GREE(SZ:000651) EBSCN·2024-09-03 02:03Investment Rating - The report maintains a "Buy" rating for Gree Electric Appliances (000651.SZ) with a current price of 39.70 CNY and a target price of 46.62 CNY [2][3]. Core Insights - Gree Electric Appliances reported a revenue of 100.3 billion CNY for the first half of 2024, a year-on-year increase of 1%, and a net profit attributable to shareholders of 14.1 billion CNY, up 12% year-on-year. The second quarter of 2024 saw a revenue of 63.7 billion CNY, a slight decline of 0.6% year-on-year, but a net profit of 9.5 billion CNY, reflecting a 10% increase year-on-year, indicating performance exceeded market expectations [3][4]. Revenue Analysis - Air conditioning revenue reached 78% of total revenue in H1 2024, amounting to 78 billion CNY, with a year-on-year growth of 11%. This performance is close to historical peaks, achieved under low channel inventory conditions. The company's air conditioning shipment volume increased by 1% year-on-year, while online and offline retail prices saw a decrease of 3% and an increase of 1%, respectively [7][8]. - Other business revenue, primarily from raw material trading, was 9.8 billion CNY, accounting for 10% of total revenue, down 43% year-on-year, indicating a strategic focus on core business [8]. Profitability Analysis - The gross profit margin for H1 2024 was 30.5%, an increase of 1.7 percentage points year-on-year. The net profit margin for H1 and Q2 2024 was 14.2% and 14.9%, respectively, both showing significant year-on-year improvements. The record high net profit margin in Q2 was attributed to improved revenue structure and pricing power [8][16]. Financial Forecast and Valuation - The report forecasts Gree's net profit attributable to shareholders for 2024-2026 to be 30.3 billion CNY, 32.9 billion CNY, and 36.4 billion CNY, respectively. The current price corresponds to a price-to-earnings ratio (P/E) of 7, 7, and 6 times for the respective years, supporting the "Buy" rating [8][15].