Guotou Securities·2024-08-28 01:23Investment Rating - The investment rating for Haier Smart Home is maintained at "Buy - A" with a target price of 28.28 CNY for the next six months, corresponding to a PE valuation of 14x for 2024 [4][2]. Core Views - Haier Smart Home reported a revenue of 135.62 billion CNY for the first half of 2024, a year-on-year increase of 3.0%, and a net profit attributable to shareholders of 10.42 billion CNY, up 16.3% year-on-year. In Q2 2024, the company achieved a revenue of 66.65 billion CNY, with a slight year-on-year increase of 0.1%, and a net profit of 5.65 billion CNY, up 13.2% year-on-year [1][2]. - The company is experiencing a continuous improvement in cost efficiency, leading to enhanced profitability in Q2 2024. The gross profit margin for Q2 was 32.3%, an increase of 0.2 percentage points year-on-year, driven by digital transformation in procurement, research, and manufacturing [1][2]. - The management team and employees are increasingly motivated to explore growth opportunities, particularly in overseas markets, which still have significant potential for market share expansion [2]. Financial Performance Summary - For the first half of 2024, Haier's domestic business operating profit margin improved by 1.8 percentage points year-on-year, while the overseas business saw a 0.6 percentage point increase [1]. - The operating cash flow for Q2 was 6.09 billion CNY, reflecting a year-on-year increase of 12.1%, indicating healthy operational performance [1]. - The company expects domestic revenue growth to accelerate due to stimulus from trade-in programs, while overseas revenue is anticipated to gain momentum in a declining interest rate environment [1][2]. Earnings Forecast - The projected earnings per share (EPS) for Haier Smart Home for 2024, 2025, and 2026 are 2.02 CNY, 2.26 CNY, and 2.46 CNY, respectively [2][8]. - The net profit forecast for 2024 is 19.07 billion CNY, with a growth rate of 14.9% expected [3][12]. Valuation Metrics - The company’s price-to-earnings (PE) ratio is projected to decrease from 15.4 in 2022 to 9.8 in 2026, indicating an improving valuation outlook [8][12]. - The net profit margin is expected to rise from 6.0% in 2022 to 7.8% in 2026, reflecting enhanced profitability [8][12].