GREE(SZ:000651) EBSCN·2025-04-28 13:13Investment Rating - The report maintains a "Buy" rating for Gree Electric Appliances (000651.SZ) with a target price of 54.10 CNY [1][7]. Core Insights - Gree Electric Appliances reported better-than-expected performance in both its 2024 annual report and 2025 Q1 report, achieving a revenue of 190 billion CNY (down 7% year-on-year) and a net profit of 32.2 billion CNY (up 11% year-on-year) for 2024. For Q1 2025, the company achieved a revenue of 41.6 billion CNY (up 14% year-on-year) and a net profit of 5.9 billion CNY (up 26% year-on-year) [4][5]. Revenue Analysis - The revenue from consumer appliances in 2024 was 148.6 billion CNY (78% of total revenue, down 4% year-on-year), with a notable decline in H2 2024 [5]. - The company’s other business revenue (raw material trading) was 20.3 billion CNY (11% of total revenue, down 33% year-on-year), indicating a focus on core business [5]. Profitability Analysis - The net profit margin improved year-on-year, with Q4 2024 and Q1 2025 net profit margins at 24.0% and 14.2%, respectively [5]. - The gross profit margin for Q4 2024 and Q1 2025 was 26.7% and 27.4%, respectively, reflecting a slight decline year-on-year [5]. Financial Health - The company reported a net cash flow from operating activities of 29.4 billion CNY in 2024, with a significant increase in Q1 2025 [6]. - Cash and cash equivalents reached over 150 billion CNY by the end of Q1 2025, marking a new high for the past year [6]. Earnings Forecast and Valuation - The report projects an increase in net profit for 2025 and 2026 to 34.7 billion CNY and 37.0 billion CNY, respectively, with a new forecast for 2027 at 40.4 billion CNY [7][9]. - The current price corresponds to a price-to-earnings (P/E) ratio of 7, 7, and 6 times for 2025, 2026, and 2027, respectively [7][21].