GREE(000651) 国信证券·2024-09-02 13:00Investment Rating - The investment rating for the company is "Outperform" (maintained) [2] Core Views - The company's revenue performance is stable, with continuous improvement in profitability [3] - In H1 2024, the company achieved revenue of 1002.9 billion yuan, a year-on-year increase of 0.5%, and net profit attributable to the parent company of 141.4 billion yuan, a year-on-year increase of 11.5% [3] - The company's air conditioning business grew well, with H1 revenue increasing by 11.4% year-on-year to 779.6 billion yuan [3] - The company's gross profit margin improved by 1.7 percentage points year-on-year to 30.5% in H1 2024, driven by changes in business structure [3] - The company's net profit margin attributable to the parent company increased by 1.5 percentage points year-on-year to 14.9% in Q2 2024 [3] Financial Performance and Projections - Revenue is projected to grow from 217,847 million yuan in 2024E to 238,189 million yuan in 2026E, with year-on-year growth rates of 6.3%, 4.7%, and 4.4% respectively [3] - Net profit attributable to the parent company is expected to increase from 32,653 million yuan in 2024E to 37,176 million yuan in 2026E, with year-on-year growth rates of 12.5%, 7.4%, and 6.0% respectively [3] - Earnings per share (EPS) are forecasted to rise from 5.80 yuan in 2024E to 6.60 yuan in 2026E [3] - The company's ROE is expected to decline slightly from 24.5% in 2024E to 22.7% in 2026E [3] - The company's PE ratio is projected to decrease from 6.8x in 2024E to 6.0x in 2026E [3] Business Segments - The air conditioning business contributed 779.6 billion yuan in H1 2024, accounting for a significant portion of the company's revenue [3] - Other main businesses, including industrial products and home appliances, also showed steady growth, with industrial products revenue increasing by 13.0% year-on-year to 62.0 billion yuan in H1 2024 [3] - The green energy segment saw a decline of 31.8% year-on-year to 19.9 billion yuan in H1 2024 [3] Operational Efficiency - The company's gross profit margin improved due to a significant reduction in the proportion of low-margin businesses [3] - The company's expense ratios remained stable or decreased slightly, with the sales expense ratio decreasing by 0.5 percentage points year-on-year to 8.5% in Q2 2024 [3] - The company's operating cash flow decreased by 49.0% year-on-year to 8.06 billion yuan in Q2 2024, but the cash content of net profit attributable to the parent company remained high at 85.2% [3] Industry Context - The air conditioning industry saw a 12.5% year-on-year increase in total sales in Q2 2024, driven by a 38.7% increase in export sales [3] - Domestic air conditioning sales were affected by unfavorable weather conditions, but the implementation of replacement policies is expected to drive future growth [3]