Core Insights - Suning.com achieved a revenue of 25.895 billion yuan in the first half of 2025, representing a year-on-year growth of 0.44% [1] - The net profit attributable to shareholders reached 48.693 million yuan, showing a significant year-on-year increase of 230.03% [1] Revenue and Profit Performance - The company reported a sales revenue growth of 11.7% in its stores during the first half of the year [1] - Comparable store sales in the home appliance and 3C home living specialty stores increased by 14.45%, with comparable store efficiency improving by 11.12% [1] Market Strategy and Expansion - Suning.com opened and renovated 37 SuningMax and SuningPro stores in first-tier and second-tier markets to enhance store image and consumer experience [1] - The company expanded its retail cloud franchise stores, opening 297 new stores in the second quarter, bringing the total number of retail cloud franchise stores to 10,100 as of June 30, 2025 [1] Competitive Positioning - The company aims to leverage the trade-in market opportunities and adapt to changes in consumer behavior by enhancing product variety, optimizing sales network layout, upgrading consumer experience, and improving service quality [2]

Investment Rating - The report maintains a "Buy" rating for the company [3][35]. Core Views - The company is expected to benefit from an increase in demand for kitchen appliances, particularly due to government subsidies and a shift towards renovation and replacement needs in the housing market [6][25][26]. - The company has a strong market position in the kitchen appliance sector, with leading market shares in key product categories such as range hoods and gas stoves [6][7][25]. - Financial forecasts indicate a gradual recovery in revenue and profit margins, with projected net profits of 1.61 billion, 1.74 billion, and 1.86 billion yuan for 2025, 2026, and 2027 respectively [36][35]. Financial Performance Summary - For the first half of 2025, the company reported revenue of 4.61 billion yuan, a year-on-year decrease of 2.6%, with net profit at 710 million yuan, down 6.3% [6][17]. - The revenue breakdown shows that range hoods and gas stoves accounted for 73% of total revenue, with respective revenues of 2.21 billion and 1.16 billion yuan [7][17]. - The company’s gross margin improved to 50.4% in the first half of 2025, up 1.6 percentage points year-on-year [17]. Market Dynamics - The kitchen appliance market is experiencing a recovery driven by government subsidies, with retail sales of range hoods and gas stoves increasing by 11.8% and 10.1% respectively in the first half of 2025 [25][26]. - The report highlights a shift in demand from new housing to renovation and replacement, as the proportion of renovation projects increases [6][25]. - The competitive landscape is intensifying, particularly in online sales channels, leading to price reductions in key product categories [25][26]. Future Outlook - The company is expected to achieve revenue growth of 11.58 billion, 12.11 billion, and 12.70 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits projected to grow steadily [36][35]. - The report emphasizes the company's strong cash position, with cash and cash equivalents amounting to 8.24 billion yuan, representing 42% of its market capitalization [6][35].

Investment Rating - The report maintains a "Buy" rating for the company [3][35]. Core Views - The company is expected to benefit from an increase in demand for kitchen appliances, particularly due to government subsidies and a shift towards renovation and replacement needs in the housing market [6][25][26]. - The company holds a leading position in the kitchen appliance market, with significant market shares in both offline and online retail channels [7][8]. - The financial outlook shows a gradual recovery in revenue and profit margins, with projected earnings per share (EPS) increasing from 1.67 yuan in 2024 to 1.97 yuan in 2027 [36][35]. Financial Performance Summary - **Revenue Forecast**: - 2024A: 11,213 million yuan - 2025E: 11,578 million yuan - 2026E: 12,113 million yuan - 2027E: 12,702 million yuan - Revenue growth rates are projected to be modest, ranging from 0.1% in 2024 to 4.9% in 2027 [36]. - **Net Profit Forecast**: - 2024A: 1,577 million yuan - 2025E: 1,607 million yuan - 2026E: 1,740 million yuan - 2027E: 1,861 million yuan - The net profit growth rate is expected to recover from a decline of -9.0% in 2024 to a growth of 6.9% in 2027 [36]. - **Earnings Per Share (EPS)**: - 2024A: 1.67 yuan - 2025E: 1.70 yuan - 2026E: 1.84 yuan - 2027E: 1.97 yuan - Corresponding price-to-earnings (PE) ratios are projected to decrease from 11.86 in 2024 to 10.05 in 2027 [36]. Market Position and Trends - The company has maintained its leading market share in the kitchen appliance sector, with offline retail market shares of 31.2% for range hoods and 31.4% for gas stoves in the first half of 2025 [6][7]. - The overall kitchen appliance market is showing signs of recovery, driven by government subsidies and a shift in consumer demand towards more affordable products [25][26]. - The company is adapting to market changes by introducing new product lines to meet the rising demand for cost-effective kitchen appliances [6][25].

