20220401-招银国际-海尔智家-06690.HK-Still_the_outperformer_in_a_tough_market_6页_1mb

Haier Smart Home (6690 HK) Company Update Summary

Core Content

Haier Smart Home is still viewed as an outperformer in a challenging market. The company maintains a "BUY" rating despite adjustments in its target price (TP) due to revised forecasts and market conditions.

Key Information

• Target Price: HK$30.66 (down from HK$36.91)
• Current Price: HK$25.45
• TP Upside: +20.5% from current price
• Market Cap: HK$256,074 million
• Free Float (A): 34.02%
• Free Float (H): 21.15%
• Stock Connect: 6.06%
• 12-Month Price Performance: -18.2% absolute, +5.6% relative to the market

Main Points

• FY21 Performance: Sales increased by 9% YoY to RMB 227.5bn, while net profit rose by 47% YoY to RMB 13.1bn, in line with estimates.
• Market Share Gain: Haier gained 2-3ppt in market share across key categories (fridges, washing machines, water heaters, air conditioners).
• FY22E Forecast: Sales growth is expected at ~7.0% in mainland China and ~7.4% overseas. No clear guidance was provided, but confidence in outperforming the industry remains.
• Growth Drivers:
  • Casarte: Achieved 25%+ growth in FY22E, up from ~15% in 4Q21, due to integration with The Three-Wings Bird brand.
  • Competitive Air-Con Products: Upgrades in design, technology, and supply chain.
  • Premiumization: High-end brands like Monogram, Cafe, and GE Profile achieved 40%+ growth in FY21.
  • Localized Supply Chain: Enhances efficiency and competitiveness in overseas markets.
  • Category Expansion: Growth in dryers and dish washers.
• Profit Margins:
  • GP Margin: Expected to remain flattish.
  • OP Margin: Improvements are still feasible, despite cost pressures.
• Cost Headwinds: Inflation in metal, plastics, energy, FX, and transportation costs.
• Margin Management: Management aims to offset costs via premiumization, product redesign, and leveraging Haier's supply chain.

Earnings Revision

• Revenue: Revised down by 5.0% for FY22E, 5.0% for FY23E.
• Gross Profit: Revised down by 4.6% for FY22E, 4.6% for FY23E.
• EBIT: Revised down by 17.4% for FY22E, 16.1% for FY23E.
• Net Profit: Revised down by 5.9% for FY22E, 5.7% for FY23E.
• Diluted EPS: Revised down by 5.9% for FY22E, 5.7% for FY23E.
• Gross Margin: Revised by 0.1ppt for FY22E, 0.1ppt for FY23E.
• EBIT Margin: Revised by -1ppt for FY22E, -1ppt for FY23E.
• Net Profit Margin: Revised by -0.1ppt for FY22E, -0.1ppt for FY23E.

Valuation

• P/E Ratio (FY22E): 12.5x, trading at 13x, which is considered not too demanding compared to peers.
• P/B Ratio (FY22E): 2.1x.
• ROE (FY22E): 17.5%.
• 3-Year PEG (FY22E): 0.9x.
• Yield (FY22E): 3.2%.

Peer Comparison

Financial Summary

• Revenue: Expected to grow from RMB 209,703 million in FY20A to RMB 270,886 million in FY24E.
• Net Profit: Projected to increase from RMB 8,877 million in FY20A to RMB 18,330 million in FY24E.
• Diluted EPS: Projected to increase from RMB 1.335 in FY20A to RMB 2.030 in FY24E.
• Operating Cash Flow: Expected to increase from RMB 17,599 million in FY20A to RMB 24,308 million in FY24E.
• Investing Cash Flow: Expected to decrease from RMB -5,264 million in FY20A to RMB -10,807 million in FY24E.
• Financing Cash Flow: Expected to decrease from RMB -1,026 million in FY20A to RMB -6,653 million in FY24E.
• Net Change in Cash: Expected to decrease from RMB 11,309 million in FY20A to RMB 6,848 million in FY24E.
• Cash at End of Year: Expected to increase from RMB 45,635 million in FY20A to RMB 78,582 million in FY24E.

Balance Sheet

• Non-Current Assets: Expected to increase from RMB 89,196 million in FY20A to RMB 112,68 million in FY24E.
• Current Assets: Expected to increase from RMB 114,24 million in FY20A to RMB 156,05 million in FY24E.
• Total Net Assets: Expected to increase from RMB 66,799 million in FY20A to RMB 112,65 million in FY24E.
• Shareholders' Equity: Expected to increase from RMB 66,799 million in FY20A to RMB 112,65 million in FY24E.

Key Ratios

• Sales Mix (%):
  • Food Solutions: 15.8% (FY20A), 17.5% (FY21A), 17.2% (FY22E)
  • Air Solutions: 10.4% (FY20A), 12.0% (FY21A), 12.9% (FY22E)
  • Clothing & Water Solutions: 15.4% (FY20A), 16.9% (FY21A), 16.5% (FY22E)
  • Overseas & Other Business: 58.3% (FY20A), 53.6% (FY21A), 53.4% (FY22E)
• P&L Ratios (%):
  • Gross Margin: 29.0% (FY20A), 30.5% (FY21A), 30.6% (FY22E)
  • Operating Margin: 6.0% (FY20A), 6.1% (FY21A), 6.8% (FY22E)
  • Pre-Tax Margin: 6.5% (FY20A), 7.0% (FY21A), 7.5% (FY22E)
  • Net Margin: 4.2% (FY20A), 5.7% (FY21A), 6.3% (FY22E)
• Balance Sheet Ratios:
  • Current Ratio: 1.0 (FY20A), 1.1 (FY21A), 1.1 (FY22E)
  • Quick Ratio: 0.8 (FY20A), 0.8 (FY21A), 0.9 (FY22E)
  • Cash Ratio: 0.4 (FY20A), 0.5 (FY21A), 0.5 (FY22E)
  • Inventory Turnover Days: 72 (FY20A), 65 (FY21A), 65 (FY22E)
  • Trade Receivables Days: 52 (FY20A), 45 (FY21A), 45 (FY22E)

Conclusion

Haier Smart Home continues to show strong performance despite market challenges. Its strategic initiatives, including premiumization, product innovation, and category expansion, are expected to drive growth and improve margins. The current valuation is considered attractive, and the company is maintained as a "BUY" with a revised target price of HK$30.66.