Investment Rating - The report maintains an "Accumulate" rating for the company [7][24]. Core Views - The company reported a total revenue of 49.34 billion yuan for the first half of 2025, a year-on-year increase of 1.44%, while the net profit attributable to the parent company was 2.077 billion yuan, up 3.01% year-on-year. However, the second quarter saw a decline in revenue and net profit, with a year-on-year decrease of 2.6% and 8.25%, respectively, primarily due to weak performance in the central air conditioning segment and increased asset impairment [1][2][3]. Summary by Sections Financial Performance - In the first half of 2025, the company's central air conditioning business faced pressure, with revenue from the subsidiary Hisense Hitachi declining by 6% year-on-year to 10.66 billion yuan, and net profit down by 4.9% to 1.86 billion yuan. Domestic sales of central air conditioning dropped by 15.9%, while external sales showed a growth of 24.9% [2][3]. - The home air conditioning segment performed positively, with a revenue increase of approximately 14% year-on-year. The company’s ice washing business also saw a modest revenue growth of 4.8% [3][4]. Profitability and Margins - The gross margin for the first half of 2025 was reported at 21.48%, an increase of 0.69 percentage points year-on-year, driven by improved overseas margins and rising margins in the ice washing segment [4][5]. - The report indicates a slight increase in expense ratios due to sports marketing and foreign exchange fluctuations, with the expense ratio rising by 0.51 percentage points year-on-year [4]. Future Outlook - The company forecasts net profits attributable to the parent company of 3.75 billion yuan, 4.20 billion yuan, and 4.70 billion yuan for 2025, 2026, and 2027, respectively. The report suggests that the company will benefit from the release of replacement demand and its strong brand presence [5][21]. - The target market capitalization is set at 490.98 billion yuan, with a target price of 35.42 yuan for A-shares and 30.62 HKD for H-shares, reflecting a valuation discount due to exchange rate and market volatility risks [5][24].

Core Viewpoint - Company expects revenue and profit growth of over 20% in 2025 despite external uncertainties, driven by product structure optimization and steady growth in key categories like smartphones and PCs [5][6] Financial Performance - In 2024, company achieved revenue of 109.878 billion yuan, a year-on-year increase of 28.76% [5] - Company maintains a globalized product layout with approximately 50% of revenue from overseas markets, including about 10% from products sold indirectly to the U.S. [5][6] Business Strategy - Company is advancing a "China + VMI" global manufacturing strategy, establishing a dual supply system with core domestic bases and overseas VMI bases [5][6] - Domestic manufacturing bases are primarily located in Dongguan and Nanchang, while overseas bases are in Vietnam, Mexico, and India [5] Automotive and Robotics Business - Automotive electronics and robotics are emerging sectors for the company, currently in the investment phase [7] - Company anticipates reaching breakeven in automotive electronics within two to three years, with ongoing progress in product development and client acquisition [7][8] - For robotics, a specialized team is being formed, with plans to complete team building by 2025 and develop a robotics R&D model [8][9] Market Position - Company has received recognition for its capabilities in automotive-grade manufacturing, positioning itself as an industry leader [7] - The acquisition of a cleaning robot company, now named Guangdong Haokin Robot Technology Co., Ltd., aims to enhance the company's presence in the robotics sector [9][10] - Company is optimistic about the growth potential in industrial and health care robots, focusing on building core competencies in these areas [11]