 2023[70] - Net profit attributable to shareholders for Q1 2024 was RMB 981.25 million, while Q4 2023 saw a decline to RMB 554.89 million[66] Market Expansion and Sales Growth - Hisense's overseas revenue exceeded RMB 35.6 billion, marking a year-on-year increase of 28%[12] - The market share of Hisense refrigerators in Europe reached 10.3%, while in South Africa it surpassed 34%[12] - The high-end product series, "Brilliant Series," saw a year-on-year growth of 52%[10] - The company plans to achieve peak carbon emissions by 2026 and carbon neutrality by 2050, as stated in its 2024 carbon neutrality white paper[14] - The overall market capacity for central air conditioning is expected to decline by 12.5% in 2024, influenced by a decrease in large public construction projects[17] - The domestic air conditioning market is projected to see a retail volume decline of 1.7% and a retail value decrease of 2.1% in 2024[18] - The refrigerator market is anticipated to grow by 4.9% in retail volume and 7.6% in retail value in 2024, driven by national subsidy policies[19] - The global automotive sales are expected to reach 89 million units in 2024, with a 24.4% increase in new energy vehicle sales[22] - In 2024, the penetration rate of smart air conditioners in the offline market reached 94.3%, an increase of 4.2%, while smart refrigerators reached 57.6%, an increase of 10.5%[23] - The export volume of cold products is expected to grow by 20% year-on-year in 2024, with air conditioning exports increasing by 28% and washing machine exports by 17%[24] Product Innovation and Technology - The company launched over 400 new technological achievements in 2024, enhancing its product innovation capabilities[9] - The "AI Air Butler" service for air quality management achieved the highest sales and revenue in the industry[10] - Hisense's new air conditioning products, including the Brilliant C3 series, are expected to lead the industry in both sales volume and revenue in 2024, with the Brilliant 72C310 dominating the fresh air cabinet segment[34] - The new M3 series solution can operate in extreme temperatures ranging from -30 to 58 degrees Celsius, providing stability in complex environments[30] - The smart building business experienced a growth rate of 22.5%, reflecting the company's ability to replace manual control with intelligent algorithms[31] - The company's new wind indoor unit meets ultra-energy-saving and high static pressure fresh air demands, showcasing innovation in the heat pump fresh air business[31] - Hisense's vacuum preservation technology has led to a 1.6 percentage point increase in high-end market share for its refrigerators in 2024[40] - The AI air management system can automatically adjust temperature and air quality based on user commands and environmental conditions[49] - The AI washing and care system can respond to specific user needs, such as removing pet hair or de-wrinkling suits, with tailored washing programs[50] - The AI food management system optimizes food preservation and cooking processes, enhancing user experience with smart features[51] Corporate Governance and Management - The company has established 22 leadership principles to improve strategic execution and organizational leadership among its management team[101] - The board consists of nine members, including six executive directors and three independent non-executive directors[124] - The company has established five specialized committees: Compensation and Assessment Committee, Nomination Committee, Strategy Committee, Audit Committee, and ESG Committee, with defined work guidelines[134] - The board has adopted a diversity policy, currently including one female director, Gao Yuling, who was appointed as an executive director on January 19, 2022, and as chairperson on November 21, 2024[126] - The board held 14 meetings in 2024, with a 100% attendance rate from all directors[128] - The company has implemented a system to ensure timely disclosure of interests and potential conflicts of interest by directors[128] - The company has committed to regular reviews of its corporate governance policies and compliance with relevant laws and regulations[131] - The independent non-executive directors' terms are set to expire on June 23, 2027[132] - The company has engaged Shinewing Certified Public Accountants to conduct independent audits of its internal control and risk management systems, with audit fees of approximately RMB 2.1 million for financial reporting and RMB 900,000 for internal control[185] Sustainability and Environmental Initiatives - Hisense has initiated a digital transformation, achieving a 37.59% reduction in material numbers and a 25.8% year-on-year decrease in order fulfillment cycle[13] - The company aims for a 10% improvement