Haier Smart Home's performance has increased, emphasizing the promotion of new businesses such as sweeping robots Hit the performance meeting

Source: Visual China

On December 18, Haier Smart Home (600609. In response to questions from investors at the meeting about the limited year-on-year growth in the third quarter of 2023, Gong Wei, vice president and chief financial officer of the company, said that the company's revenue in the third quarter was 198.66 billion yuan and net profit attributable to the parent company was 13.15 billion yuan, an increase of 7.5% and 12.7% respectively over the same period in 2022, achieving competitive growth beyond the industry.

The performance has achieved growth, and there is a gap with its peers

Titanium media APP learned that among the peers, many companies have achieved year-on-year growth. Midea Group (000333. SZ) third quarterly report shows that from the beginning of the year to the end of the reporting period, the revenue was about 291.111 billion yuan, a year-on-year increase of 7.67%, and the net profit attributable to shareholders of listed companies was about 27.718 billion yuan, a year-on-year increase of 13.27%. According to the financial report, Midea Group's new energy and industrial technology revenue was 21.3 billion yuan, a year-on-year increase of 25%, intelligent building technology revenue was 21.2 billion yuan, a year-on-year increase of 19%, and robotics and automation revenue was 22.9 billion yuan, a year-on-year increase of 17%.

In addition, Gree Electric (000651. From the beginning of the year to the end of the reporting period, the revenue was about 155.007 billion yuan, a year-on-year increase of 5.10%, and the net profit attributable to shareholders of listed companies was about 20.092 billion yuan, a year-on-year increase of 9.77%.

From the comparison of the above data, it can be seen that Haier Smart Home's performance in the third quarter of this year is slightly inferior to that of Midea Group, although its revenue is higher than that of Gree Electric Appliances, but there is a gap of nearly 7 billion yuan in net profit. The third quarterly report pointed out that in the third quarter, the share of advantageous businesses such as refrigerators, washing machines, and aquatic industries continued to increase, and the revenue of strategic development industries such as household air conditioners, smart buildings, and kitchen appliances achieved rapid growth. At the same time, Haier Smart Home's asset-liability ratio was 58% at the end of the third quarter, a decrease of 1.1% from the end of 2022, thanks to the increase in net profit and the increase in total assets.

Regarding whether the gross profit margin in the first three quarters of this year has improved, Gong Wei said that the gross profit margin in the first three quarters of 2023 will reach 30.7%, an increase of 0.2% from the same period in 2022. Among them, the domestic market benefited from the decline in bulk raw material prices, the digital transformation of procurement and R&D, the construction of a digital production and marketing collaboration system, and the improvement of the proportion of self-made supply chains, and the gross profit margin increased year-on-year;

It is worth noting that when asked by investors about Haier Smart Home, which has a high reputation for major appliances, will it invest in small household appliances in the future, Gong Wei emphasized that the company actively promotes the development of new businesses such as home sweeping robots.

According to data from Aowei Cloud Network (831101), in the first half of 2023, the sales volume of sweeping robots will be 1.45 million units, a year-on-year decrease of 5.39%, and the sales volume will be about 4.7 billion yuan, a year-on-year decrease of 3.66%. Ecovacs (603486. SH) third quarterly report shows that the revenue is about 3.387 billion yuan, a slight increase of 2.58% year-on-year, and the net profit attributable to shareholders of listed companies is about 19.6123 million yuan, a year-on-year decrease of 92%. From the beginning of the year to the end of the reporting period, the revenue was about 10.532 billion yuan, a year-on-year increase of 4.02%, and the net profit attributable to shareholders of listed companies was about 604 million yuan, a year-on-year decrease of 46.21%.

Titanium Media APP noted that Ecovacs' semi-annual report cited statistics from GfK, Zhongyikang, NPD, and Stackline showed that in the first half of 2023, the global sweeping robot market size will be 2.76 billion US dollars, a year-on-year decrease of 4.9%. In the domestic market, the total data of Zhongyikang retail promotion shows that the market size of China's sweeping robot is 6.36 billion yuan, a year-on-year decrease of 0.6%.

Through the above data, it can be seen that the future of the sweeping robot market is quite challenging. However, there is also a view in the market that the development of more efficient navigation systems, more powerful cleaning capabilities and more intelligent obstacle avoidance technology is expected to become a new growth point for the sweeping robot market.

The overseas market focuses on high-end and strives to maintain steady development

In the third quarter of 2023, the company achieved revenue of 67.030 billion yuan, net profit attributable to the parent company of 4.185 billion yuan, and net profit attributable to the parent company of 4.117 billion yuan, an increase of 6.1%, 12.9%, and 10.4% respectively over the same period in 2022. Gong Wei emphasized that the company will maintain a steady development trend through continuous product innovation, market innovation, model innovation, and digital transformation in the future.

