Incident Overview

24H1: Revenue of 48.642 billion yuan (YOY +13.27%), net profit attributable to mother 2.016 billion yuan (YOY +34.61%), net profit of 1.703 billion yuan after deduction (YOY +34.82%).

24Q2: Revenue 25.156 billion yuan (YOY +6.98%), net profit to mother 1.035 billion yuan (YOY +17.26%), net profit after deduction of 0.865 billion yuan (YOY +16.54%).

Analytical judgment

Revenue side: Divided by region, 24H1 domestic/export sales revenue was +4%/+28% year-on-year respectively.

The overseas growth rate was impressive. According to the announcement, the 24H1 overseas white power business achieved revenue of 14.78 billion yuan, an increase of 36.91% year on year. Among them, the Europe/America/Middle East Africa/Asia-Pacific /ASEAN region revenue was +14%/+40%/+27%/+18.9%/+39.46% year on year, respectively. With split products, 24H1 HVAC/ice washing revenue was +8%/+27% year over year. Combined with the disclosed Hisense Hitachi business situation, 24H1 Hisense Hitachi (i.e. central air conditioning business) revenue/net profit was +0.3%/+21% year over year, so 24H1's home space revenue was +16% year over year, which was better than that of CCC.

Profit side: 24H1 achieved a gross sales margin of 21.28% (YOY-0.25pct), a net profit margin of 4.14% (YOY+0.66pct); corresponding to Q2, a gross sales margin of 20.95% (YOY-0.92pct), and a net profit margin of 4.11% (YOY+0.36pct). By product, 24H1 HVAC/ice washing gross margin was +0.08/-0.71 pct year over year.

In terms of fee ratios, financial expenses fluctuate significantly due to exchange. 24H1's sales/management/R&D/finance expense rates were 10.20%/2.47%/3.38%/-0.22%, respectively, -0.27pct/+0.08pct/+0.48pct/+0.45pct, respectively; corresponding Q2 was 10.38%/2.30%/3.46%/-0.13%, respectively, -0.39pct/+0.14pct/+0.62pct/+1.01pct, respectively.

Investment advice

We maintain our 24-26 revenue forecast of 93.903/101.915/110.716 billion yuan, +9.70%/+8.53%/+8.64% year-on-year, respectively. In terms of gross margin, it is estimated to be 23.38%/23.68%/23.98% for 24-26, respectively. The corresponding net profit for 24-26 was 3.243/3.738/4.199 billion yuan, respectively, +14.29%/+15.29%/+12.31% year-on-year, respectively. The corresponding EPS was 2.34/2.69/3.03 yuan respectively. Based on the closing price of 24.30 yuan on August 30, 24, the corresponding PE was 10.40/9.02/8.03 times, respectively, maintaining an increase in holdings rating.

Risk warning

Risk of macroeconomic fluctuations; risk of price increases for raw materials; increased risk of competition.