in manufacturing costs per unit by 2024 and a 14.9% increase in output per hour[13] - Hisense's Qingdao factory has been recognized as a global "lighthouse factory," marking a significant achievement in green manufacturing[14] - The company has achieved a 36% improvement in energy efficiency through systematic technological innovation in home air conditioning, establishing a comprehensive ecosystem covering product development and industry standards[94] - In the refrigerator segment, the company has reached a 30% increase in overall energy efficiency, meeting European A-level standards, while achieving a 14.2% reduction in carbon footprint through the use of recycled materials[95] - Hisense is focused on building a green and low-carbon transformation, implementing carbon neutrality strategies and improving ESG risk management mechanisms[108] Risks and Challenges - The company faces risks from macroeconomic fluctuations, rising costs, exchange rate volatility, and trade protectionism that could impact its operational performance[111]

Financial Performance - The company's revenue for Q1 2025 was ¥24,838,267,923.53, representing a 5.76% increase compared to ¥23,486,119,294.48 in the same period last year[5]. - Net profit attributable to shareholders was ¥1,127,395,765.82, up 14.89% from ¥981,246,783.99 year-on-year[5]. - The net profit after deducting non-recurring gains and losses was ¥1,007,755,232.51, reflecting a 20.27% increase from ¥837,889,225.17 in the previous year[5]. - Total operating revenue for the current period reached ¥24,838,267,923.53, an increase of 5.76% compared to ¥23,486,119,294.48 in the previous period[21]. - Net profit for the current period was ¥1,634,181,849.36, compared to ¥1,537,455,169.86 in the previous period, representing a growth of 6.31%[22]. - Basic earnings per share increased to ¥0.83 from ¥0.72, representing a growth of 15.28%[22]. Assets and Liabilities - The company's total assets increased by 4.64% to ¥72,935,577,259.81 from ¥69,701,939,817.33 at the end of the previous year[5]. - The company's total assets increased to ¥72,935,577,259.81 from ¥69,701,939,817.33, marking a growth of 3.20%[19]. - The total liabilities rose to ¥51,952,805,509.16, up from ¥50,327,415,106.20, indicating an increase of 3.22%[19]. - The equity attributable to shareholders of the parent company increased to ¥16,564,755,844.17 from ¥15,455,626,606.63, a growth of 7.15%[19]. Cash Flow - The net cash flow from operating activities was ¥65,075,820.08, down 58.30% from ¥156,049,168.70 in the same period last year[5]. - Operating cash inflow for the current period reached ¥20,551,636,304.13, an increase of 11.1% from ¥18,519,925,149.28 in the previous period[23]. - Cash inflow from investment activities totaled ¥9,485,967,241.79, up 21.8% from ¥7,796,536,903.29 in the previous period[23]. - Cash inflow from financing activities amounted to ¥1,273,215,974.19, slightly down from ¥1,320,262,031.56 in the previous period[24]. - The ending balance of cash and cash equivalents was ¥2,318,304,562.85, down from ¥3,113,769,261.78 in the previous period[24]. Investments and Expenses - Investment income increased by 39.60% to ¥236,083,008.03, compared to ¥169,117,662.26 in the previous year[10]. - Research and development expenses for the current period were ¥824,235,861.44, compared to ¥774,184,218.46 in the previous period, reflecting a rise of 6.46%[21]. - Cash paid for the purchase of fixed assets increased by 49.48% to ¥374,294,311.61, up from ¥250,389,427.74 in the previous year[10]. - Cash paid for purchasing goods and services was ¥14,344,138,537.83, an increase of 14.4% from ¥12,535,385,487.35 in the previous period[23]. Shareholder Information - Qingdao Hisense Air Conditioning Co., Ltd. holds 37.28% of shares, totaling 516,758,670 shares[13]. - Hong Kong Central Clearing (Agent) Co., Ltd. holds 33.11% of shares, totaling 458,962,527 shares[13]. - The company has no significant changes in the top 10 shareholders' participation in margin financing and securities lending[15]. Other Information - The company reported a significant increase in financial liabilities, with trading financial liabilities rising by 540.12% to ¥22,742,352.87 due to fluctuations in forward exchange rates[10]. - The company recorded a 63.01% decrease in other operating income, amounting to ¥28,589,505.45, compared to ¥77,287,462.27 in the previous year[10]. - The company reported no significant new strategies or mergers and acquisitions during the period[16]. - There are no new product developments or technological advancements mentioned in the conference call[16]. - Other comprehensive income after tax for the current period was a loss of ¥81,347,277.16, compared to a gain of ¥11,672,338.90 in the previous period[22].

