Financial reporter Wang Beibei
The operating income was 68.98 billion yuan, a year-on-year increase of 6%, the net profit attributable to the parent company was 4.77 billion yuan, a year-on-year increase of 20.2%, and the net profit not attributable to the parent company was 4.64 billion yuan, a year-on-year increase of 25.4%. On the evening of April 29, the first quarter report of 2024 released by Haier Smart Home showed that Haier Smart Home achieved high growth under a high base, and the profit growth rate exceeded expectations.
In the net profit growth of the three giants of home appliances, Midea increased by 11.91%, Gree Electric Appliances increased by 13.77%, and Haier Smart Home was better than Midea and Gree. Combing the performance of the first quarter of the past three years, the compound growth rate of Haier Smart Home's net profit is 16%, which is significantly higher than Midea's 12% and Gree's 8%.
From its own point of view, the profit growth rate is significantly higher than the revenue growth rate, and from the external point of view, the three leading companies are far ahead. How did Haier Smart Home become the "net profit king" among the home appliance giants?
High-end leading, global independent branding
Leading the high-end market with high-end products is an important support for Haier Smart Home to maintain steady growth in performance. According to the first quarterly report, Casarte has become the choice of more than 20 million users, and has achieved TOP1 in the high-end market for 8 consecutive years. Among them, Casarte also ranks first in the high-end market in many categories: the retail sales share of refrigerators above 10,000 yuan is 39.3%, the retail sales share of washing machines above 10,000 yuan is 84.1%, and the retail sales share of air conditioners above 15,000 yuan is 25.3%.
In order to accelerate the development, at this year's AWE, Casarte and Boloni started a strategic cooperation to create an artist-centric solution for users. At the same time, it is worth mentioning that Casarte has begun to accelerate its overseas layout. At the past Milan International Furniture Fair and Milan Design Week, Casarte refrigerator appeared at the exhibition with a combination of cabinets, refrigerators and wine cabinets, showing the balance of art, space and life in the "fashion capital".
At the Canton Fair in April this year, the X11 washing machine was launched in response to the energy shortage in Europe and other problems, which is 50% more energy-efficient than the highest A-level energy efficiency standard in Europe. In the face of the challenge of declining demand in major home appliance markets in Europe and the United States, Haier Smart Home has achieved sustained growth by launching leading products that meet the needs of local users, deepening the layout of local supply chain and sales network, and giving full play to global R&D, procurement, supply chain, and logistics collaboration.
Overseas, high-end brand creation has led to a significant increase in Haier Smart Home's operating profits. In the first quarter, Haier Smart Home's overseas revenue increased by 4% year-on-year, and its operating profit increased by more than 10% year-on-year. In terms of regions, in the European and American markets, Haier's share of smart homes continues to increase. According to GfK data, in the first two months of this year, Haier Smart Home's sales share in the European market increased by 0.9pct year-on-year to 9%, and in South Asia, Southeast Asia, Australia and New Zealand, Haier Smart Home's revenue growth exceeded double digits.
Led by science and technology, two-wheel drive of scene and ecology
In the fiercely competitive home appliance market, enterprises cannot do without two directions if they want to continue to grow: one is to tap new increments in the stock market, and the other is to create new incremental markets. Haier Smart Home is committed to opening up new growth space through scene brands and ecological brands.
According to Euromonitor data, relying on the advantages of all categories of home appliances, Haier Smart Home is one of the first home appliance companies in the industry to launch smart home solutions. During the reporting period, its Three-winged Bird brand provided consumers with better smart home solutions by strengthening capacity building such as scenario planning and R&D, integrated design and delivery of cabinets and appliances, and smart interaction.
