GREE(000651) 长江证券·2025-02-05 02:48Investment Rating - The investment rating for Gree Electric Appliances is "Buy" and is maintained [10]. Core Viewpoints - Gree Electric Appliances has been undervalued in the white goods sector due to market concerns about its growth potential. However, the air conditioning segment remains one of the most promising areas in the home appliance industry, suggesting that Gree's growth prospects may be better than perceived. The company has maintained strong competitiveness despite recent revenue declines and has begun establishing a presence in emerging overseas markets, indicating potential for market share recovery [2][9][101]. Summary by Sections Valuation Concerns - Gree's valuation has been low compared to peers like Midea and Haier, primarily due to its heavy reliance on the air conditioning business and domestic market, which limits perceived growth potential [4][21]. Growth Potential - Gree's current business layout is primarily focused on air conditioning, but it is argued that the air conditioning market still offers significant growth opportunities. If Gree can maintain its competitive edge in this sector, its future may be more promising than market expectations suggest [5][35]. Competitive Position - Gree's market share in air conditioning has declined, contributing to its low valuation. However, this decline is attributed more to external market conditions rather than a weakening of Gree's brand strength. Recent improvements in consumer spending and government subsidies are expected to support a recovery in Gree's market share [6][50][74]. International Expansion - Gree's low export revenue is not solely due to a lack of overseas expansion but also reflects the pricing of its products. The company has made significant strides in establishing its brand in emerging markets, with a notable increase in overseas revenue share [7][86]. Underestimation of Value - Gree's financial position is strong, with substantial cash reserves and a low asset premium compared to its market capitalization. The company's return on equity is high, yet its price-to-book ratio is significantly lower than that of its competitors, indicating considerable room for valuation recovery [8][97]. Investment Outlook - The report anticipates that Gree's net profit will grow significantly over the next few years, with projected figures of 31.44 billion, 34.06 billion, and 36.96 billion yuan for 2024, 2025, and 2026 respectively. The corresponding price-to-earnings ratios are expected to be 8.00, 7.38, and 6.80 times [101].