Financial Performance - The company's operating revenue for Q1 2025 was RMB 24,838,267,923.53, representing a 5.76% increase compared to RMB 23,486,119,294.48 in the same period last year[6] - Net profit attributable to shareholders for Q1 2025 was RMB 1,127,395,765.82, up 14.89% from RMB 981,246,783.99 year-on-year[6] - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 1,007,755,232.51, reflecting a 20.27% increase from RMB 837,889,225.17 in the previous year[6] - Basic earnings per share for Q1 2025 were RMB 0.83, a 15.28% increase from RMB 0.72 in the previous year[6] - Investment income for the period was RMB 236,083,008.03, a 39.60% increase compared to RMB 169,117,662.26 in the previous year[9] Cash Flow and Assets - The net cash flow from operating activities decreased by 58.30% to RMB 65,075,820.08, down from RMB 156,049,168.70 in the same period last year[6] - Total assets at the end of Q1 2025 were RMB 72,935,577,259.81, an increase of 4.64% from RMB 69,701,939,817.33 at the end of the previous year[6] - Shareholders' equity attributable to the company at the end of Q1 2025 was RMB 16,564,755,844.17, up 7.18% from RMB 15,455,626,606.63 at the end of the previous year[6] Shareholder Information - The total number of common shareholders at the end of the reporting period is 32,391[11] - Qingdao Hisense Air Conditioning Co., Ltd. holds 37.28% of the total issued share capital, amounting to 516,758,670 shares[11] - Hong Kong Central Clearing (Agent) Co., Ltd. holds 33.11% of the total issued share capital, amounting to 458,962,527 shares[11] - The top ten shareholders account for a significant portion of the company's equity, with the largest shareholder holding nearly 70% combined[11] - The company has a structured employee stock ownership plan, with significant holdings from various employee plans[11] - The total shares held by the top ten unrestricted shareholders include 516,758,670 shares from Qingdao Hisense Air Conditioning Co., Ltd.[11] - Hong Kong Central Clearing (Agent) Co., Ltd. represents multiple accounts and holds 12,445,200 shares, which is 8.98% of the total shares[14] Other Financial Metrics - The company reported a significant increase in trading financial liabilities, which rose by 540.12% to RMB 22,742,352.87 due to fluctuations in the fair value of forward foreign exchange contracts[9] - The company experienced a 63.01% decrease in non-operating income, which fell to RMB 28,589,505.45 from RMB 77,287,462.27 in the previous year[9] - The company has confirmed that there are no other shareholders with relationships that would classify them as acting in concert under the relevant regulations[12] - The company has no related party transactions among the top shareholders, except for the relationship between Qingdao Hisense Air Conditioning Co., Ltd. and Hisense (Hong Kong) Co., Ltd.[12] Reporting and Communication - The company plans to release its Q1 2025 report in both Chinese and English, with Chinese taking precedence in case of discrepancies[13]

Investment Rating - The industry rating is maintained as "Outperform" [5] Core Viewpoints - In Q1 2025, the home appliance export continued to show double-digit growth, with a notable recovery in export growth in March despite the impact of US tariffs. The export volume maintained a high growth rate of +20%, while the average export price in RMB showed a year-on-year decline of -5% [1][12][16] - The global manufacturing PMI averaged 49.9% in Q1 2025, indicating resilience in international market demand, with exports to over 170 countries and regions achieving growth [1][16] - The North American channel replenishment