On the one hand, users want a new kitchen and a new way of life more than just a new refrigerator, a new washing machine, etc. Three-winged Bird provides users with a one-step and one-time solution for a better smart life, on the other hand, to create new increments is to provide differentiated solutions that no one else has. Three-winged Bird, which has been in existence for 3 years, is leading the industry into a new era of "home appliance and home integration", and with the support of customization, delivery and intelligence, it is accelerating the implementation of the smart home appliance integration strategy, and realizing the continuous growth of terminal stores and users' daily activity. According to the financial report, in the first quarter, the daily activity of the three-winged bird scene increased by 32% year-on-year, and the number of stores increased by 85% year-on-year.
The three-winged bird is a microcosm of Haier Smart Home's continuous innovation. Haier Smart Home has always adhered to scientific and technological innovation, promoted product iteration and upgrading, continuously solved user pain points, and achieved continuous leadership. For example, Haier's full-space fresh-keeping refrigerator, which solves the problem of "large temperature fluctuations" and other food storage problems in the user's freezing area, will increase its market share to 16.4% in 2024Q1 after surpassing one brand in one category in 2023, continuing to "surpass one brand in one category"; In order to meet the needs of easy operation, Haier Air Conditioner has launched the Lingxi series of air conditioners equipped with original technologies such as cool core bridges, heat flow defrosting, variable diversion, and intelligent offline voice systems, which have become the TOP1 popular models in direct sales channels, and so on.
Haier Smart Home, which solves user needs with original technology, ranks first in the industry in terms of market share of refrigerators and washing machines, with offline market shares of 43.4% and 46.1% respectively.
Digital empowerment has achieved remarkable results in reducing fees and improving efficiency
Among the three giants of home appliances in the first quarter, Midea's net profit increased by 11.91%, Gree Electric increased by 13.77%, and Haier Smart Home increased by 20.16%, which was better than Midea and Gree, which reflected the remarkable results of Haier Smart Enterprise's digital transformation and efficiency improvement.
With the deepening of digital transformation, Haier Smart Home has continuously improved its operational efficiency in key links such as design, R&D, procurement, manufacturing, logistics, marketing and service. According to the financial report, in the first quarter, Haier's smart home rate was optimized by 0.8pct. Among them, thanks to the efficiency improvement of marketing resource allocation, logistics distribution and warehousing operations, Haier Smart Home's sales expense ratio was 13.1%, an optimization of 0.5 pct over the same period last year, and through the use of digital tools and redesign of business processes, Haier Smart Home improved the efficiency of organizational personnel, so that the management expense ratio was optimized by 0.3 pct compared with the same period last year, reaching 3.2%.
While the rate continues to be optimized, Haier Smart Home's profitability has also continued to improve, with its net profit margin increasing from 6.3% in the 2023 annual report to 6.9% in the first quarter of 2024. In addition, a number of Haier Smart Home's operating indicators continued to improve steadily, with operational efficiency and capital use efficiency continuously improving, and the inventory turnover days of Haier Smart Home in the first quarter were optimized by 1.5 days compared with the end of 2023.
At present, China's home appliance industry has entered a new stage dominated by renewal demand. According to the estimation of the China Household Electrical Appliances Research Institute, the total number of air conditioners, refrigerators, and washing machines in the country in 2022 will be 780 million, 580 million, and 550 million respectively, which shows that a huge stock replacement market has been formed. On April 17, Haier Smart Home proposed the "Haier Beautiful Life Renewal Season", which promotes the continuous implementation of the green carbon plan nationwide through the "Trade-in Journey to 100 Cities, 100 Counties", focusing on the four new propositions of health, green, wisdom and beauty, and bringing users a green, low-carbon and beautiful life.
The first quarterly report released a signal of Haier Smart Home's rapid development to the outside world, showing the strong resilience and growth potential of its operation. Industry insiders said that in the long run, with the continuous promotion of digital cost reduction and efficiency improvement, as well as the continuous opening up of new growth space for global brands, Haier Smart Home will usher in more development opportunities and embark on a broader path of high-quality development.
At the opening of the first day (April 30) after the release of the first quarterly report, Haier Smart Home's A-share price rose 5.07%, hitting a new high in the past 60 days, closing at 30.26 yuan per share.