The 24H1 performance was in line with expectations. The company 24H1 achieved revenue of 48.642 billion yuan, +13% YoY net profit, +35% YoY net profit, 1.703 billion yuan, +35% YoY; of these, Q2 achieved revenue of 25.156 billion yuan, +7% YoY, net profit to mother 1.035 billion, +17% YoY.
At the industry level, looking at the retail market, according to Aowei Cloud Network data, the 24H1 air conditioning market omni-channel retail volume/volume ratio -10.8%/-13.7%; domestic refrigerator retail volume/value ratio +0.8%, washing machine retail volume +6.2%/+3.8% during the same period, the consumer market was sluggish and showed a month-on-month downward trend; according to Aowei Cloud Network data, the company's retail sales of household air conditioners in the first half of 2024 were +0.3% year-on-year, higher than the total retail sales volume of the industry; +3.6% Market share +0.4pct. Looking at the wholesale market, according to industry online data, 24H1 households all sold 0.113 billion units, up 15.6%/15.5% year on year, with domestic/export sales volume of 60.87/52.61 million units, up 5.3%/30% year on year. The 24H1 domestic sales market “opened high and went low”. With a watershed in May, sales in January-April were driven by channel inventory replenishment, achieving +16.1% year-on-year sales. The retail market continued to be sluggish due to the adverse factors of rainy and rainy weather in South China. Dealers' enthusiasm to replenish inventory was severely impacted, and instead entered the warehousing cycle. Sales in air conditioning were -8.6% compared to the same period in May-June. The household refrigerator industry achieved production/sales volume of 46.38/46.95 million units, up 13.1%/13.8% year on year, with internal/external sales volume of 21.24/25.71 million units, up 3.7%/23.8% year on year; household washing machine industry 24H1 production/sales volume of 41.15/41.34 million units, up 12.8%/11.8% year on year, with internal/external sales volume of 19.73/21.62 million units, up 2.4% year on year/ 22.1% Looking ahead to the second half of the year, there is still downward pressure in the short term, but with the stimulus of the “trade-in” consumption policy, the funding for ultra-long-term special treasury bonds is expected to reverse the current sluggish consumption environment. Exports continued to be booming, driven by demand from emerging markets such as Southeast Asia, South America, and Eastern Europe, and are expected to continue until the end of the year. In the first half of 2024, the domestic central air conditioning industry was affected by deep adjustments in the real estate market, industrial and commercial central air conditioning was affected by factors such as the slowdown in capital expenditure of downstream enterprises represented by new energy industries such as lithium electricity and photovoltaics, etc., and the central air conditioning industry as a whole faced some downward pressure. According to i Media data, sales of the 24H1 domestic central air conditioning industry fell 18.2%; according to industry online data, domestic sales in the central air conditioning industry fell 5.1% in the first half of the year; according to Aiken Network data, the central air conditioning market capacity in the first half of the year was -5%. In particular, the home improvement retail market was affected by weak real estate market and weakening demand, and the scale was -8.5% year-on-year.
At the company level, 24H1's central air business achieved revenue of 11.338 billion, the same as the previous year, and achieved net profit of 0.963 billion yuan, a net interest rate of 17.3% compared to the previous year, +3pcts, with a share of more than 20% in the multi-online market; the home air business achieved revenue of 11.429 billion, +16% compared to the same period, and the ice washing business was 11.587 billion, +11%; the company's overseas business developed rapidly, and the influence of its own brand continued to increase. 24H1 overseas white power business Revenue of 14.78 billion yuan was achieved, +36.91% year over year. Revenue increased 14%/40%/27%/19%/39% in Europe/America and Middle East Africa/Asia Pacific/ASEAN respectively. In particular, in the ASEAN region, which operates its own brands, the company's own brand revenue was +64% year over year, accounting for 74% of revenue, or +11pcts year over year.
Maintain a “buy” investment rating. We raised the company's 24-25 profit forecast to 3.489/4.012 billion (original value 3.272/3.656 billion), and added a 26-year profit forecast of 4.614 billion, +23%/+15%, respectively, corresponding to the current price-earnings ratio of 9.8/8.5/7.4 times, respectively, to maintain the “buy” investment rating
Risk warning: risk of fluctuations in raw material prices; risk of exchange rate fluctuations; risk of increased competition in the industry.