Investment Rating - The report maintains a "BUY" rating for Haier Smart Home with a target price (TP) of HK 24.05 [2][3]. Core Insights - The sales growth slowdown in 2Q24 was unexpected, but margin improvements were notable. The outlook for 2H24 is positive, driven by government subsidies, potential interest rate cuts, new product launches, and margin recovery in the EU [2][6]. - The "old for new" trade subsidies initiated in August 2024 are expected to favor high-end products, with significant sales growth observed in home appliances, particularly in Hubei province, where sales increased by 30% YoY [2][6]. - Haier's FY24E guidance remains unchanged, targeting mid-single-digit sales growth in China and over 10% growth overseas, with specific categories like air-conditioners and kitchen appliances expected to perform well [2][6]. Financial Summary - Revenue projections for FY24E are set at RMB 273.7 billion, with a YoY growth of 4.7%. Net profit is expected to reach RMB 19.6 billion, reflecting a 15.2% growth [3][12]. - The report indicates a fine-tuning of net profit forecasts for FY24E, FY25E, and FY26E by +1%/-1%/-1% respectively, accounting for slower sales growth but improved operating leverage and efficiency gains [2][7]. - The earnings summary shows a consistent increase in revenue and net profit over the forecast period, with net profit margins improving from 7.1% in FY24E to 7.7% in FY26E [3][12]. Market Position and Competitive Advantage - Haier is positioned to benefit from the ongoing subsidy programs, with a significant portion of local sales companies and distributors engaged in discussions with the government [2][6]. - The company is expected to leverage its market leadership to capture more high-end demand, with Casarte brand products showing exceptional sales growth [2][6]. - The report highlights Haier's strategic focus on high-end product sales and operational efficiencies, which are anticipated to enhance gross and operating margins in the upcoming periods [6][7].
海尔智家：Takeaway from the post result NDR