Core Viewpoint - The report from China Galaxy Securities indicates that while the retail sales of household appliances and audio-visual equipment in July maintained a high growth rate of 28.7% year-on-year, the growth rate has slowed down compared to previous months. The market remains active, but traditional appliance leaders are experiencing stagnation, while technology-related consumer companies are performing better [1]. Group 1: Retail Sales and Market Trends - In July, the retail sales of household appliances and audio-visual equipment grew by 28.7% year-on-year, but the growth rate has slowed compared to May and June [1]. - The national subsidy program's impact has weakened, with some regions pausing subsidies in July. The third batch of subsidy funds amounting to 69 billion yuan has been allocated, with a fourth batch expected in October [1]. - Retail sales growth for household appliances is expected to cool down, particularly due to high base effects from last year when national subsidies significantly stimulated demand [1]. Group 2: Air Conditioning Market - In July, the domestic air conditioning shipment volume increased by 14.3% year-on-year, exceeding market expectations, primarily driven by hot weather [2]. - The price war during the 618 shopping festival has ended, leading to a recovery in prices, with the average retail price reaching 2,632 yuan per unit in July, an increase of 8.3% from June [2]. - Production data indicates a cautious market outlook for air conditioning, with expected year-on-year declines in production for August, September, and October due to high base effects from last year [2]. Group 3: Black Electronics Market - Global TV shipment volumes showed a mixed performance, with a year-on-year increase of 0.7% in Q1 and a decrease of 3.5% in Q2 of 2025. The overall market is expected to decline by 1.7% in 2025 [3]. - Chinese brands are gaining market share globally, particularly in the Mini LED TV segment, with TCL and Hisense achieving a global shipment share of 14.7% in Q2 2025 [3]. - Emerging product categories such as gaming monitors and AI glasses are experiencing rapid growth, indicating a structural upgrade in the black electronics market [3]. Group 4: Cleaning Appliances Market - The cleaning appliance market continues to show high growth, with online retail sales of robotic vacuum cleaners and floor washers increasing by 53.8% and 36.3% year-on-year in July, respectively [4]. - Companies like Dreame and Roborock are shifting their competitive strategies to focus on profitability, leading to an improved market competition landscape [4]. - Chinese brands are rapidly increasing their market share overseas, with significant growth in app downloads for brands like Dreame and Roborock [4]. Group 5: Export Performance - The export value of household appliances has shown a declining trend, with year-on-year decreases of 8.8%, 9.0%, and 3.8% in May, June, and July, respectively, reflecting the impact of US-China trade tensions [5]. - Companies with production capacity in Southeast Asia are at a competitive advantage, while others face pressure on profit margins due to late-stage capacity expansion [5]. - The long-term outlook for the Chinese household appliance industry remains positive, with major players establishing global supply chains and a likely recovery in overseas business by 2026 [5].

Core Viewpoint - Suning is aggressively expanding its offline presence despite its ongoing financial struggles, aiming for comprehensive profitability by 2025 through the opening of large retail stores and leveraging government subsidies [2][5][7]. Group 1: Offline Expansion Strategy - Suning has opened several large stores, including the Suning Max and Suning Pro formats, with individual store sizes exceeding 40,000 square meters [3][4]. - As of June 30, Suning has established 10 Suning Max stores and over 100 Suning Pro stores nationwide, emphasizing the importance of offline sales as a foundational aspect of its business [4][6]. - The company aims to enhance customer engagement by integrating online and offline experiences, such as adding customers on WeChat for product updates [5][6]. Group 2: Financial Performance and Goals - Suning reported a net profit of 610 million yuan for 2024, marking its first annual profit since 2020, and has set a goal for comprehensive profitability by 2025 [5][6]. - The company experienced a 19.3% year-on-year increase in overall store sales revenue in Q1 2024, with comparable store sales rising by 23.3% [6]. Group 3: Impact of Government Subsidies - Government policies, such as the "old-for-new" program, have provided Suning with opportunities to boost sales of high-end appliances, with orders for such products increasing by 81% year-on-year in the first half of 2024 [7][8]. - The company has seen a significant rise in sales of high-end appliances priced above 8,000 yuan, which increased by 96% year-on-year [7]. - Despite the benefits from government subsidies, Suning faces challenges in managing cash flow and long-term store operations, particularly during subsidy policy adjustments [9][10]. Group 4: Competitive Landscape - Suning's expansion strategy is set against a backdrop of increasing competition, particularly from rivals like JD.com, which is also expanding its offline presence [10]. - The company's stock price reflects market optimism regarding its business innovations and potential for profit growth, but sustained operational vitality in its stores remains crucial for future success [10].