is expected to support the improvement of domestic home appliance companies' export data [2][25] Summary by Sections Export Data - In March 2025, the domestic home appliance export value was 642 billion RMB, up 14% year-on-year, and 9 billion USD, up 13% year-on-year. In Q1 2025, the export value was 1736 billion RMB, up 10% year-on-year, and 242 billion USD, up 9% year-on-year [1][12] Category Performance - In Q1 2025, major categories such as white goods, kitchen appliances, small appliances, and color TVs maintained positive growth, with white goods leading at a growth rate of 23% [2][20] - In the US, white goods export growth reached 15%, while in Latin America, white goods and small appliances saw impressive growth rates of 46% and 18% respectively [2][22] Inventory and Orders - US durable goods inventory has been declining since Q3 2021, with a year-on-year decrease of about 5% as of Q4 2024, indicating a relatively low inventory level [2][25] Market Trends - The home appliance sector showed a positive performance in the stock market, with the home appliance index rising by 1.89% during the week of April 21-25, 2025 [3][29] - The report suggests that the upcoming peak season for air conditioning and the 618 shopping festival in May will further strengthen retail sales [3][4] Investment Recommendations - Recommended stocks include major appliances like Midea Group, Gree Electric, Haier Smart Home, and Hisense Home Appliances, as well as small appliances like Supor and Feike Electric [4]

Investment Rating - The report maintains a positive outlook on the home appliance industry, particularly in the white goods sector, due to favorable policies and market conditions [2][3]. Core Insights - The report highlights the significant growth in the home appliance replacement program, with over 100 million units exchanged as of April 10, 2025, indicating strong consumer demand and government support [3][9]. - The white goods sector is characterized by low valuations, high dividends, and stable growth, making it an attractive investment opportunity [2]. - The report emphasizes the expected increase in production and sales in the white goods sector, driven by the "old-for-new" policy and rising copper prices, which are boosting market sentiment [2][3]. Summary by Sections A. White Goods Data - In March, air conditioner retail volume decreased by 5.0%, while retail revenue increased by 0.1%, with an average price of 4480 yuan, up 5.34% year-on-year [25][26]. - Refrigerator retail volume and revenue rose by 2.0% and 7.7%, respectively, with an average price of 7237 yuan, up 4.2% year-on-year [26]. - Washing machine retail revenue increased by 4.7%, while retail volume decreased by 2.1%, with an average price of 4586 yuan, up 5.8% year-on-year [26]. B. Kitchen Appliance Data - In March, the retail volume of range hoods increased by 27.1%, and sales revenue rose by 34.4%, with an average price of 4423 yuan, up 4.9% year-on-year [29][30]. - The retail volume and revenue of gas stoves increased by 18.5% and 31.5%, respectively, with an average price of 2308 yuan, up 9.9% year-on-year [29][31]. C. Industry Dynamics - The home appliance sector underperformed compared to the CSI 300 index, with the home appliance index rising by 0.2% while the CSI 300 rose by 0.6% [4][6]. - Key companies such as Rongtai Health and Hisense Home Appliances showed significant gains, while others like Feike Electric and Ecovacs experienced declines [6][4]. D. Macro Economic Environment - As of April 18, 2025, the USD to RMB exchange rate was 7.2069, reflecting a 0.26% increase since the beginning of the year [32].

