Core Insights - Hisense Home Appliances released its first half-year report for the home appliance industry, showing revenue of 49.34 billion yuan and a net profit of 2.077 billion yuan, with year-on-year growth of 1.44% and 3.01% respectively [1] Financial Performance - Total revenue for the reporting period was 49.34 billion yuan, compared to 48.64 billion yuan in the same period last year, reflecting a growth of 1.44% [1] - Revenue breakdown by industry shows manufacturing at 45.70 billion yuan (92.62% of total revenue), up 4.98% from 43.53 billion yuan [1] - Revenue by product indicates air conditioning sales at 23.69 billion yuan (48.02% of total revenue), an increase of 4.07%, while washing machines and refrigerators generated 15.39 billion yuan (31.20%), up 4.76% [1] Regional Performance - Domestic revenue was 25.25 billion yuan (51.17% of total), slightly down by 0.31% from the previous year, while overseas revenue reached 20.45 billion yuan (41.45%), marking a growth of 12.34% [2] Management Changes - The company announced the resignation of President Hu Jianrong and Director Zhu Dan due to personal reasons and work adjustments, respectively [2] - Chairman Gao Yuling will take over as President, while Yin Bitong, a former executive from Midea Group, has been appointed as a representative director [2][3] Strategic Developments - Yin Bitong's entry into the board reflects Hisense's emphasis on leveraging his experience from Midea Group to enhance its operations [4] - Hisense and Midea Group signed a strategic cooperation agreement in May, focusing on AI applications and advanced manufacturing [4] Business Challenges - In the second quarter, Hisense's revenue was 24.5 billion yuan, down 2.6% year-on-year, with a net profit of 949 million yuan, down 8.25% [5][7] - The air conditioning business generated 23.7 billion yuan in revenue, up 4.07%, while the washing and refrigeration segment saw a revenue of 15.4 billion yuan, also up 4.76% [7] - The domestic central air conditioning market capacity declined by 15.9%, while the retail sales of home air conditioners increased by 24.9% [7]

Investment Rating - The report maintains a positive outlook on the home appliance sector, highlighting the potential for growth driven by favorable policies and market dynamics [6][7]. Core Insights - The report emphasizes three main investment themes: the white goods sector, export opportunities, and core components, suggesting a robust growth trajectory for these areas [7]. - Recent developments include a strategic cooperation agreement between Midea Group and Hisense Group, focusing on AI applications and advanced manufacturing [6][14]. - The report notes a significant increase in sales and prices for air conditioners and kitchen appliances, indicating a strong market demand [4][5][33][35]. Summary by Sections 1. Market Performance - The home appliance sector underperformed compared to the CSI 300 index, with a slight increase of 0.1% in the sector index while the CSI 300 rose by 3.3% [6][8]. - Key companies such as Huaxiang Co. and Rongtai Health showed significant gains, while others like Hisense Vision and XGIMI faced declines [10]. 2. Industry Dynamics - The US-China trade agreement resulted in a temporary suspension of 24% tariffs for 90 days, which is expected to benefit the home appliance sector [6][13][59]. - The report highlights the importance of the real estate market's recovery for the white goods sector, with a projected increase in production [7][42]. 3. Sales Data - In April 2025, online sales of air conditioners reached 3.36 million units, a year-on-year increase of 39.2%, while offline sales were 537,000 units, up 9.6% [4][33]. - For kitchen appliances, online sales of range hoods increased by 15.6% to 430,000 units, and offline sales rose by 31.0% to 99,000 units [5][35]. 4. Component Sales - The report indicates a 9.7% year-on-year increase in the sales of rotary compressors, with a total of 31.4 million units sold in March 2025 [23][27]. - The sales of electronic expansion valves also saw a significant increase of 18.4% year-on-year [25]. 5. Macroeconomic Environment - As of May 16, 2025, the USD to CNY exchange rate was reported at 7.1938, reflecting a slight increase of 0.08% since the beginning of the year [41]. - The report notes a 20.21% year-on-year increase in the sales area of residential properties, indicating a positive trend in the real estate market [42].