The assembly layout is early and the industrial chain is perfect. Maintaining a “buy” rating, the assembly industry has become a general trend in the development of the home improvement industry. The company has strong comprehensive strength, early assembly layout, and perfect industrial chain among home appliance companies, and is expected to achieve healthy development of the assembly business and feed back the home appliance business. We maintain our profit forecast. We expect the company's net profit to be 187.1/212.6/23.09 billion yuan in 2024-2026, corresponding EPS of 1.98/2.25/2.53 yuan, and the current stock price corresponding to PE is 13.3/11.7/10.4 times, respectively, maintaining a “buy” rating.
The decoration industry has become a general trend in the home improvement industry. It is optimistic that comprehensive home appliance companies will enter the market and develop the home decoration industry in a healthy way. The CAGR in 2017-2022 was 7.9%. As growth stabilizes, the industry has begun a new dimension of supply-side competition and concentration continues to increase. The assembly model is a full-process decoration service presented to consumers by various enterprises in the decoration process upstream and downstream, effectively improving the operating efficiency of the industry in terms of money, time, and quality. In 2022, the packaging market reached 855.8 billion yuan, the CAGR reached 7.7% in 2019-2022, and the penetration rate increased from 20.7% to 23.4%, and there is still plenty of room for growth. We believe that the core competitiveness of complete equipment companies is reflected in the three dimensions of products, services and channels. Among the many entrants, integrated white power companies are most likely to take the lead in running through the profit model and continue to expand the scale of assembly revenue. However, for home appliance companies, the complete layout is expected to advance the flow of home appliances and carry out package sales in a competitive market, opening up a second growth curve.
Tri-Wingbird focuses on a three-level brand strategy, building a competitive advantage in three dimensions of service+product+channel. Haier has been working hard to launch the Tri-Wingbird for a long time, and the road to assembly is a step by step. In the past three years, Tri-Wingbird has achieved great results, and has built a complete competitive advantage on the service side, product side, and channel side. (1) Server-side: Front-end categories and front-end channels on the customer side work together. Haier Smart Home Brain 2.0 provides system support. Combined with Homegpt, whole house intelligence is more proactive, in-depth and accurate. Nest building design and wing delivery each provide online tool support that is different from the industry to help one-stop service. (2) Product side: The Tri-Winged Bird is backed by Haier, with a differentiated portfolio of multiple brands and a comprehensive line of home appliances. It is recognized by consumers. It can provide customized scenario solutions and match the home decoration style. It also collaborates highly with the group's Youwu Intelligence and Bologna to jointly carry out scenario-based displays to create integrated capabilities for home appliances, making it integrated, intelligent and embedded, and increasing the comprehensive competitive strength of front and rear assembly. (3) Channel side: Three Wings rely on Haier's mature offline channels and strong dealer system to quickly lay out various points of contact across the country to achieve an increase in the number of stores and iterative upgrades. Haier empowers dealers to develop the Tri-Wingbird business, and dealer resources and teams feed back the Tri-Wingbird one-stop service implementation, and the increase in customer order value drives the motivation of dealers to form a virtuous circle. As a specialized scene brand and resource aggregation platform, Tri-Wingbird takes all B/C, and is optimistic about scaling up to build Haier Smart Home's second growth curve.
Risk warning: demand recovery falls short of expectations, fluctuations in exchange rates and raw material prices, and risk of overseas business operations.