Haier Smart Home released its 2024 three-quarter report. Revenue increased 2% year over year, and net profit to mother increased 15%. The company achieved operating income of 202.97 billion yuan in the first three quarters of 24, a year-on-year increase of +2.17%; net profit to mother was 15.15 billion yuan, an increase of +15.27% year-on-year. Among them, 24Q3 achieved revenue of 67.35 billion yuan, a year-on-year increase of +0.47%; achieved net profit of 4.73 billion yuan, an increase of +13.15% year-on-year. Q3 revenue maintained positive growth in a single quarter, and increased profitability continued to drive double-digit growth in net profit to mother. In the domestic market, the company's terminal retail sales improved month by month in the third quarter. Among them, Casadi retail sales increased higher than the overall level; in overseas markets, the company increased its share in the European and American markets, and emerging markets continued to grow rapidly.

In terms of profitability, gross margin reached 30.8% in the first three quarters of 2024, an increase of 0.1 pct over the previous year. Among them, gross margins in the domestic market and overseas markets both achieved year-on-year increases. On the cost side, the company's sales expense ratio/management expense ratio/financial expense ratio for the first three quarters were 14.2%/3.8%/0.1%, respectively, a year-on-year decrease of 0.5 pct/0.3 pct and an increase of 0.1 pct. The company's overall operating efficiency continues to improve, driving overall profitability to continue to rise.

The leading brand position in the domestic market is stable, and Tri-Wingbird strengthens the new ecological circuit. Referring to the company's official account, quoting data from Zhongyikang, the 24Q3 company's refrigerator market share reached 44.2%, washing machine share reached 47.2%, air conditioning offline market share exceeded 20%, and the leading brand position was stable. In the first three quarters of 24, the Tri-Wingbird channel achieved retail sales of 8.6 billion yuan, an increase of 10% over the previous year. It continued to promote strategic upgrading and open up new business formats and new tracks for the company.

Investment recommendations and profit forecasts. We believe that in the domestic market, the company's product and brand matrix is perfect, and the high-end market advantage is obvious. The company's 24Q4 will effectively benefit from the boost in demand driven by national supplements. In terms of overseas markets, the company has steadily increased its share in the European and American markets, strengthened channel and supply chain construction in emerging markets, and continued to expand its global business layout. We expect the company's 24-26 EPS to be 2.03/2.31/2.60 yuan, a year-on-year increase of 15.0%/13.6%/12.7%, giving the company a 24-year 15-18 xPE valuation, corresponding to a reasonable value range of 30.45-36.54 yuan, maintaining the “superior to the market” rating.

Risk warning. Demand for terminals fell short of expectations.