HISENSE H.A.(000921) Huachuang Securities·2024-09-04 13:39Investment Rating - The report maintains a "Strong Buy" rating for Hisense Home Appliances, with a target price of 34 CNY, compared to the current price of 26.24 CNY [1]. Core Views - The company's performance in H1 2024 met expectations, with revenue of 48.64 billion CNY, a year-on-year increase of 13.3%, and a net profit of 2.02 billion CNY, up 34.6% year-on-year. The second quarter saw revenue of 25.16 billion CNY, growing 7.0% year-on-year, and a net profit of 1.03 billion CNY, up 17.3% year-on-year [1]. - Revenue growth has slowed, but the export market continues to show high growth. Domestic revenue grew by 3.5%, while overseas revenue surged by 27.9% in H1 2024 [1]. - The air conditioning segment reported revenue of 22.77 billion CNY, a 7.6% increase, while the washing machine segment saw a significant increase of 26.8% in revenue, driven by technological innovation and product upgrades [1]. - The company is focusing on high-growth and competitive emerging categories to drive growth, with overseas white goods revenue increasing by 36.9% in H1 2024 [1]. Summary by Sections Financial Performance - H1 2024 revenue reached 48.64 billion CNY, up 13.3% year-on-year, with Q2 revenue at 25.16 billion CNY, a 7.0% increase. Net profit for H1 was 2.02 billion CNY, a 34.6% increase, with Q2 net profit at 1.03 billion CNY, up 17.3% [1]. - Gross margin for Q2 2024 was 21.0%, down 0.9 percentage points year-on-year, primarily due to rising raw material costs and intensified competition in the domestic air conditioning market [1]. Business Segments - Air Conditioning: H1 2024 revenue of 22.77 billion CNY, up 7.6%, with central air conditioning growth at 0.3% due to a weak real estate market. However, the home appliance category is expected to achieve double-digit growth [1]. - Washing Machines: H1 2024 revenue of 14.69 billion CNY, up 26.8%, with significant contributions from washing machine innovations leading to a 49.8% increase in revenue [1]. - Automotive Thermal Management: Revenue of 94.18 billion JPY in H1 2024, up 2.0%, with expectations for revenue and profit growth as new energy orders are fulfilled [1]. Future Outlook - The company anticipates a potential boost in domestic market demand due to the implementation of replacement policies, while overseas market expansion continues to accelerate [1]. - Adjusted EPS forecasts for 2024, 2025, and 2026 are 2.38 CNY, 2.73 CNY, and 3.10 CNY, respectively, with corresponding P/E ratios of 11, 10, and 8 [1][2].