GREE(SZ:000651) HTSC·2025-08-29 07:15Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 56.07 [7][8] Core Views - The company's main business has slightly declined, but diversification and dividends support its valuation [1] - The short-term industry fluctuations do not alter the company's long-term resilience due to its leading position in supply chain integration and channel management [1] - The company continues to push for diversification in its business, including industrial products and green energy, while providing high dividends to shareholders [1] Summary by Sections Financial Performance - For the first half of 2025, the company reported total revenue of RMB 976.19 billion, a year-on-year decrease of 2.66%, and a net profit attributable to shareholders of RMB 144.12 billion, an increase of 1.95% [1] - In Q2 2025, revenue decreased by 12.11% year-on-year, and net profit decreased by 10.07% year-on-year, primarily due to fluctuations in online prices of household air conditioners and weak demand for central air conditioning [1][2] Business Segments - The consumer electronics segment saw a revenue decline of 5% year-on-year, influenced by price fluctuations and a drop in demand for central air conditioning [2] - The company reported a slight increase in household air conditioner shipments, with a 4.1% year-on-year growth in H1 2025 [2] - The industrial products and green energy segments showed strong growth, with revenues of RMB 9.59 billion (up 17% year-on-year) and RMB 310 million (up 20.9% year-on-year), respectively [3] Profitability and Margins - The company's gross margin for H1 2025 was 28.71%, a decrease of 1.02 percentage points year-on-year, with the consumer electronics segment's gross margin down by 0.29 percentage points [4] - The company has optimized its expenses, with a decrease in the expense ratio by 0.86 percentage points year-on-year [4] Earnings Forecast - The report maintains earnings per share (EPS) forecasts for 2025, 2026, and 2027 at RMB 6.23, RMB 6.71, and RMB 7.12, respectively [5] - The average price-to-earnings (PE) ratio for comparable companies is projected at 11x for 2025, while the company is assigned a PE of 9x, reflecting pressure on its consumer electronics performance [5]