2025-05-22 15:23Summary of Hisense Home Appliances Conference Call Company Overview - Company: Hisense Home Appliances - Date: May 22, 2025 Key Industry Insights - Market Performance: The company expects improved operating conditions in Q2 2025, with high-end brands COLMO and new wind air conditioners performing well. The cost of bulk raw materials remains stable, supporting domestic sales profits. [2][3] - Export Markets: Orders from the U.S. market are returning to normal, while the European market, despite inventory pressures, is growing faster than the industry average. Emerging markets like ASEAN, Middle East, and South America saw over 20% growth in Q1 2025 and are expected to maintain rapid growth throughout the year. [2][5] - Central Air Conditioning Strategy: The company is adjusting its central air conditioning strategy, positioning the Hitachi brand in the high-end market to compete for market share with Daikin, while expanding the Hisense brand in public construction and new infrastructure sectors. [2][7] Financial Performance - Sales Structure: The sales structure is shifting, with low-end models dominating price competition, but high-end brands are showing strong performance. The company anticipates some support for domestic sales profits due to the sales structure. [3][4] - Profit Margins: The overseas profit margin is expected to improve by 0.5 percentage points annually, with the company aiming for a micro-profit status this year. However, the automotive parts industry is under significant pressure, which may impact overall revenue growth. [4][15] Product Development and Innovation - Data Center Cooling Systems: Hisense is actively developing data center cooling systems, with leading manufacturing capabilities in multi-connected units. The new production base for central air conditioning water machines in Changsha is expected to enhance business development. [2][6] - Product Launches: The company plans to optimize its sales structure during the 618 shopping festival, leveraging national subsidy policies to promote high-end strategies and introduce new products in segmented categories. [10][11] Competitive Landscape - High-End Market Trends: The high-end market continues to grow, driven by national subsidy policies from the previous year. Competitors like Casarte are also experiencing significant growth. [11][12] - Price Competition: The online channel is experiencing intense price competition, with brands adopting multi-brand strategies or launching popular models to cope. Long-term success will depend on product quality and durability. [13] Regional Market Dynamics - High-Line City Demand: Demand in high-line cities is weak due to the overdrawn effects of national subsidy policies, with consumers concerned about the absence of such policies this year. [12] - Emerging Market Growth: The growth in Southeast Asia and ASEAN is driven by local demand and increasing penetration rates, with significant long-term growth potential despite some risks. [16][18] Strategic Adjustments - Operational Changes: The company is not expected to make major changes to its operational direction, focusing on overseas expansion and improving domestic sales efficiency and profit margins. [14] - Response to Market Conditions: The company plans to maintain normal shipping schedules to the U.S. following the reduction in tariffs, while also addressing inventory issues in mature markets like Europe. [5][17] Conclusion Hisense Home Appliances is strategically positioning itself to capitalize on high-end market growth, optimize its product offerings, and expand its presence in emerging markets while navigating challenges in mature markets and the automotive sector. The focus on innovation and quality will be crucial for maintaining competitiveness in a rapidly evolving industry landscape.