Haier Smart Home Navigates Challenges, Poised for Growth

UOB Kay Hian | 31 March 2025

2024 Results: 4Q24 Impacted by Finance Costs and One-off Expenses

Haier Smart Home’s (6690 HK) 4Q24 net profit was negatively impacted by finance costs and one-off expenses related to the consolidation of Carrier Commercial Refrigeration (CCR) and the streamlining of the European business. For 2025, management expects mid-to-high single-digit revenue growth and double-digit net profit growth, with the premium Casarte brand projected to grow over 20%. While there will still be some one-off expenses in 2025, the amount is expected to be lower than in 4Q24.

2024 Financial Highlights

Total revenue of Rmb285,971m, up 4.3% year-over-year (yoy), beating market consensus and our estimates
Gross profit margin of 27.2%, up 0.4 percentage points (ppt) yoy
Adjusted operating profit of Rmb20,437m, up 14.9% yoy
Attributable net profit of Rmb18,741m, up 12.9% yoy, but 2% below market consensus and 3% below our estimate

4Q24 Impacted by Finance Costs and One-off Expenses

4Q24 net profit was Rmb3,587m, up 4% yoy but down 24% quarter-over-quarter (qoq)
Lower-than-expected net profit growth was due to:
Increase in finance costs due to forex headwinds
Expenses related to the consolidation of CCR
Costs from streamlining the European business, including compensation for workforce layoffs and factory closures

Outlook and Earnings Revision

Management expects 2025 revenue to grow by mid-to-high single digits and net profit to grow by double digits
Casarte brand revenue projected to grow over 20% in 2025, supported by product enhancements and stronger marketing
We cut our 2025/26 earnings forecasts by 6%/6% respectively, but raise 2025/26 revenue forecasts by 6%/7%

Valuation and Recommendation

Maintain BUY rating, but cut target price by 10% to HK$37.80, implying 16.0x 2025F PE and 14.2x 2026F PE
The stock currently trades at 10.4x 2025F PE and 9.2x 2026F PE