Guotou Securities·2024-04-30 02:30Investment Rating - The investment rating for Haier Smart Home is "Buy - A" with a target price of 34.51 CNY for the next six months, which corresponds to a PE valuation of 17x for 2024 [3][7]. Core Insights - Haier Smart Home reported a revenue of 68.98 billion CNY for Q1 2024, representing a year-over-year increase of 6.0%, and a net profit attributable to shareholders of 4.77 billion CNY, up 20.2% year-over-year [1]. - The company's domestic revenue grew by 8.1% year-over-year, with significant growth in home appliances, kitchen appliances, and smart building sectors, all exceeding 10% [1]. - The gross margin for Q1 2024 was 29.0%, an increase of 0.3 percentage points year-over-year, driven by digital transformation in procurement and R&D, as well as product structure improvements [1]. - The net profit margin for Q1 2024 was 6.9%, up 0.8 percentage points year-over-year, attributed to improved efficiency and cost management [1]. - Operating cash flow for Q1 2024 increased to 1.72 billion CNY, reflecting enhanced operational efficiency and profit growth [1]. Financial Performance Summary - The projected revenue for Haier Smart Home is expected to grow from 243.51 billion CNY in 2022 to 315.29 billion CNY by 2026, with a compound annual growth rate (CAGR) of approximately 7.0% [8]. - The net profit is projected to increase from 14.71 billion CNY in 2022 to 23.86 billion CNY by 2026, indicating a strong growth trajectory [8]. - The earnings per share (EPS) is expected to rise from 1.56 CNY in 2022 to 2.53 CNY by 2026, reflecting a positive outlook for shareholder returns [8]. - The return on equity (ROE) is projected to improve from 15.7% in 2022 to 17.1% by 2026, indicating enhanced profitability and efficiency [8]. Market Position and Strategy - Haier's management has shown confidence in long-term performance through an employee stock ownership plan, which aims for a compound annual growth rate of at least 15% in net profit for 2024 and 2025 [2]. - The company is focusing on expanding its market share in overseas markets, particularly in the segments of dryers, air conditioners, and small appliances, which are expected to drive domestic growth [2].