Core Viewpoint - The article highlights the journey of Zhu Ge, a prominent live-streaming host on Kuaishou, who has successfully transitioned from a traditional retail business to an online e-commerce model, emphasizing quality and service in the home improvement industry [1][5][12]. Group 1: Zhu Ge's Background and Transition - Zhu Ge has over a decade of experience in the home improvement industry and has been involved in Kuaishou e-commerce for eight years, amassing over 11.4 million followers [1]. - His initial foray into live streaming in May 2018 resulted in sales exceeding expectations, prompting a complete shift from offline retail to online e-commerce [5][7]. - By 2020, Zhu Ge's annual sales on Kuaishou reached 200 million yuan, significantly higher than his previous wholesale business [7]. Group 2: Business Strategy and Consumer Trust - Zhu Ge focuses on building consumer trust through transparency and quality, addressing the common pitfalls in the home improvement industry [9][12]. - He emphasizes the importance of educating consumers about product quality, often demonstrating durability and performance during live streams [11]. - The majority of his sales come from loyal customers, with new customers typically starting with smaller purchases before committing to larger items [9]. Group 3: Impact of Live Streaming on the Industry - Live streaming has expanded Zhu Ge's market reach, allowing him to cover almost the entire northern region of China, which was previously limited to the three northeastern provinces [12]. - The rise of live streaming has led to a more informed consumer base, helping to eliminate unscrupulous businesses and elevate industry standards [12]. - The government's initiatives to stimulate consumption, such as subsidies for replacing old products, have further boosted Zhu Ge's promotional efforts on Kuaishou [14]. Group 4: Future Outlook and Industry Trends - Zhu Ge's success story reflects a broader trend in the industry where quality-focused strategies are becoming more prevalent among other hosts and merchants [12]. - The competitive landscape is intensifying, with Zhu Ge expressing a commitment to maintaining high standards and continuously improving his offerings [12].

Economic Overview - In July 2025, the industrial added value for large-scale enterprises increased by 5.7% year-on-year and 0.38% month-on-month[3] - The total retail sales of consumer goods grew by 3.7% year-on-year but decreased by 0.14% month-on-month[3] - From January to July, fixed asset investment (excluding rural households) rose by 1.6% year-on-year[3] Investment Trends - Both infrastructure and manufacturing investment growth turned negative in July, with broad infrastructure down by 1.9% and narrow infrastructure down by 5.1%[4][8] - Manufacturing investment growth fell from 5.1% in June to -0.3% in July, indicating a significant decline in investment momentum[6][23] Consumption Insights - The decline in retail sales growth to 3.7% in July was primarily driven by a decrease in automobile sales and weak demand in other categories[8][9] - The effectiveness of the "trade-in" policy for stimulating consumption has weakened, with significant drops in categories like automobiles and home appliances[9][34] Employment Concerns - The urban surveyed unemployment rate increased, indicating a potential rise in youth unemployment, particularly among the 16-24 age group[4][15] - The number of college graduates in 2025 is projected to be 12.22 million, higher than the previous year's 11.79 million, raising concerns about job market saturation[4] Risks and Challenges - The current economic environment shows signs of "production stability, weak consumption, and weak investment," posing risks for the second half of the year[3] - External shocks and insufficient effective demand remain significant challenges for economic performance in the latter half of 2025[3][10]

