Core Viewpoint - Hisense Home Appliances (000921)(00921) experienced a nearly 6% decline in stock price, attributed to weaker performance in central air conditioning and fluctuations in exports, impacting Q3 revenue and net profit [1] Financial Performance - For the first three quarters, the company achieved operating revenue of 71.5327 billion yuan, a year-on-year increase of 1.35% [1] - The net profit attributable to shareholders was 2.8118 billion yuan, up 0.67% year-on-year [1] - In Q3 alone, revenue reached 22.19 billion yuan, reflecting a 1.16% year-on-year increase [1] - The net profit for Q3 was 740 million yuan, showing a decrease of 5.4% year-on-year [1] Market Analysis - Huatai Securities noted that the company's Q3 performance was under pressure due to weak central air conditioning sales and export volatility [1] - Industrial Online statistics indicated that in July-August 2025, sales of Hisense multi-split air conditioners increased by 2.1% year-on-year, with domestic sales up 2.7% and export sales down 3.1% [1] - In Q3 2025, Hisense's home air conditioner sales rose by 4.7% year-on-year, with domestic sales increasing by 40.7% while export sales decreased by 19.8% [1] - Refrigerator sales in July-August 2025 saw a year-on-year increase of 3.4%, with domestic sales up 25.9% and export sales down 7.6% [1] - Overall, the company is expected to maintain stable domestic sales performance, with white goods performing better than central air conditioning, while exports face short-term pressure [1]

Core Viewpoint - Hisense Home Appliances' stock price has experienced a decline of 9.33% year-to-date, with a slight increase of 0.48% over the last five trading days, indicating volatility in its market performance [2]. Financial Performance - For the period from January to September 2025, Hisense Home Appliances reported a revenue of 71.53 billion yuan, reflecting a year-on-year growth of 1.35%. The net profit attributable to shareholders was 2.81 billion yuan, showing a growth of 0.67% [2]. - Cumulative cash dividends since the company's A-share listing amount to 6.964 billion yuan, with 3.823 billion yuan distributed over the last three years [3]. Stock Market Activity - As of October 30, the stock price of Hisense Home Appliances was 25.09 yuan per share, with a trading volume of 256 million yuan and a turnover rate of 1.08%. The total market capitalization stood at 34.746 billion yuan [1]. - The net inflow of main funds was 11.68 million yuan, with significant buying activity from large orders amounting to 63.66 million yuan, representing 24.89% of total buying [1]. Shareholder Information - As of September 30, 2025, the number of shareholders for Hisense Home Appliances was 46,300, an increase of 12.25% from the previous period. The average circulating shares per person remained at 0 [2]. - Among the top ten circulating shareholders, Hong Kong Central Clearing Limited held 26.89 million shares, a decrease of 1.32 million shares from the previous period [3].

Summary of Hisense Home Appliances Conference Call Company Overview - **Company**: Hisense Home Appliances - **Date**: Q3 2025 Conference Call Key Financial Metrics - **Total Revenue**: 71.5 billion CNY, a year-on-year increase - **Net Profit**: 2.812 billion CNY, a year-on-year increase of 1.65% - **Operating Cash Flow**: 6.981 billion CNY, a year-on-year increase of 34% [2][3][4] Industry Performance - **Domestic vs. International Sales**: Domestic sales outperformed international sales in Q3 2025, with core categories like refrigerators and washing machines performing well. Home air conditioning saw significant growth [2][4] - **Impact of Real Estate Market**: Hisense Hitachi's central air conditioning segment faced a decline due to the downturn in the real estate market, but public construction still achieved positive growth when excluding the impact of refined decoration [2][6] Product Line Developments - **New Product Lines**: Hisense Hitachi plans to expand its water machine product line, investing nearly 1 billion CNY in a new factory in Changsha, expected to start production by the end of the year [2][7] - **Refrigerator Market Performance**: Refrigerators performed exceptionally well in overseas markets, holding the number one market share in 12 countries and leading in Europe [2][8] Strategic Initiatives - **Channel Expansion**: After the launch of the Changsha mobile phone factory, the company plans to enter seven major fields and enhance channel partner capabilities, which is expected to significantly contribute to growth by 2026 [2][8] - **Cost Control Measures**: The company has implemented measures such as SKU reduction and product standardization to improve profitability, particularly for the Cologne brand [4][9] Market Challenges - **Price Competition**: Intense price competition has led to a decline in profitability, particularly in the new wind segment, despite achieving good sales performance [4][9] - **External Factors**: The company faced challenges from rising raw material prices and increased sales expenses, which impacted overall profit margins [11][12] Future Outlook - **Q4 Expectations**: The company is optimistic about achieving better profitability in Q4 compared to the previous year, driven by cost reduction measures and improved sales strategies [11][12] - **Long-term Growth Strategy**: Hisense aims to enhance its competitive edge through a full value chain project approach, focusing on water machines, multi-connected units, and single units [7][8] Additional Insights - **Supply Chain Improvements**: The company has made significant progress in supply chain efficiency, including the operational launch of the Thailand factory and improvements in the Monterrey factory [2][8] - **Dividend Policy**: The company maintains a dividend payout ratio of around 50% of net profit, aiming to provide better returns to investors [12]

