GREE(SZ:000651) Guotou Securities·2024-08-31 12:10Investment Rating - The investment rating for Gree Electric Appliances is maintained at "Buy-A" with a target price of 51.09 CNY for the next six months [4][2]. Core Insights - Gree Electric Appliances reported a total revenue of 100.29 billion CNY for the first half of 2024, reflecting a year-over-year increase of 0.5%, and a net profit attributable to shareholders of 14.14 billion CNY, up 11.5% year-over-year [1][2]. - The company's air conditioning business continues to grow, with domestic and international sales showing positive trends, particularly in overseas markets due to inventory replenishment and demand from emerging markets [1][2]. - The gross profit margin improved by 1.6 percentage points year-over-year in Q2, driven by increased revenue from air conditioning and effective cost control measures [1][2]. Financial Performance Summary - For H1 2024, Gree's air conditioning revenue increased by 11.4% year-over-year, while other business revenues decreased by 43.8% [1]. - The company's Q2 net profit margin reached 14.9%, an increase of 1.5 percentage points year-over-year, indicating enhanced profitability [1][2]. - The operating cash flow for Q2 was 8.06 billion CNY, down 49% year-over-year, primarily due to reduced revenue and increased accounts receivable [2]. Earnings Forecast - The expected earnings per share (EPS) for Gree Electric Appliances for 2024, 2025, and 2026 are projected to be 5.68 CNY, 6.33 CNY, and 7.10 CNY respectively [2][8]. - The projected price-to-earnings (PE) ratio for 2024 is 9 times, indicating a favorable valuation compared to historical performance [2][8]. Market Position - Gree Electric Appliances has a total market capitalization of approximately 223.57 billion CNY, with a circulating market value of about 220.15 billion CNY [4]. - The stock price as of August 30, 2024, was 39.70 CNY, with a 12-month price range of 30.8 CNY to 43.58 CNY [4].