HAIER SMART HOME(600690) -·2025-01-17 02:53Investment Rating - The report maintains a "Buy" rating for Haier Smart Home with a target price of Rmb 38.50, corresponding to a 16.5x PE for 2025E [5][6]. Core Insights - Haier Smart Home has shown strong sales momentum continuing into 2025, with management guiding for revenue growth in the mid to high single digits, supported by domestic subsidies and product upgrades [2]. - The company expects a continued increase in operating profit margins, with a projected decrease in SG&A expenses by 50 basis points in 2025 [2]. - Domestic sales are anticipated to grow in double digits, particularly for the Casarte brand, benefiting from higher-than-expected subsidies [2]. - The company is addressing competitive threats from Xiaomi by launching more competitive SKUs and enhancing retail efficiency while maintaining its premium strategy [4]. - Concerns regarding U.S. tariffs have led management to evaluate shifting production from China to Vietnam and Thailand, which may require additional capital expenditure [3]. Summary by Sections Financial Performance - Revenue is projected to grow from Rmb 261.428 billion in 2023 to Rmb 351.350 billion by 2028, reflecting a steady increase [8]. - EBITDA is expected to rise from Rmb 18.669 billion in 2023 to Rmb 33.968 billion by 2028, indicating improved profitability [8]. - Net profit is forecasted to increase from Rmb 16.597 billion in 2023 to Rmb 29.709 billion by 2028 [8]. Market Position - Haier Smart Home is recognized as one of the largest home appliance manufacturers globally, with a diverse product range including refrigerators, washing machines, and air conditioners [11]. - The company aims to become a leading provider of smart home solutions, leveraging its R&D capabilities and a network connecting suppliers and users [11]. Valuation Metrics - The report uses a DCF valuation method with a WACC of 11.4%, projecting a 13% CAGR in earnings from 2024 to 2026 [5]. - The current market price of Rmb 26.87 suggests a potential upside of 43.3% to the target price [10].