Core Viewpoint - The company's growth in 2024 is primarily driven by export orders, with a strong performance in core components and a deepening global capacity layout, leading to an "overweight" rating [1] Financial Performance - The company expects 2024 revenue of 9.765 billion yuan, a year-on-year increase of 11.06%, and a net profit attributable to shareholders of 1.23 billion yuan, up 10.17% year-on-year [2] - In Q4 2024, revenue reached 2.519 billion yuan, a year-on-year increase of 8.5%, with a net profit of 352 million yuan, up 22% [2] - For Q1 2025, the company reported revenue of 2.387 billion yuan, a year-on-year increase of 3.23%, but net profit decreased by 16.19% to 228 million yuan [2] Business Segments - The clean health appliances and gardening tools segment generated revenue of 5.669 billion yuan in 2024, a year-on-year increase of 10.33%, while the motor, new energy vehicle precision components, and other parts contributed 3.874 billion yuan, up 11.74% year-on-year [2] - The automotive parts business exceeded 2 billion yuan in revenue, achieving record sales and profit growth [3] - The motor business also saw double-digit growth in sales and profits, with 17 new projects secured in the automotive motor sector [3] Regional Performance - Domestic sales were 2.705 billion yuan, down 2.71% year-on-year, while exports reached 6.839 billion yuan, up 17.4% year-on-year, indicating that exports were the main growth driver [3] Cost and Margin Analysis - In Q1 2025, the company's gross margin was 23.41%, down 2.52 percentage points year-on-year, and the net margin was 9.57%, down 2.21 percentage points year-on-year [3] - The increase in financial expense ratio is attributed to a decrease in exchange gains [3] Global Capacity Expansion - The company's production base in Vietnam is expected to be completed in Q2 2025, with a capacity of over 4 million small appliances and gardening tools, and 1.8 million motors [3] - The production base in Thailand is projected to be completed in Q3 2025, with an expected annual output value of 1.4 billion yuan [3] - The company aims to deepen its overseas layout, with global capacity expected to be further released as production bases come online [3]

Core Viewpoint - Hisense Group and Midea Group have signed a strategic cooperation agreement to collaborate in areas such as AI applications, advanced manufacturing, and smart logistics, marking a significant partnership between two major players in the Chinese home appliance market [1][2][3]. Group 1: Strategic Cooperation Details - The cooperation will focus on digitalization and AI application platform development, green factories, industrial internet, and global capacity layout [1][2]. - Both companies aim to enhance supply chain collaboration and operational efficiency through this partnership, addressing the challenges of a saturated home appliance market [8][9]. Group 2: Leadership and Management - Key executives from both companies, including the chairmen and vice presidents, have extensive experience in market management and financial operations, indicating a strong focus on operational efficiency and supply chain optimization [4][5][6]. - The financial leaders of both companies have successfully implemented significant cost control measures and supply chain improvements in their respective organizations [5][6]. Group 3: Market Context and Competition - This strategic partnership is notable as it occurs amidst direct market competition between Hisense and Midea in various product categories, reflecting a complex competitive landscape in the home appliance industry [2][12]. - The collaboration is seen as a response to the need for both companies to adapt to changing market dynamics and to leverage each other's strengths in supply chain and logistics [8][15]. Group 4: Globalization and Future Prospects - The partnership will also explore global capacity layout and technological innovation, aiming to enhance international competitiveness and address global economic challenges [13][14]. - Future collaboration may include capital cooperation and deeper global strategies, particularly in response to trade risks and supply chain uncertainties [14][15].

Investment Rating - The investment rating for the company is "Buy" and is maintained [9]. Core Insights - In 2024, the company achieved operating revenue of 14.795 billion yuan, a year-on-year increase of 35.37%. The net profit attributable to the parent company was 2.304 billion yuan, up 36.18% year-on-year. In Q4 2024, the operating revenue reached 3.712 billion yuan, a significant increase of 60% year-on-year, with a net profit of 368 million yuan, up 98.55% year-on-year [2][6]. Summary by Relevant Sections Business Performance - The company continues to focus on the development of consumer hand tools and power tools in the European and American markets while also expanding its industrial tools segment. The ODM business is recovering rapidly, and the OBM business is gaining market share. In 2024, the revenue breakdown was 68.05% from consumer hand tools, 9.72% from consumer power tools, and 21.82% from industrial tools, with respective year-on-year growth rates of 40.46%, 36.53%, and 22.14% [12]. Market Expansion - The company has seen rapid revenue growth in overseas non-European and American markets, although the base is low. The Americas accounted for 63.44% of revenue, while Europe accounted for 24.64%, showing a slight decline of approximately 0.9 percentage points. Revenue from non-European markets in China doubled, reaching 6.77% of total revenue due to new product development targeting the Belt and Road Initiative [12]. Financial Performance - The company reported an investment income of 521 million yuan for the year, with Q4 investment income of 58 million yuan, an increase of 103 million yuan year-on-year. Financial expenses contributed positively to profits, totaling 130 million yuan, with exchange gains of 78 million yuan [12]. Profitability Metrics - The gross profit margin for the year was 32.01%, an increase of 0.21 percentage points year-on-year, primarily due to a 4.60 percentage point increase in OBM gross margin. However, Q4 gross margin was 30.89%, down 2.77 percentage points year-on-year [12]. Global Capacity Expansion - As of the end of 2024, the company had construction projects worth 231 million yuan, with a decrease from the beginning of the year. The company is actively expanding its production capacity in Southeast Asia, particularly in Vietnam, to mitigate tariff challenges [12]. Future Projections - The company expects to achieve net profits attributable to the parent company of 2.79 billion yuan, 3.34 billion yuan, and 3.96 billion yuan for 2025, 2026, and 2027, respectively, corresponding to P/E ratios of 10, 8, and 7 times [12].

Investment Rating - The investment rating for the company is "Buy" and is maintained [6] Core Views - In Q1 2025, the company achieved operating revenue of 3.656 billion yuan, representing a year-on-year increase of 10.59%. The net profit attributable to the parent company was 461 million yuan, up 11.44% year-on-year [2][4] Summary by Sections Company Overview - The company is actively preparing a manufacturing base in Southeast Asia to enhance its global production capacity [9] Financial Performance - The gross profit margin for Q1 2025 was 30.31%, showing a slight year-on-year decline but remaining stable compared to the previous quarter. The company continues to focus on the development of hand tools and power tools for the European and American markets while expanding into industrial tools [9] Future Outlook - The company anticipates that with the release of new production capacity in Southeast Asia, operating revenue will align with order growth. The projected net profits for 2025, 2026, and 2027 are estimated at 2.79 billion, 3.34 billion, and 3.96 billion yuan, respectively, corresponding to P/E ratios of 10, 8, and 7 times [9]