2025-12-25 02:43Summary of Hisense Home Appliances Conference Call Company Overview - Company: Hisense Home Appliances - Industry: Home Appliances Key Points Industry and Market Conditions - The fourth quarter of 2025 continues to face operational pressures due to the decline of national subsidies and high base effects from the previous year. However, some product categories are seeing a rebound in price indices, leading to slight improvements in profit margins. The overseas market is undergoing inventory destocking, with expectations for order recovery in December and early next year [2][3][4]. Product and Business Development - The newly launched water-based paint factory in Changsha is expected to enhance the central air conditioning business and improve processing depth, aiding in order growth in the mature markets of Europe and America. Currently, water machine products account for about 5% of total revenue, with positive outlooks for the water-cooled and liquid-cooled market trends [2][5]. - Hisense is exploring aluminum alternatives to copper to mitigate the impact of rising copper prices, with some experience in overseas markets. The domestic market will require consideration of technology maturity and consumer acceptance [2][6]. Strategic Focus and Brand Development - The company anticipates that the effects of subsidy exhaustion will be less severe than historical policies. Hisense is focusing on building core competencies and brand recognition in the post-subsidy era, targeting consumer segments with products like fresh air conditioners and embedded refrigerators to gain competitive advantages [2][7]. - The competitive landscape in the air conditioning market is expected to shift in 2026, with leading companies focusing more on core capabilities and brand image enhancement. Hisense aims to strengthen its competitive edge to perform better in the post-subsidy environment [2][8]. Operational Efficiency and Market Strategy - Hisense plans to maintain profitability in the processing sector while expanding market share in emerging markets. The company is integrating resources from Nantong, Hisense Hitachi, and Jiakang to improve overall efficiency and reduce ineffective SKUs [2][9]. - The air conditioning division has faced operational pressures in 2025, prompting management to implement integration and efficiency measures, including procurement and channel collaboration [2][10]. Revenue and Profit Guidance - For 2026, the central control products are expected to achieve positive growth, with varying quarterly performances. The public construction segment is projected to grow from 15% to 35% of revenue, while the renovation segment is expected to decrease from 35% to 15% [2][11]. - The company is optimistic about overall performance in 2026, despite challenges in the renovation segment, which has seen a decline of over 20% each quarter [2][11]. International Market Outlook - Hisense's international sales have shown good growth, with regions like Latin America exceeding 30% growth. However, some areas like ASEAN have experienced declines due to adverse weather conditions. The company plans to enhance market share and average selling price (ASP) in mature markets while expanding product offerings in flexible markets like Latin America and ASEAN [2][12]. - The 2026 FIFA World Cup in North America is expected to significantly boost Hisense's growth in these regions, leveraging sponsorship to enhance brand visibility and market penetration [2][13]. Risk Management and Supply Chain - Hisense is managing risks related to increased tariffs on exports to Mexico by optimizing local procurement and maintaining a competitive edge through its Mexican manufacturing base [2][14]. - The company is also addressing the impact of the domestic new energy vehicle tax reduction and softening European demand by optimizing product structures to enhance market competitiveness [2][14]. Financial Planning and Capital Expenditure - Hisense plans to maintain a dividend payout ratio of around 50% and is exploring new incentive schemes for employees. Capital expenditures will include the construction of the Changsha mobile phone factory and the second and third phases of the Thailand industrial park, aimed at meeting future demand in Europe and the U.S. [2][17]. Future Guidance - Specific revenue and profit guidance for 2026 will be assessed based on domestic and international market conditions, with plans to communicate updates to the market as necessary [2][18].