Core Viewpoint - The significant disparity in PE ratios among Gree Electric, Midea Group, and Haier Smart Home indicates a substantial market value gap, with Gree's market capitalization being less than half of Midea's despite being a leading player in the home appliance industry [1][2]. Group 1: Market Performance - During the "9·24" period, the Shenzhen Component Index rose by 67%, while Gree Electric's stock price only increased by 27.15%, highlighting its underperformance relative to the broader market [2]. - Gree Electric's market capitalization stands at 224 billion yuan, significantly lower than Midea Group's 568.53 billion yuan, reflecting a stark valuation difference [2]. Group 2: Business Stability - Gree Electric has maintained a stable business foundation, with its air conditioning and consumer electronics segments generating over 100 billion yuan in revenue, which constitutes its core competitive advantage [3][4]. - The air conditioning business has shown a compound annual growth rate (CAGR) of 8.66% from 2020 to 2023, indicating consistent growth [4]. Group 3: Financial Metrics - Gree Electric's net profit has grown at a CAGR of 9.76% since 2020, outpacing revenue growth, which stands at 2.75%, demonstrating high profitability quality [7]. - The company's asset-liability ratio has remained stable, with a peak of 71.30% in 2022, but has since decreased to 61.55% in 2024, indicating improved financial health [10]. Group 4: R&D and Innovation - Gree Electric has consistently increased its R&D investment, maintaining a spending rate of 3%-4% of revenue, which supports its competitive positioning [11][13]. - The company has launched innovative products, such as those featuring AI dynamic energy-saving technology, which have seen significant sales growth, indicating a strong focus on product development [14]. Group 5: Market Position and Growth Potential - Gree Electric holds a 23.44% market share in online air conditioning sales, slightly below Midea's 24.06%, but has shown strong monthly performance, surpassing Midea in August [5]. - The increasing temperatures and rising disposable incomes are expected to drive further demand for air conditioning, suggesting potential growth opportunities for Gree Electric [16][17]. Group 6: Valuation Discrepancy - Gree Electric's PE ratio is only half that of Midea and Haier, raising questions about the market's perception of its growth potential compared to its competitors [19]. - Despite having a higher return on invested capital (ROIC) than its peers, Gree Electric's market valuation does not reflect its superior profitability, indicating a potential undervaluation [19].

Group 1 - Gree Electric achieved a total operating revenue of 97.325 billion yuan in the first half of 2025, with a net profit attributable to shareholders of 14.412 billion yuan, representing a year-on-year increase of 1.95% [1] - The net profit after deducting non-recurring gains and losses was 13.946 billion yuan, showing a year-on-year growth of 0.59% [1] - The net cash flow from operating activities reached 28.329 billion yuan, a significant increase of 453.06% year-on-year [1] Group 2 - Gree Electric's industrial products and green energy segment achieved operating revenue of 9.591 billion yuan, a substantial year-on-year increase of 17.13% [2] - The smart equipment segment generated operating revenue of 314 million yuan, reflecting a year-on-year growth of 20.90% [2] - The company is actively promoting a "new retail" system that integrates online and offline sales, with online live-streaming sales exceeding 5 billion yuan in the first half of the year [2] Group 3 - The air conditioning sector is identified as a high-quality sub-sector within the home appliance industry, benefiting from dual barriers in consumption and manufacturing [3] - The industry enjoys long-term growth potential, with significant room for improvement in both domestic sales and international penetration rates [3] - Product upgrades driven by smart technology and functional innovation are becoming key growth engines for the industry [3]

Core Insights - Gree Electric achieved a revenue of 97.325 billion yuan in the first half of the year, a year-on-year decrease of 2.46%, while net profit reached 14.412 billion yuan, an increase of 1.95% [1] - The net cash flow from operating activities significantly increased by 453.06% to 28.329 billion yuan, driven by higher cash receipts from sales and a decrease in cash payments related to operating activities [1] Company Performance - Sales of household air conditioners, refrigerators, and washing machines grew by 8.3%, 3.7%, and 8.8% respectively, while central air conditioning sales declined by 5.5%, with domestic sales down by 10.1% due to weak project markets and real estate adjustments [1] - The competition in the household air conditioning market intensified, with low-end air conditioner sales (priced below 2,100 yuan) exceeding 50% for the first time, putting pressure on mid-to-high-end demand [1] Product Development - Gree Electric is focusing on product upgrades around the themes of "green low-carbon, comfortable health, and personalized intelligence," with the "Wind Does Not Blow People" series seeing a 131% increase in sales, and products featuring self-developed "AI Dynamic Energy-Saving Technology" experiencing a 360% sales increase [1] - In the central air conditioning market, Gree aims to maintain a leading position with over 15% market share by the first half of 2025, launching new products like the "AI Wide Domain Energy-Saving" GMV9 series [2] Expansion and Innovation - The company is accelerating its expansion in the home appliance sector with new products such as zero-embedded refrigerators and advanced washing machines, while the industrial sector has become a new growth engine with a 20.90% increase in revenue from smart equipment [2] - R&D investment reached 3.892 billion yuan, a 7.05% increase, with a total of 131,921 patent applications, including 72,339 invention patents [2] Market Presence - Gree's overseas revenue grew by 10.19%, with its own brand accounting for nearly 70% of total exports, achieving significant market shares in regions like the Middle East, Eastern Europe, and Brazil [2] - The company has upgraded over 800 "Dong Mingzhu Healthy Home" stores and achieved over 5 billion yuan in sales through live e-commerce [2]