GREE(000651) 光大证券·2024-11-06 11:08Investment Rating - The report maintains a "Buy" rating for Gree Electric Appliances (000651.SZ) with a current price of 43.90 CNY and a target price of 54.10 CNY [2]. Core Insights - The company's Q3 net profit margin reached a historical high, driven by improved operational trends from the replacement policy [2][4]. - Gree's revenue for the first three quarters of 2024 was 147.4 billion CNY, a year-over-year decrease of 5%, while net profit increased by 9% to 22 billion CNY [3][4]. - The report highlights that the "old-for-new" policy is expected to significantly enhance domestic demand and improve product structure and profit margins [5]. Revenue Analysis - In Q3 2024, Gree's revenue was 47.1 billion CNY, down 16% year-over-year, with a net profit of 7.8 billion CNY, reflecting a 5% increase [3][4]. - The main business revenue for H1 2024 was 90 billion CNY, showing a 10% increase year-over-year, while other business revenue fell by 43% [3]. - The report indicates that the pressure on the main business in Q3 was primarily due to weak domestic demand, but the "old-for-new" policy is expected to improve this situation [3][4]. Profitability Analysis - Gree's Q3 gross margin was 29.7%, with a net profit margin of 16.7%, marking a year-over-year increase of 3.4 percentage points [4]. - The report attributes the improvement in profitability to better revenue structure and channel reforms [4]. - Cash quality has improved, with operating cash flow in Q3 at 7.6 billion CNY, compared to 8.1 billion CNY in Q2 [4]. Investment Recommendations - The report suggests that Gree's strong profit resilience and stable performance in a weak industry environment justify an upward revision of the target price to 54.10 CNY, corresponding to a PE ratio of 10 times for 2024 earnings [5]. - The report maintains profit forecasts for 2024-2026 at 30.3 billion CNY, 32.9 billion CNY, and 36.4 billion CNY respectively, indicating a stable growth outlook [5][6].