Haier Smart Home 2014 Quarterly Report

24Q1: Total operating income of 68.978 billion yuan (YOY +6.01%), net profit attributable to mother of 4.773 billion yuan (YOY +20.19%), net profit after deduction of 4.640 billion yuan (YOY +25.41%).

Analytical judgment

Revenue side: Divided into regions, the Chinese market revenue increased by 8.1% in 24Q1, of which 1) dominant industries: refrigeration and cleaning maintained steady growth, and the aquaculture industry achieved double-digit growth; 2) Potential industries: household air conditioning, kitchen appliances, smart buildings, etc., all increased by more than 10%. 3) Casadi brand revenue increased 14%. Overseas revenue increased by 4%, and operating profit increased by more than double digits.

Profit side: 24Q1 gross margin increased 0.3 pct year-on-year, with both domestic and overseas increases.

The sales expense ratio was optimized by 0.5 pct compared to the same period in 2023. Thanks to the company's promotion of digital transformation, efficiency improvements in marketing resource allocation, logistics distribution, and warehousing operations. The management cost ratio was optimized by 0.3 pct compared to the same period in 2023. Thanks to the application of digital tools, business processes were optimized, and organizational efficiency was improved. Due to the combined impact, the net interest rate to the mother increased significantly.

24Q1 gross profit margin of 28.95% (YOY+0.26pct), net profit margin to mother 6.92% (YOY+0.82pct). In 24Q1, the company's sales/management/R&D expenses were 13.09%/3.22%/4.27%, respectively, -0.49pct/-0.34pct/+0.06pct year-on-year, respectively.

Investment advice

We maintain our 24-26 revenue forecast of 2805.48/2995.44/319.577 billion yuan, +7.31%/+6.77%/+6.69% year-on-year, respectively. In terms of gross margin, it is estimated to be 31.61%/31.71%/31.71% for 24-26, respectively. The corresponding net profit for 24-26 was 189.27/207.79/22.215 billion yuan, respectively, +14.04%/+9.79%/+6.91% year-on-year, respectively. The corresponding EPS was 2.01/2.20/2.35 yuan respectively. Based on the closing price of 28.80 yuan on April 29, 24, the corresponding PE was 14.36/13.08/12.24 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.