GREE(SZ:000651) Western Securities·2025-06-12 01:45Investment Rating - The report gives a "Buy" rating for Gree Electric Appliances (000651.SZ) [2][4][17] Core Views - Gree Electric Appliances is positioned in a high-quality air conditioning segment, with a solid competitive advantage in the high-end price range, and is expected to benefit from industry growth and product structure upgrades, leading to stable performance growth [1][2][17] - The company is projected to achieve revenue growth rates of +8% in 2025, +5% in 2026, and +6% in 2027, with net profit growth rates of +10.1%, +7.7%, and +7.8% respectively [2][17] Summary by Sections 1. Air Conditioning: Excellent Business Model - Air conditioning is a premium sub-sector in home appliances, characterized by dual barriers in consumption and manufacturing, with significant growth potential in both domestic and international markets [1][4] - The industry enjoys long-term growth, with substantial room for penetration and a high proportion of high-end products due to historical luxury positioning [1][4] - The competitive landscape shows a clear tiering, with a stable duopoly in the high-end price segment, maintaining good profit margins [1][4] 2. Gree: Deeply Rooted in the Air Conditioning Sector - Gree's air conditioning business is a major revenue contributor, accounting for approximately 78% of total revenue, with other segments supporting the core business [53] - The company has a strong competitive edge across multiple aspects of product, research and development, and manufacturing, particularly in the high-end price range [61][62] - Gree's valuation is currently low compared to domestic and international peers, indicating potential for upward adjustment [57][58] 3. Long-term Performance Outlook - Gree is expected to maintain stable growth, with a focus on capital expenditure aimed at enhancing automation and business synergy rather than expansion [82] - The company has a high cash position and dividend payout ratio, with a projected dividend yield of 7% in 2025 [82][85] - The report anticipates that Gree will benefit from short-term catalysts such as government subsidies and improved operational momentum [17][82]