Core Viewpoint - Aux Electric Co., Ltd. officially listed on the Hong Kong Stock Exchange on September 2, marking a significant milestone in the air conditioning industry and reflecting the company's commitment to quality and innovation [1] Group 1: Industry Positioning - Aux has been recognized by Frost & Sullivan as one of the top three global sales leaders in home split air conditioners from 2018 to 2024, reinforcing its position as a leader in the air conditioning sector [3] - The company has successfully navigated market cycles and consumer upgrades, establishing a differentiated capability through a global layout, ecosystem co-construction, and full lifecycle service [3] Group 2: Innovation and Technology - Aux pioneered the "Xiao Ao Direct Sales" model, breaking traditional sales barriers and allowing high-quality products to reach users directly, optimizing the industry operation chain [5] - The company is the first in the industry to implement offline interactive voice recognition for dialects and foreign languages in air conditioners, showcasing its commitment to technological innovation [5] - Aux has achieved integration in the research and production of core components like compressors, ensuring a self-controlled industrial chain and promoting the transition from Chinese manufacturing to Chinese creation [6] Group 3: Strategic Development - Aux plans to deepen its global market presence and accelerate its multi-brand strategy, with brands like "AUX," "Hua Suan," "AUFIT," and high-end brand "ShinFlow" to meet diverse user needs [8] - The company aims to transform from an air conditioning manufacturer to a smart air solution service provider, achieving a systemic transformation in business and industrial models [8] Group 4: Future Vision - Aux is committed to leading future development with its philosophy of quality and innovation, creating original products through innovative technology, and enhancing user experience with exceptional service [10] - The company emphasizes understanding and responding to the diverse needs of users across different countries, illuminating its value path with a commitment to industrial principles [10]

Investment Rating - The report maintains an "Accumulate" rating for the company, indicating an expectation that the stock will outperform the market index by 5%-15% over the next six months [7]. Core Views - The company achieved total revenue of 128.43 billion yuan in Q1 2025, representing a year-on-year growth of 20.61%. The net profit attributable to shareholders was 12.42 billion yuan, up 38.02% year-on-year, and the net profit after deducting non-recurring gains and losses was 12.75 billion yuan, also up 38.03% year-on-year, aligning with expectations [1]. - The company is actively expanding its global production capacity and investing in its own brand development to mitigate trade risks. It operates in over 200 countries, with a low revenue share from the U.S. It has 22 R&D centers and 23 major manufacturing bases across multiple continents [5][6]. - The company is advancing its digital intelligence strategy, focusing on the application of large models and Agent technology. It has developed a language model for the home appliance sector, enhancing user interaction and control across various smart products [5]. Summary by Sections Financial Performance - In Q1 2025, the company's gross margin decreased by 1.87 percentage points to 25.45%, while the net profit margin increased by 1.45 percentage points to 9.97%, primarily due to a reduction in expense ratios [5]. - The company forecasts revenue for 2025 to be 443.97 billion yuan, with net profit expected to reach 43.02 billion yuan, translating to an earnings per share (EPS) of 5.61 yuan, corresponding to a price-to-earnings (PE) ratio of 13 times [6]. Strategic Initiatives - The company is committed to its four strategic pillars: technological leadership, direct user engagement, digital intelligence, and global expansion. It aims to enhance its R&D capabilities and maintain a leading position in the industry [5].