GREE(000651) 长江证券·2024-09-12 01:39Investment Rating - Buy rating maintained for Gree Electric (000651 SZ) [3] Core Views - Gree Electric has been a leader in the air conditioning industry for over 30 years and is actively promoting channel reforms which are expected to boost its market share [2] - The company is increasing its focus on the refrigerator washing machine and export businesses which are expected to bring incremental growth [2] - Gree Electric has ample cash reserves and strong long term dividend paying capabilities making it a stable investment [2] Business Overview - Gree Electric achieved revenue of 204 billion yuan in 2023 a YoY increase of 7 93% and net profit attributable to shareholders of 29 billion yuan a YoY increase of 18 41% [4] - The company operates 77 production bases and 16 research institutes globally with products sold in over 190 countries and regions [4] - Air conditioning remains the core business accounting for 74 13% of total revenue in 2023 [18] Air Conditioning Business - Gree Electric has established strong brand recognition and cost advantages in the air conditioning industry [4] - The company is undergoing channel reforms to adapt to the shift towards online sales which is expected to improve market share [5] - China's air conditioning market still has significant growth potential with per 100 household ownership far from saturation [5][48] Diversification and New Growth Drivers - Gree Electric is exploring new growth areas including new energy industries through acquisitions of Gree Titanium and DunAn Environment [6] - The company is increasing its focus on the refrigerator washing machine and export businesses to diversify revenue streams [7] - Gree Electric has established a refrigerator and washing machine marketing company to improve channel efficiency and market penetration [7] Financial Performance and Dividend Policy - Gree Electric has shown strong revenue and profit growth with contract liabilities increasing by 6 9 billion yuan in Q1 2024 indicating strong dealer confidence [8] - The company has a high level of sales rebates reaching 50 881 billion yuan at the end of 2023 [8] - Gree Electric has ample cash reserves and a history of high dividend payouts with a payout ratio of 59% over the past five years [8][62] Future Outlook - Gree Electric is expected to achieve net profits of 31 945 billion yuan 34 251 billion yuan and 37 606 billion yuan in 2024 2025 and 2026 respectively [9] - The company's PE ratios for 2024 2025 and 2026 are projected to be 6 9 6 4 and 5 8 times respectively [9]