At the performance meeting, some investors paid attention to the development status of Haier Smart Home after adopting the high-end brand strategy in the overseas market, in this regard, Gong Wei said that over the years, the company has adhered to the high-end leading strategy in the overseas market, and through the listing of innovative leading products, the proportion of high-end brand revenue has continued to increase, and the brand price index has continued to grow. For example, in the North American market, high-end brands maintained rapid growth from 2017 to 2022, while in the European market, the Haier brand price index was around 120.

Regarding the performance growth of the South Asian and Southeast Asian markets in the third quarter, Liu Xiaomei, secretary of the board of directors, said that the South Asian and Southeast Asian markets can carry out the research and development of differentiated new products in combination with the needs of local users on the product side, complement the product lineup to meet the needs of users, seize the rapid growth opportunities of chain and e-commerce on the channel side, improve the output efficiency of single stores, and enhance the competitiveness of the whole process through the global supply chain on the supply chain side. At the same time, we will create high-end brands and create high-profit products, such as using refrigerator folio and washing machine COLOR AI series as the entry point of high-end series, creating CP/VHC model channels, improving the number and image of in-store samples, expanding product market share, and effectively enhancing the competitiveness of the terminal market.

In response to the "smart building", the second growth curve of Haier smart home, which investors are concerned about, Liu Xiaomei said that Haier's smart building is based on the HVAC business to develop new growth points such as heat pump energy and building intelligent control, and Haier smart building provides users in major industries with a full-scene solution of "building smart and low-carbon building". Now, after a year of trying, smart buildings have achieved breakthrough results. At present, Haier Smart Home has parallel businesses such as efficient HVAC, intelligent building control, heat pump heating, and industrial environment, and Haier Smart Buildings has continuously improved its diversified layout and maximized its value.

Titanium Media APP noted that in September 2023, Haier Smart Home Holdings acquired Tongfang Energy Technology Development Co., Ltd., which obtained the latter's technical precipitation and program experience in the field of heating, which further enhanced Haier Smart Home's integrated service capabilities in heating and cooling operations, comprehensive utilization of clean energy, industrial waste heat recovery and other energy-saving transformation solutions.

Institutions are optimistic about the acquisition of Carrier's business, and the household will cut into commercial use

Founder Securities Research Report pointed out that on December 14, Haier Smart Home intends to acquire 100% equity and related assets of Carrier Group's commercial refrigeration business through a wholly-owned subsidiary for about $640 million in cash, believing that the company is a leader in the field of home refrigeration scenarios, and through the acquisition of Carrier's global commercial refrigeration business, the global business territory will be expanded to commercial retail refrigeration and cold storage refrigeration scenarios, which is expected to create new business growth points, and may expand other commercial cold chain scenarios in the future with the acquisition.

According to the research report, Haier Smart Home is expected to benefit from technology, brand, channels, customers, and services. In addition, Carrier can leverage its resources in Europe to accelerate business development and increase competitiveness. In terms of China and the Asia-Pacific market, Haier Smart Home and Carrier established a joint venture in China in 2001, through this acquisition, the company can leverage the company's leading advantages in large-scale procurement, core supply chain foundation and channel synergy in the Chinese and Asia-Pacific markets to seize the rapid development opportunities of the commercial refrigeration industry in China and the Asia-Pacific market and achieve potential growth.

Founder Securities believes that in terms of overseas markets, major markets such as Europe and the United States are still facing problems such as weak demand and intensified competition in the short term, but South Asia, Southeast Asia and other markets are gradually recovering with economic recovery, and emerging markets such as South Asia, Southeast Asia, and the Middle East and Africa are expected to become important growth points for the home appliance industry. As a leader in the white goods industry, Haier Smart Home has highlighted the advantages of high-end, global layout and localized operation, differentiated multi-brand strategy to meet the needs of different types of consumers, deepening global business collaboration and digital reform, and actively expanding new categories such as dryers, dishwashers, household cleaning robots, HVAC and heat pumps, and is expected to bring new growth to the company after the acquisition of Carrier's global commercial refrigeration business.

Guosen Securities Research Report also pointed out that after the acquisition of Carrier, Haier Smart Home will develop from household refrigeration to commercial refrigeration, which is expected to create a new growth point for the company, and believes that Haier Smart Home and Carrier commercial refrigeration business have high synergy and are expected to strengthen each other's competitive advantages. At the same time, the data cited shows that the commercial refrigeration industry is broad, and the cold storage market size in the commercial refrigeration market in Europe, Asia-Pacific and North America will be about 11 billion US dollars in 2023, and the compound growth rate is expected to be about 13% from 2023 to 2028, and the food retail market in the commercial refrigeration market will be about 15 billion US dollars in 2023, dominated by supermarket display cabinets, and the market is relatively stable. According to Frost &Sullivan, the global commercial refrigeration market size was $17.2 billion in 2022 and is expected to reach $24 billion in 2032.

Guosen Securities believes that Haier Smart Home is expected to expand to other commercial cold chain scenarios in the future, expand to B-end commercial customized products and services, and create new business growth points. On December 18, Haier Smart Home closed at 20.29 yuan per share, up 0.55%, with a total market value of 191.5 billion. (This article was first published in Titanium Media APP, author | Fang Lu)