HAIER SMART HOME(600690) 浙商证券·2024-12-29 08:23Investment Rating - Maintains a "Buy" rating for Haier Smart Home (600690) [5][6] Core Views - US interest rate cuts are expected to drive a recovery in the housing market, which will boost home appliance consumption Historically, during periods of declining US Treasury yields, home appliance retail sales growth has ranged between 0% and 5%, with occasional spikes above 10% due to base effects [1] - North American home appliance consumption is closely tied to the real estate cycle, with a lag of about one quarter between home sales and appliance purchases Approximately 15% and 25% of US home appliance consumption comes from new and existing homes, respectively [1] - GEA's local production capacity in North America mitigates tariff risks GEA operates 9 manufacturing plants, 2 R&D centers, 4 dispatch centers, 4 parts distribution centers, and 157 local distribution centers in the US, ensuring minimal exposure to tariff impacts [1] - The replacement of old appliances is driving premium consumption, benefiting Haier's high-end brand Casarte The average prices of air conditioners, refrigerators, and washing machines have increased by 6 5%, 9 1%, and 11 8% respectively since the launch of the replacement program [14] - Casarte's sales have surged, with refrigerators and washing machines seeing year-on-year retail sales growth of 41% and 78% respectively in November [14] Financial Forecasts - Revenue is projected to grow from CNY 270 2 billion in 2024 to CNY 304 0 billion in 2026, with annual growth rates of 3%, 6%, and 6% respectively [5] - Net profit attributable to shareholders is expected to increase from CNY 19 1 billion in 2024 to CNY 25 0 billion in 2026, with annual growth rates of 15%, 14%, and 14% respectively [5] - The PE ratio for 2024 and 2025 is estimated at 14x and 12x respectively [5] - EPS is forecasted to rise from CNY 1 77 in 2024 to CNY 2 66 in 2026 [18] Industry and Market Trends - The home appliance sector typically outperforms during the valuation rotation period from December to January [5] - Haier Smart Home's current PE-TTM valuation percentile for 2024 is 44%, lower than peers such as Midea Group (91%), Gree Electric (73%), and Hisense Home Appliances (52%), indicating potential for outperformance in the valuation rotation cycle [17] Operational Highlights - Haier's local production capacity in North America through GEA provides a competitive edge against tariff risks [1] - The replacement of old appliances is driving a shift towards higher price segments, with refrigerators priced above CNY 8,000 and washing machines above CNY 6,000 seeing increased market share [14] - The Chinese government's continued support for domestic demand, including the extension of home appliance replacement subsidies into 2025, is expected to sustain growth for premium brands like Casarte [14]