1. 收入大beat，利润大miss：整体大数上，本季京东总营收同比大增22%，远高于市场预期的15%，实际营收比预期高出近220亿。 由此可推断，强劲增长仍是主要归功于国补的利好，而外卖带来的交叉销售至少本季度来看并不明显。 外卖大战的"导火索"——京东集团8月14日晚交付了首份能体现外卖投入影响的业绩。概括来看本季表现，可用"割裂"二字形容。 主要是主站商城业务的强劲增长（超预期约140亿）。剩下的则是因市场预期中并未考虑外卖业务的增量营收，但这些收入都会通过补贴和费用"吐回 去"，没有价值。 核心主业——商城板块收入和利润双超预期，但另一面是因外卖导致的亏损也远在预期之上，拖累集团整体经营利润直接转负，相当骇人。 但利润上，受外卖业务天量亏损拖累，集团整体本季GAAP下经营亏损了近9亿，从原本单季盈利百亿以上直接转负，利润表现又可谓极差。（净利润大 超预期主要是非经营性损益和本季税费为零的影响，意义不大）。 详细要点如下： 2. 主业商城板块收入利润双优：本季业绩的核心亮点——商城业务营收同比增长仅21%，环比明显加速，也远超预期的15%。其中通电产品的销售增速大 幅拉升到了23%，而一般商品销售增速则 ...

Core Insights - The article discusses the insights into the smartphone market for 2025, highlighting the impact of national subsidies and promotional events on consumer demand and brand competition [4][9][19]. Group 1: Market Dynamics - The smartphone market saw a surge in new model launches and sales in the first half of 2025, particularly among domestic brands, driven by national subsidies and promotional events like the 618 shopping festival [4][9]. - Active device numbers for major brands as of June 2025 are as follows: Huawei (288 million), Apple (271 million), OPPO (233 million), vivo (193 million), Xiaomi (121 million), and Honor (97 million), with year-on-year growth rates of 2.2%, 1.2%, 1.1%, 6.3%, 0.5%, and 8.6% respectively [4][11]. - The proportion of smartphones priced above 3000 yuan increased by 1.6 percentage points compared to the previous year, indicating a growing consumer preference for mid-to-high-end models [15][43]. Group 2: Brand Competition - Brands are intensifying their competition for younger users, with Xiaomi, OPPO, and vivo focusing on this demographic. As of June 2025, their market shares among users under 24 years old are 35.2%, 32.8%, and 40.7% respectively, showing year-on-year increases of 5.3%, 3.2%, and 4.8% [5][13]. - The competition among brands has shifted towards AI integration, with companies embedding AI capabilities into native services to enhance user engagement and experience [5][20][30]. Group 3: AI Integration and Ecosystem Development - The smartphone market is witnessing a trend towards AI and ecosystem integration, with AI capabilities becoming a core feature of smartphones, enhancing user interaction and functionality [23][26]. - AI applications are being utilized in various areas such as image enhancement, text creation, and efficiency improvements, becoming increasingly prevalent in daily user scenarios [26][28]. - Companies like Huawei and Xiaomi are leveraging their ecosystem advantages to promote deep interconnectivity among smart devices, enhancing user loyalty through integrated experiences [33][35]. Group 4: Marketing Strategies - As competition intensifies, smartphone brands are increasing their marketing investments, focusing on both hardware and software promotions to attract consumers [39][41]. - During the 618 shopping festival, brands employed various strategies such as price reductions and new product launches to capture consumer interest, with the iPhone 16 Pro seeing a significant increase in sales after being included in the subsidy range [41][52].

Equity – Oversea Research 海通国际市场洞察系列-电商补贴混战 Barney Yao, barney.sq.yao@htisec.com Aug 2025 本研究报告由海通国际分销，海通国际是由海通国际研究有限公司，海通证券印度私人有限公司，海通国际株式会社和海通国际证券集团其他各成员单 位的证券研究团队所组成的全球品牌，海通国际证券集团各成员分别在其许可的司法管辖区内从事证券活动。关于海通国际的分析师证明，重要披露声 明和免责声明，请参阅附录。(Please see appendix for English translation of the disclaimer) 目录 1. 外卖大战各家策略分析，补贴力度 6. 风险提示 For full disclosure of risks, valuation methodologies and target price formation on all HTI rated stocks, please refer to the latest full report on our website at equities.htisec.co ...