Investment Rating - The investment rating for the company is "Buy" (maintained) [1][9] Core Views - The company is expected to experience short-term performance recovery and long-term growth in its OEM share, despite facing temporary pressure on its Q2 2025 performance due to tariff disruptions [5][6] - The overseas production capacity is ramping up faster than peers, which is anticipated to support revenue recovery in the coming quarters [5][6] Financial Performance Summary - In Q1 2025, the company's revenue was 1.32 billion yuan, showing a year-on-year increase of 21.3%, while Q2 2025 revenue was 1.067 billion yuan, reflecting a modest year-on-year growth of 2.8% [5] - The net profit attributable to the parent company for Q1 2025 was 81 million yuan, down 5.0% year-on-year, and for Q2 2025, it was 30 million yuan, down 75.6% year-on-year [5] - The company has adjusted its profit forecasts for 2025-2027, now expecting net profits of 357 million, 454 million, and 551 million yuan respectively, with corresponding EPS of 0.96, 1.22, and 1.48 yuan [5][8] Business Segment Performance - In H1 2025, the revenue from the home appliance OEM business was 1.74 billion yuan, up 6.0% year-on-year, while the automotive parts revenue was 280 million yuan, up 90% year-on-year [6] - The home appliance OEM business faced challenges due to tariffs, particularly affecting orders from TTI and HOT, while SharkNinja maintained growth due to earlier capacity transfers [6] Margin Analysis - The gross margin for Q1 2025 was 15.8%, and for Q2 2025, it dropped to 12.3%, reflecting a year-on-year decline of 1.6 and 5.6 percentage points respectively [7] - The net profit margin for Q1 2025 was 8.1%, decreasing by 2.2 percentage points year-on-year, and for Q2 2025, it fell to 2.8%, down 9.0 percentage points year-on-year [7] Valuation Metrics - The current price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are projected to be 18.3, 14.4, and 11.9 respectively [5][8] - The company’s total market capitalization is approximately 8.515 billion yuan, with a circulating market capitalization of the same amount [2]

Core Insights - The article highlights the surprising financial performance of Whirlpool China, which has shifted its focus to overseas OEM (Original Equipment Manufacturer) production, resulting in a significant increase in profits despite a decline in revenue [1][8][19] Financial Performance - In the first half of the year, Whirlpool China reported a net profit of 205 million, a staggering increase of 559% year-on-year. The adjusted net profit reached 194 million, soaring by 857% [1] - For the year 2024, total revenue is projected to be 3.65 billion, a decrease of 8.85%, while net profit is expected to reach 202 million, an increase of 148% [4] Business Strategy - The company has closed 70% of its domestic offline stores and reduced its e-commerce operations by 64% to cut losses [11] - Whirlpool's overseas revenue now accounts for 93.85% of its total, with domestic revenue plummeting by 77% to only 12.5 million [8] - The company has focused on large clients, with the top five customers accounting for 90% of its orders [8] Operational Efficiency - Significant improvements in operational efficiency have been noted, including a reduction in preparation time from 3 hours to 20 minutes and a decrease in workforce from 120 to 30 in the sheet metal line [14] - Cost control measures have led to substantial savings, with a projected cost reduction of over 120 million in 2024, equivalent to selling an additional 200,000 microwave ovens [14] Product Innovation - Whirlpool has developed innovative products tailored to specific markets, such as a 1.618-meter ergonomic washing machine and a -30°C freezer designed for American households [16] - The company has shifted its focus from producing globally uniform products to region-specific designs, catering to the preferences of different markets [18] Market Position and Risks - Whirlpool's reliance on a few major clients poses a risk, with the largest client accounting for 73.5% of orders, and a significant decline in microwave oven sales by 45% [18] - The company is actively seeking new clients in Eastern Europe, but acknowledges that the transformation process will take time [19] - The competitive landscape is tightening, with Southeast Asian factories undercutting costs, posing a threat to Whirlpool's market position [18]