Investment Rating - The investment rating for Hisense Home Appliances is "Buy-A" with a target price of 29.46 CNY for the next six months [4][6]. Core Views - Hisense Home Appliances reported a steady revenue growth in Q3 2025, with total revenue reaching 715.3 billion CNY for the first three quarters, a year-on-year increase of 1.4%. The net profit attributable to shareholders was 28.1 billion CNY, up 0.7% year-on-year. In Q3 alone, revenue was 221.9 billion CNY, growing 1.2% year-on-year, while net profit was 7.4 billion CNY, down 5.4% year-on-year [1][2]. - The company is experiencing a mixed performance across different product categories, with domestic air conditioning sales boosted by national subsidies, while export sales faced challenges due to high base effects. The central air conditioning segment saw a decline in revenue due to a sluggish real estate market [2][3]. - Hisense is accelerating its overseas diversification and digital transformation to enhance production efficiency, which is expected to improve operational performance in the future [1][4]. Summary by Sections Financial Performance - In Q3 2025, Hisense's gross margin was 20.2%, an increase of 0.2 percentage points year-on-year, attributed to improved capacity utilization in overseas factories and better product mix [2]. - The net profit margin for Q3 was 3.3%, down 0.2 percentage points year-on-year, primarily due to an increase in sales expense ratio, which rose by 0.7 percentage points [3]. - Operating cash flow for Q3 was 16.6 billion CNY, a decrease of 46.6% year-on-year, mainly due to a 3.1% decline in cash received from sales [3]. Future Outlook - The company is expected to maintain a comprehensive brand layout and multi-category collaborative development, providing consumers with smart home solutions. The global competitiveness is continuously improving as the company expands its overseas market presence [4]. - EPS forecasts for 2025 to 2027 are projected at 2.46 CNY, 2.76 CNY, and 3.04 CNY respectively, with a PE valuation of 12x for 2025 [4][12].

Core Viewpoint - The company reported a total revenue of 71.533 billion yuan for the first nine months of 2025, a year-on-year increase of 1.35%, with a net profit attributable to the parent company of 2.812 billion yuan, up 0.67% year-on-year. However, Q3 revenue showed a year-on-year increase of only 1.16%, while net profit decreased by 5.4%, primarily due to weak performance in the central air conditioning segment and fluctuations in exports [1]. Group 1: Financial Performance - For the first nine months of 2025, the company's gross margin was 21.08%, an increase of 0.54 percentage points year-on-year, with Q3 showing a year-on-year increase of 0.2 percentage points, mainly due to the recovery in the three-electric business and improved efficiency at the Monterrey plant [4]. - The company has adjusted its net profit forecasts for 2025-2027 to 3.38 billion, 4.02 billion, and 4.50 billion yuan, respectively, reflecting a downward revision of 9.8%, 4.4%, and 4.2% from previous estimates [5]. Group 2: Business Segment Performance - The central air conditioning business remains under pressure, with industry data showing a year-on-year decline of 2.7% in domestic sales and a 2.5% increase in exports for July-August 2025. The company’s domestic sales are significantly affected by weak real estate trends and adjustments in ongoing projects [2]. - The home air conditioning segment experienced a year-on-year increase of 40% in domestic sales but a 20% decline in exports, primarily due to overseas inventory pressures [3]. - The ice washing business showed steady growth, with refrigerator sales increasing by 4% domestically and decreasing by 2% internationally, supported by national subsidies [3]. Group 3: Market Outlook - The company is expected to face continued pressure in the central air conditioning segment in Q4, with recovery in domestic real estate demand, scene expansion, and product innovation being critical for future performance [2]. - The three-electric business is gradually recovering, and the second growth curve for new energy components is forming, which may help in performance recovery [1].