Core Viewpoint - China's home appliance industry is leveraging international expansion as a key growth strategy despite uncertainties in the global trade environment, with leading companies like Hisense demonstrating strong performance through diversified global operations [1] Group 1: Financial Performance - Hisense reported an annual revenue of 92.746 billion yuan, representing a year-on-year growth of 8.35%, with overseas revenue exceeding 35.6 billion yuan, up 28% [1] - In the European market, Hisense's smart large-screen refrigerators saw sales increase by over 300% year-on-year from January to November 2024 [3] Group 2: Localization and Product Development - Hisense emphasizes a "localization" strategy by establishing 16 R&D centers and 19 industrial parks overseas to better serve local markets and enhance revenue [1] - The company is focusing on AI upgrades and energy efficiency in product offerings to meet European market preferences, achieving significant improvements in product ratings and energy standards [3] Group 3: Supply Chain and Market Opportunities - Hisense is enhancing its supply chain capabilities, with a 25.8% optimization in core order fulfillment cycles and a 7.5% increase in order assurance rates [4] - The company is expanding its high-end product offerings in Europe, with a 35% increase in revenue, particularly in washing machines, which saw a 48% revenue growth [4] Group 4: Channel Efficiency and Regional Growth - In the Asia-Pacific region, Hisense implemented a multi-dimensional strategy leading to a 15% revenue increase, with significant growth in Australia (15%) and ASEAN markets (32%) [5] - The central air conditioning segment achieved an 80% revenue growth by focusing on professional channels and water machine categories [5] Group 5: Brand Marketing and Recognition - Hisense has utilized sports marketing as a key strategy for brand recognition, sponsoring major events like the UEFA European Championship and the FIFA World Cup, which has significantly boosted its global brand presence [6] - The company ranked first in the smart home appliance sector in the 2024 China Brand Global Trust Index, highlighting its strong market position [6] Group 6: Product Innovation and Technology - Hisense is launching a series of innovative products tailored for the World Cup, integrating advanced AI technology to enhance user experience in various home appliance categories [7] - The company’s long-term global strategy is characterized as a marathon rather than a sprint, emphasizing the importance of sustained efforts in navigating international markets [7]

Investment Rating - The report maintains a positive outlook on the home appliance industry, highlighting the potential for growth and investment opportunities [5]. Core Insights - The home appliance sector is experiencing significant growth, with double-digit increases in both domestic and international sales for major categories such as air conditioners, refrigerators, and washing machines [6][41][43]. - The report emphasizes three main investment themes: the undervaluation and stable growth of white goods, the potential for export growth driven by large customer orders, and the rising demand for core components in the white goods supply chain [6]. Summary by Sections Data Observation - In February 2025, the air conditioning industry produced 16.785 million units, a year-on-year increase of 42.9%, with domestic sales up 21.3% and exports up 50.8% [34]. - The refrigerator sector saw production of 7.225 million units, a 47.8% increase year-on-year, with both domestic and export sales rising by 16.5% [41]. - The washing machine industry produced 6.51 million units, a 14.7% increase year-on-year, with domestic sales up 20.9% and exports up 8.0% [43]. Investment Highlights - The report suggests that the white goods sector benefits from favorable real estate policies and has attributes of low valuation, high dividends, and stable growth, making it an attractive investment [6]. - The "trade-in" policy is expected to catalyze demand, with production schedules for domestic sales projected to increase significantly in the coming months [6]. - Recommended companies include Hisense, Midea, Haier, and Gree for their strong market positions and growth potential [6]. Industry Dynamics - The report notes that the home appliance sector underperformed compared to the broader market, with the home appliance index down 3.5% while the CSI 300 index fell 1.4% [8][9]. - The announcement of a "reciprocal tariff" plan by the Trump administration could impact trade dynamics, with various countries facing significant tariff increases [14][68]. - The "two new" policies are showing positive effects, with a notable increase in consumer spending on home appliances and vehicles, indicating a recovery in the consumer market [15][66]. Company Performance - Hisense reported a revenue increase of 9% year-on-year for 2024, with a net profit of 2.246 billion yuan, reflecting a stable financial performance [56]. - Stone Technology achieved a revenue growth of 38% year-on-year, although its net profit declined by 4%, indicating challenges in profitability despite revenue growth [58]. - The report highlights the struggles of Gome Retail, which reported a significant loss and declining revenues, reflecting broader challenges in the traditional retail sector [70][71].