Core Viewpoint - The home appliance industry is currently facing a market downturn, but Haier's specialty stores have achieved impressive results by breaking through the challenges [1] Group 1: Haier's Initiatives - Haier Smart Home launched the 2026 Health Renewal Festival from February 25 to 26, starting in Zhengzhou and expanding nationwide [1] - To empower Haier specialty stores, the company introduced the "Five Good Policies," focusing on good products, good policies, good experiences, good models, and good activities [1] Group 2: Product Strategy - The good products initiative is based on stable pricing and supply, creating a differentiated product layout to address the issue of product homogeneity [3] - Key product series like "Zhijing" and "Mailang" cover various consumer tiers, enhancing the competitiveness of store offerings [3] Group 3: Policy and Operational Efficiency - The good policies aim to simplify complex store policies, ensuring that incentive benefits reach the end point directly [5] - Haier Smart Home focuses on comprehensive retail TC as a core directive, unifying policy formulation and achieving instant execution to improve store operational efficiency [5] Group 4: Customer Experience and Marketing - The good experience initiative leads service upgrades through standards, helping Haier specialty stores achieve comprehensive traffic generation and efficient customer acquisition [5] - By integrating online and offline channels and utilizing platforms like Douyin and Gaode, the brand's visibility is amplified, bringing more precise customer traffic to stores [5] Group 5: Operational Model - The good model emphasizes cost reduction and efficiency enhancement through a unified warehouse TC model, providing free warehousing and delivery services [5] - This model, combined with Haier Mall, facilitates an integrated online and offline operational approach, making business operations easier for stores [5] Group 6: Marketing Activities - The good activities ensure continuous marketing for Haier specialty stores throughout the year, maintaining sales momentum [5] - A "5+3" activity matrix is established to provide full-process material support for each event, ensuring successful execution and safeguarding sales [5] Group 7: Future Developments - The 2026 Health Renewal Festival will unfold across various regions, with Haier Smart Home leveraging its smart home strategy to introduce more AI products, scenarios, and lifestyles [7] - This initiative aims to further empower the operations of Haier specialty stores [7]

Investment Rating - The investment rating for Haier Smart Home is "Outperform the Market" [5] Core Views - The company has shown a good growth trend with steady improvement in profitability, achieving a revenue of 234.05 billion (+10.0%) and a net profit of 17.37 billion (+14.7%) for the first three quarters of 2025 [1] - Domestic sales have demonstrated resilience, with a 9.5% year-on-year increase in revenue for the first three quarters, despite a 3.1% decline in the overall home appliance retail market [1][2] - The company continues to optimize costs and improve profitability, with a gross margin of 27.9% in Q3, reflecting a 0.1 percentage point increase year-on-year [2] Summary by Sections Financial Performance - For Q3 2025, the company reported a revenue of 77.56 billion (+9.5%) and a net profit of 5.34 billion (+12.7%) [1] - The operating cash flow for the first three quarters was 17.49 billion, a 26.1% increase year-on-year [2] Domestic Market - The company achieved a 10.8% year-on-year revenue growth in Q3 within China, leveraging innovative products and multi-brand marketing strategies [1] - Air conditioning revenue grew over 30% in Q3, with the Casarte brand increasing by 18% and the Leader brand by 25% [1] International Market - Overseas revenue grew by 10.5% year-on-year for the first three quarters, with significant growth in emerging markets such as South Asia (+25%) and Southeast Asia (+15%) [2] - The North American market showed steady growth despite tariff disruptions, and European HVAC revenue increased by over 30% in Q3 [2] Profitability and Cost Management - The company’s Q3 net profit margin improved by 0.2 percentage points to 6.9%, indicating effective cost management and operational efficiency [2] - The company has maintained a stable expense ratio, with sales, management, and R&D expenses decreasing slightly [2] Earnings Forecast - The profit forecast for 2025-2027 has been raised, with expected net profits of 21.3 billion, 23.7 billion, and 26.3 billion respectively, reflecting a year-on-year growth of 14%, 11%, and 11% [3][4]