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].

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]

Group 1 - Air conditioning consumption has surged since June, driven by the "trade-in" policy and high temperatures, with leading companies ramping up production [1] - Sales of new energy-efficient air conditioners increased by 82% year-on-year from late June to early July, while Midea Group reported a 37.09% increase in installation volume from May 1 to July 6 [1] - Exports of air conditioners, particularly Midea's Solstice series, have seen strong sales in Europe, with a 30% year-on-year increase in air conditioner sales in Europe [1] Group 2 - The National Development and Reform Commission announced a new round of "trade-in" subsidies to be issued in July, which is expected to boost demand in the third quarter [2] - Experts indicate that the air conditioning industry is at a critical transition period, with a focus on refined operations, product upgrades, and channel restructuring as key competitive factors [2] Group 3 - Manufacturers are accelerating transformation, with energy efficiency, health, and smart features becoming standard [3] - Companies are exploring new sales channels, including live e-commerce and targeting lower-tier markets, while enhancing inventory management and flexible supply chains [3] - Experts suggest that companies should collaborate across product, channel, and marketing strategies to shift from quantity expansion to quality improvement, building long-term resilience and core competitiveness [3]

Group 1 - Gree Electric Appliances has a strong global presence, with products available in over 190 countries and regions, emphasizing its slogan "Let the world love Chinese manufacturing" [5][10][19] - The company has been focusing on high-quality products and has established a reputation for reliability, particularly in regions with extreme climates like the Middle East [8][12][28] - Gree's strategy is to maintain high product quality and avoid low-quality, low-price products, which aligns with the broader goal of high-quality development [13][14][28] Group 2 - Gree's overseas revenue is projected to grow by 13.25% in 2024, driven by consistent product quality and understanding consumer needs [23][25] - The company views its current perceived shortcomings in overseas market share as future growth opportunities, emphasizing the importance of brand strength and product quality [25][26] - Gree's approach to international markets is characterized by a commitment to its brand, with over 80% of its overseas products bearing the Gree trademark [20][21] Group 3 - The "Dong Mingzhu Health Home" initiative aims to expand Gree's product offerings beyond air conditioning, with plans to open 3,000 stores by 2025 [30][34] - The concept of "Dong Mingzhu Health Home" is designed to create a family-oriented shopping experience, enhancing consumer engagement with Gree's diverse product range [43][44] - Gree's innovative products, such as the AI energy-saving chip, reflect the company's commitment to authenticity and quality, distinguishing it from competitors [46][47]