White electric faucet, making a big difference
As a leading global electronics company, the company is committed to a global layout and actively exploring the high-end market. In 2023, the company achieved revenue of 261,428 billion yuan, an increase of 7.33% over the same period last year, achieved net profit of 16.597 billion yuan, an increase of 12.81% over the previous year, and the net profit margin to mother increased to 6.40%. 2024 marks the 40th anniversary of the company's establishment. Looking back on history, the company has always sought breakthroughs and innovations to achieve continuous large-scale growth. The compound revenue growth from 1991 to 2023 reached 20.97%. Looking forward to the future, the company's global, high-end and air conditioning category layout will further deepen, which is expected to bring more room for growth and optimization of profit efficiency.
Globalization: forward-looking layout, mergers and acquisitions support
Haier Smart Home began exploring the international market in the late 90s. In the context of domestic home appliance companies generally using OEM exports at the time, the company firmly chose to go overseas as a whole and gradually established a channel system and brand awareness to lay the foundation for rapid development in the later stages. In 2015, the company officially launched an international merger and acquisition strategy. It successively acquired high-quality products such as part of Japan's Sanyo Electric Corporation's white electronics business, US General Electric's home appliance business, and New Zealand's Fisher & Paykel, and used early accumulation to achieve global brand cluster synergy. In 2023, the company ranked first in the global sales share of washing machines, refrigerators, and large kitchen appliances.
High-end: the time has come, accumulation is scarce
With the central increase in the income level of Chinese residents and higher requirements for living standards, there are opportunities for quality upgrading and high-end exploration in the household appliances category. The company founded the high-end brand Casatti in 2007 in a forward-looking manner. Over the past ten years, it has continuously launched exemplary products, such as French double door refrigerators and single-drum “partition washing” washing machines, while using high-**** and celebrity effects to enhance brand tone and popularity. The “Tri-Winged Bird” brand store established in 2020 further enhances consumers' perception of quality of life and consumption conversion rates through scenario-based and integrated displays. In 2023, Casadi refrigerators and air conditioners reached 50% and 28% of the market share of more than 15,000 yuan in China, and the market share of washing machines above 10,000 yuan reached 84%, maintaining a leading edge in the high-end market.
Air conditioning: the foundation is consolidated and improved
Facing the trend that the air conditioning industry still has incremental prospects and that leaders pay more attention to profit, the company actively optimizes the air conditioning product strategy and relies on Casadi's brand advantages to increase market share. At the same time, the Haier brand relies on the active layout of the sinking market to seize incremental demand.
In terms of profitability, the increase in the proportion of high-priced products in the company's overall profitability will inevitably drive improvements in profitability, and Haier has begun to extend the air conditioning industry chain to improve the self-control rate of components. As self-built manufacturers climb in future production capacity and the company's layout for upstream links continues to improve, the profitability of Haier's air conditioning business will continue to be optimized.
Investment advice: Step by step, the future is promising
The company always adheres to the global market layout and forwardly expands the high-end market. It has accumulated a deep brand and has become a leader in the global electronics industry. Looking forward to the future, the company still has broad scope for expansion in the global market, and its operating efficiency continues to improve; the high-end market has a strong leading edge and is expected to further adapt to structural quality upgrade opportunities and rely on channel systems and product innovation to broaden categories and customer groups; on this basis, the company optimizes its product structure in the field of air conditioning, and is expected to increase its market share and profitability through supply chain optimization. Based on this, we judge that the company's future growth prospects are promising, and operating efficiency continues to be optimized. The company's net profit for 2024-2026 is estimated to be 191.47, 220.46, and 25.06 billion yuan respectively, corresponding to PE of 15.95, 13.85, and 12.21 times, respectively, maintaining a “buy” rating.
Risk warning
1. Risk of slowing macroeconomic growth; 2. Risk of exchange rate fluctuations; 3. Risk of fluctuation in raw material prices; 4. Risk of increased industry competition; 5. Risk of overseas business operation; 6. Risk of unfounded or unexpected profit forecasting assumptions.