Investment Rating - The investment rating for Hisense Home Appliances is maintained at "Buy" [7] Core Views - The company reported a revenue of RMB 87.93 billion for 2025, a decrease of 5.19% year-on-year, and a net profit attributable to shareholders of RMB 3.19 billion, down 4.82% year-on-year. The decline in total revenue was primarily due to a significant drop in other business income [1] - Despite the overall revenue and profit pressure, the core business showed resilience, with cash flow from operating activities improving by 12.94% year-on-year [1] - The company continues to pay dividends, distributing RMB 12.65 per 10 shares [1] Summary by Sections HVAC Business - The HVAC segment remains the largest revenue source, generating RMB 38.83 billion in 2025, down 3.61% year-on-year, with a gross margin of 27.43%, a decrease of 1.12 percentage points [2] - The company holds over 23% market share in the domestic multi-split air conditioning market, maintaining industry leadership despite weak real estate and public construction projects [2] - Domestic sales of household air conditioners increased by 9.6%, outperforming the industry growth rate by 8.9 percentage points [2] Refrigeration and Washing Business - The refrigeration and washing segment achieved revenue of RMB 31.20 billion in 2025, an increase of 1.16% year-on-year, with a gross margin of 17.63%, up 0.07 percentage points [3] - The company is focusing on product upgrades in health preservation and vacuum preservation, with market share in refrigerator retail rising to 17.0% [3] - The washing machine segment has seen rapid growth in global revenue, supported by new product launches [3] Profitability - The overall gross margin for the company in 2025 was approximately 21.3%, an increase of 0.53 percentage points, driven by a faster decline in costs compared to revenue [4] - The total expense ratio increased by 0.65 percentage points, primarily due to a rise in financial expenses [4] Future Outlook - EPS forecasts for 2026 and 2027 have been adjusted to RMB 2.66 and RMB 2.94, respectively, reflecting a downward revision of 8.3% and 9.7% [5] - The target price for A-shares is set at RMB 26.60, based on a 10x PE ratio for 2026 [5]