外销快速增长，未来对业绩贡献重要性或将提升：1）1H24 欧美库存周期进入补库尾声，但受益新兴市场需求恢复、东南亚欧洲等地高温带动空调需求提升，白电出口保持快速增长。1H24 海信海外白电业务收入147.8 亿元，同比+36.9%；其中，欧洲同比+14%，美洲同比+40%，中东非同比+27%，亚太同比+19%，东盟区同比+39%。美洲依托蒙特雷工厂布局优势，加速南美渠道拓展，增速高于其他地区。2）1H24 央空海外收入快速增长，欧洲同比+9%，美洲同比+141%，中东非同比+31%。3）三电收入同比持平，连续两个季度扭亏实现小幅盈利。1H24 The company's net profit is in line with our expectations
The company announced 1H24 results: 1) Revenue of 48.642 billion yuan, +13.27% YoY; net profit to mother 2.016 billion yuan, +34.61% YoY. 2) Corresponding to 2Q24 revenue of 25.156 billion yuan, +6.98% YoY; net profit to mother of 1.035 billion yuan, +17.26% YoY. 3) The company's revenue was slightly lower than our expectations, mainly due to the marked weakening of domestic sales since May, but the company's net profit was in line with our expectations.
The pressure on the central air conditioning and household air conditioning market in the Chinese market is beginning to be reflected: 1) Hisense Central Air is dominated by the Hitachi brand, which accounts for a high proportion of household retail and decoration, and is greatly affected by real estate. According to the Bureau of Statistics, the completed 1H24 residential area ratio was -22%, which dragged down Hisense Hitachi's retail performance. 1H24 Hisense Hitachi's revenue was +0.3% year over year, mainly due to the increase in revenue from public construction; net profit was 1.957 billion yuan, +21.1% year over year, and the net profit margin was 17.3%, reaching a high level. 2) Domestic sales demand weakened markedly in May-June. Hisense did not significantly cut prices to cope with competition and chose to maintain profits. We estimate that 2Q24's profit margin continued to increase year-on-year, but revenue was under pressure. 1H24 Hisense ice washing/home air revenue was +27%/+8%, and operating profit margin was 3.4%/5.9% (-0.1/+1.9ppt, respectively). We estimate that revenue growth was driven by export sales, while 2Q24 White Electric's domestic sales declined year over year. 3) The high-end brilliant series grew rapidly, 1H24 revenue was +48% year-on-year, and the complete product line entered the Hisense Hitachi specialty store.
Export sales are growing rapidly, and the importance of contributing to performance may increase in the future: 1) The 1H24 European and American inventory cycle has come to an end, but thanks to the recovery in demand in emerging markets and high temperatures in Southeast Asia and Europe, etc., white electricity exports have maintained rapid growth. 1H24 Hisense's overseas white power business revenue was 14.78 billion yuan, +36.9% year over year; among them, Europe +14% year over year, America +40% year over year, Middle East Africa +27% year over year, Asia Pacific +19% year over year, and ASEAN region +39% year over year. Relying on the advantages of the Monterey plant layout, America accelerates channel expansion in South America, and the growth rate is higher than in other regions. 2) 1H24 Central Airlines' overseas revenue grew rapidly, with Europe +9% YoY, America +141% YoY, Middle East Africa +31% YoY. 3) Sandian's revenue remained flat year on year, reversing losses for two consecutive quarters and achieving a small profit.
Development trends
The company's competitiveness has improved in the past two years, and its profitability has increased markedly. Among them, the domestic sales business of central air conditioning and household air conditioning contributed the most to the increase in profitability. As China's HVAC market falls into decline and adjustment, the company's performance growth rate has slowed. However, we have also seen that the implementation of the trade-in policy may improve domestic sales in 4Q24. In addition, overseas markets for home appliances, HVAC, and auto parts all have strong potential for development.
Profit forecasting and valuation
As domestic demand has yet to see an inflection point in the short term, we lowered our 2024/2025 profit forecast by 6%/8% to 3.421 billion yuan/3.942 billion yuan. Current stock prices correspond to A/H shares 9.8x/7.4x 2024 price-earnings ratio. Maintaining an outperforming industry rating, due to the sector's recent decline in valuation, we lowered our A/H target price by 25%/30% to HK$32 /HK$27, corresponding to the 13.0x/9.9x 2024 price-earnings ratio of A/H shares, with room for increase of 32%/34%.
risks
Competition risk in the air conditioning market; risk of fluctuations in raw material prices; progress in the global layout falls short of expectations.