Summary of Hisense Home Appliances Group (000921.SZ) 3Q25 Earnings Call Company Overview - **Company**: Hisense Home Appliances Group - **Ticker**: 000921.SZ - **Reporting Period**: 3Q25 Key Financial Results - **Total Revenue**: Rmb 22,192 million, up by +1% year-over-year (yoy) - **Net Profit**: Rmb 735 million, down by -5% yoy - **Comparison to Estimates**: Revenue and net profit were -4% and -16% below Goldman Sachs estimates respectively [1][4][5] Core Insights and Arguments - **Central AC and Exports**: The central air conditioning (AC) business continues to face pressure, contributing to lower revenue growth. Exports of AC units have also moderated, impacting overall performance [4][6] - **Domestic Market Performance**: Despite challenges in the central AC segment, domestic white goods showed healthy growth, particularly in washing machines and refrigerators, which demonstrated resilience in both domestic and overseas markets [4][6] - **Margin Decline**: Gross Profit Margin (GPM) and Operating Profit Margin (OPM) declined by 0.6 percentage points and 0.1 percentage points yoy to 20.2% and 3.9% respectively. This decline is attributed to lower contributions from the higher-margin central AC segment and increased domestic competition [4][5] Management Focus Areas for Future - **Earnings Call Topics**: Management will address several key areas during the earnings call, including: 1. Breakdown of sales channels in 3Q25 and outlook for the central AC business 2. Impact of trade-in stimulus on the legacy white goods business 3. Changes in competitive intensity, particularly in split ACs 4. Updates on export orders and tariff impacts 5. Measures to enhance operating efficiency and margins [2][4] Investment Thesis - **Buy Rating Justification**: The investment thesis supports a Buy rating based on: 1. High earnings growth visibility, particularly with the 2024 Employee Stock Ownership Plan (ESOP) target 2. Attractive dividend yield 3. Valuation metrics indicating the stock is trading at an undemanding forward Price-to-Earnings (P/E) ratio against high single-digit profit growth expectations [6][7] Risks to Consider - **Key Risks**: 1. Potential disruption in white goods demand due to weaker global macroeconomic conditions 2. Further slowdown in the property market affecting demand for Variable Refrigerant Flow (VRF) systems 3. Increased competition from domestic players threatening the Hisense-Hitachi joint venture's leading position 4. Margin dilution from greater penetration in the developer channel 5. Below-expected integration performance of the Hisense-Hitachi joint venture 6. Underperformance of the legacy white goods business [8][6] Conclusion Hisense Home Appliances Group's 3Q25 results reflect a mixed performance with challenges in the central AC segment and exports, while domestic white goods show resilience. The company is focusing on improving margins and operational efficiency, with a positive long-term outlook supported by strategic initiatives and a favorable investment thesis. However, several risks could impact future performance.

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Core Viewpoint - Hisense Home Appliances (000921.SZ) reported a slight increase in revenue and net profit for the first three quarters of 2025, indicating stable performance amidst market conditions [1] Financial Performance - The company achieved an operating revenue of 71.533 billion yuan, representing a year-on-year growth of 1.35% [1] - The net profit attributable to shareholders of the listed company was 2.812 billion yuan, with a year-on-year increase of 0.67% [1] - The net profit attributable to shareholders after deducting non-recurring gains and losses was 2.327 billion yuan, reflecting a year-on-year growth of 1.65% [1]

Investment Rating - The report maintains a "Buy" investment rating for Hisense Home Appliances [5] Core Views - The company has shown slight declines in profitability but is optimistic about its long-term globalization strategy [1][2] - The company reported total revenue of 71.533 billion yuan for the first three quarters of 2025, a year-on-year increase of 1.35%, and a net profit attributable to shareholders of 2.812 billion yuan, up 0.67% year-on-year [1] - The third quarter of 2025 saw a single-quarter revenue of 22.192 billion yuan, a year-on-year increase of 1.16%, but a net profit of 735 million yuan, down 5.40% year-on-year [1] - The gross margin for Q3 2025 decreased by 0.56 percentage points to 20.20% [1] - The company is committed to a globalization strategy, enhancing its brand influence overseas, and accelerating digital transformation [2] Financial Performance Summary - For 2025, the company is projected to achieve net profits of 3.398 billion yuan, 3.771 billion yuan, and 4.154 billion yuan for 2025, 2026, and 2027 respectively, with growth rates of 1.5%, 11.0%, and 10.2% [2] - The operating revenue is expected to grow from 85.6 billion yuan in 2023 to 107.296 billion yuan in 2027, with a growth rate of 15.5% in 2023 and slowing to 6.0% by 2027 [4] - The latest diluted EPS is projected to increase from 2.05 yuan in 2023 to 3.00 yuan in 2027 [4] - The net profit margin for Q3 2025 decreased by 0.3 percentage points to 4.88% [1]

Core Insights - Hisense Home Appliances (00921) reported a revenue of 71.5327 billion yuan for the first three quarters, representing a year-on-year growth of 1.35% [1] - The net profit attributable to shareholders of the listed company was 2.8118 billion yuan, with a year-on-year increase of 0.67% [1] - The basic earnings per share stood at 2.06 yuan [1]