2025-06-26 15:51Summary of Hisense Home Appliances Conference Call Company and Industry Overview - Company: Hisense Home Appliances - Industry: Home Appliances, specifically focusing on air conditioning and related products Key Points and Arguments 1. Pressure on Air Conditioning Profit Margins: In May-June 2025, air conditioning profit margins were under pressure due to price competition in the low-end market, leading to a year-on-year decline in domestic air conditioning profit margins. However, significant relief in revenue and profit margin pressure is expected in Q3 2024 [2][5][10] 2. Integration of Air Conditioning Division: Hisense is advancing the integration of its air conditioning division, which includes resource integration in marketing and product development. This is expected to enhance efficiency, although challenges exist due to the legal structure of joint ventures [2][6][7] 3. Impact of U.S. Tariffs: The imposition of tariffs on appliances exported to the U.S. has had a limited impact on Hisense, as the North American market accounts for less than 10% of overall sales. The company’s overseas business growth remains better than the domestic market [2][8][10] 4. Growth in European Market: There is an increasing demand for heat pumps in Europe, contributing to product structure upgrades. The "Brilliant" series is benefiting from subsidies in the mid-to-high-end market, with revenue nearing 5% of total domestic sales [2][12] 5. Challenges in the Central Air Conditioning Market: The shrinking of the refined decoration market has negatively impacted the central air conditioning business, although there is slight growth in non-real estate public construction projects. The C-end market is facing intensified competition [2][14] 6. Performance of Washing Machines: The washing machine segment, while smaller in revenue contribution, is experiencing the fastest growth, with GMV increasing over 50% during the 618 shopping festival in 2025 [4][20] 7. Future Growth Potential: Hisense's future growth potential lies in system efficiency integration and channel collaboration, particularly between home appliances and central air conditioning channels [2][25][26] 8. Investment in New Business Areas: The company is actively expanding into smart building management systems, energy storage, and data centers, with plans to increase production capacity in ASEAN regions to meet local demand [3][16][22] 9. Challenges in Export Markets: The growth rate in developing markets has slowed down to single or double digits, contrasting with previous growth rates of 30-40% [9][10] 10. Stock Valuation and Dividend Policy: The current stock price is at a historical low, with a dividend of 1.23 CNY per share approved, indicating a relatively high dividend yield in the consumer goods sector [27] Other Important but Overlooked Content - Brand Positioning: Hisense is maintaining a high-end brand image in overseas markets, particularly in ASEAN, which is crucial for future growth [11][12] - Market Dynamics: The air conditioning market is experiencing a price competition cycle, but it is expected to be shorter than previous cycles, with a potential recovery in prices anticipated in Q3 2025 [24] - Strategic Partnerships: The company is exploring potential collaborations with Bosch Group post-shareholder changes, which could lead to new cooperative opportunities [13]