GREE(SZ:000651) Huaan Securities·2024-10-31 09:32Investment Rating - The investment rating for Gree Electric Appliances is "Buy" (maintained) [1] Core Views - The report highlights that Gree Electric Appliances has shown improvements in operational efficiency and profitability, with a record high net profit margin in Q3 [1] - The company is expected to benefit from the "old-for-new" policy, which is anticipated to enhance domestic sales and market share for leading brands [1] - The report maintains revenue and profit forecasts for 2024-2026, projecting revenue growth of 4.6%, 4.8%, and 4.2% respectively, and net profit growth of 10.7%, 6.0%, and 6.2% respectively [2][3] Revenue Analysis - In Q3, Gree's revenue was 471.3 billion yuan, a year-on-year decrease of 15.9%, while net profit attributable to shareholders was 78.2 billion yuan, an increase of 5.5% year-on-year [1] - For the first three quarters, total revenue was 1,474.2 billion yuan, down 5.4% year-on-year, but net profit attributable to shareholders increased by 9.3% to 219.6 billion yuan [1] - The report indicates that the decline in revenue is primarily due to a slowdown in domestic air conditioning sales, with a 20% drop in domestic sales and a 43% increase in exports [1] Profit Analysis - The gross profit margin for Q3 was slightly down by 0.5 percentage points year-on-year, while the net profit margin increased by 2.7 percentage points year-on-year [1] - The report notes a significant reduction in sales expenses, attributed to the effectiveness of channel reforms, leading to improved profitability [1] - The operating cash flow for Q3 was 75.9 billion yuan, showing a slight decrease from 80.63 billion yuan in Q2 [1] Financial Forecasts - The report maintains revenue forecasts of 2,143.5 billion yuan for 2024, 2,247.3 billion yuan for 2025, and 2,340.6 billion yuan for 2026, with corresponding net profits of 321.3 billion yuan, 340.5 billion yuan, and 361.8 billion yuan [2][3] - The projected P/E ratios for the next three years are 8.0, 7.5, and 7.1 respectively, indicating a favorable valuation outlook [2][3]