Recently, domestic appliance industry giants have announced their new quarterly financial reports.
Following Gree, Skyworth, and Hisense, Haier Zhijia released its Q1 performance report on the evening of April 29.
Reported data shows that in 2021, Haier Zhijia achieved revenue of 54.774 billion yuan, a year-on-year increase of 26.96%; net profit attributable to the parent was 3.054 billion yuan, a year-on-year increase of 185.33%. Expected earnings report.
On the second day of the financial report, investors did not express too much surprise. As of press time, the stock price was reported to be 33.65 Hong Kong dollars, an increase of 0.3%.
As one of the three leading brands in the field of home appliances in China, Haier Zhijia is well known for its refrigerators and washing machines, and has opened up the situation through its own path of globalization. In the past few years, its business has performed well overseas. Judging from the 2021Q1 performance report, the overall data performance is excellent. So, what are the value points worth paying attention to in the financial report of Haier Zhijia?
The performance of high-end brands continues to be eye-catching, and the growth of the air-conditioning business is a highlight
In 2021, Haier Zhijia achieved revenue of 54.774 billion yuan, a year-on-year increase of 26.96%; gross profit margin was 28.5%, a year-on-year increase of 1 percentage point; net profit attributable to the parent was 3.054 billion yuan, a year-on-year increase of 185.33 %. The net profit attributable to the parent grew strongly, nearly doubling that of the same period last year.
Data growth is first of all its high-end development route. At present, Haier Zhijia has formed a global home appliance brand cluster, among which a large part of the profit growth is the growth of its high-end brands. According to the Q1 financial report, Casarte’s revenue increased by 80%, and the brand’s refrigerators, kitchen appliances, and washing machines were both online and offline. Among them, Casarte’s refrigerator market share reached 13.2%.
In terms of the 2020 annual report, the high-end brand Casarte achieved net income of 8.7 billion yuan, a year-on-year increase of 17%, of which the fourth quarter increased by 35%. According to statistics from Zhongyikang, the Casarte brand, which focuses on high-end quality, will occupy an absolute leading position in 2020, and its retail sales share of refrigerators, washing machines, air conditioners and other sub-categories ranks first.
In addition, the overall popularity of the data also benefited from the stable performance of Haier Zhijia in overseas markets. According to the quarterly report of this year, Haier Zhijia achieved a year-on-year increase in revenue of 24.6% in overseas markets and a year-on-year increase of 135% in operating profit. The growth of overseas revenue and profit is mainly due to the solid market foundation laid by Haier Zhijia over the years.
This year, foreign countries are still in the midst of an epidemic. Various nights and movement restrictions have increased people's demand for food cold storage equipment and gas stoves. As the representative of major appliances, Haier Zhijia’s main income comes from refrigerators and kitchen appliances.
In March of this year, the UK's authoritative technology evaluation website "Trusted Reviews" announced a washing machine evaluation list, and Haier Zhijia ranked first. Through the analysis of Haier's turnover, it is not difficult to find that 40% of its revenue comes from foreign markets. It can be said that the current size of Haier Zhijia was built on the foreign ship at the same time.
Home appliance giants have started cross-sea mergers and acquisitions, but Haier has earned the market but does not make money?
Nowadays, in the context of the ever-increasing penetration rate of domestic home appliances and the continuous influx of players, it is an indisputable fact that home appliance companies fight price wars in order to gain share. However, in the face of the difficult domestic environment and the ever-changing home appliance market, including the lack of cores and rising raw materials, it has become a trend for domestic home appliance companies to expand their markets abroad to diversify their risks.
In 2020, TCL Technology acquired Samsung's Suzhou plant; in the same year, Midea acquired the Hitachi compressor plant in Thailand. On March 1 this year, Hisense Home Appliances announced that it plans to spend about 1.302 billion yuan to subscribe to Japan's Sanden Holdings Co., Ltd.
Similarly, Haier has also stepped up its own layout. In 2011, it acquired Sanyo, a veteran Japanese home appliance company. In 2012, it acquired Fisher & Paykel, the world's top kitchen appliance company. In 2016, it acquired General Home Appliances for 5.5 billion yuan.
Haier's overseas mergers and acquisitions have achieved their goals. According to Euromonitor International, Haier Zhijia has ranked first in the global retail sales of large household appliances for 12 consecutive years, and has established its own market in North America, Europe, Australia, Southeast Asia and other places. With its comprehensive brand layout, Haier will achieve several-fold growth overseas in the beginning of 2021, leading the entire industry in market share.
Haier's globalization layout, using mergers and acquisitions to obtain global market share, is of course a wise choice at present. However, the layout of globalization also has corresponding shortcomings. The scattered global market has led to the diminishing returns of Haier's scale and the rise of related costs in the short term. Earning performance, but not outstanding in the performance of making money.
Take this quarter as an example, Haier achieved a net profit of 3.054 billion yuan attributable to the parent, a year-on-year growth rate of 185.33%, which is indeed eye-catching, but if you look at the industry comparison, it is not the most prominent one. In Q1 of 2021, Hisense's net profit growth rate reached 400.66%. In terms of net profit volume, Gree's net profit in the first quarter of this year was 3.443 billion yuan. It should be known that Haier's net profit is still low when its revenue exceeds Gree's more than 20 billion yuan and its net profit growth rate also exceeds Gree's 55 percentage points. Gree 389 million.
At the same time, according to the 2021 Q1 performance report, the total operating cost of Haier Zhijia was 51.511 billion yuan, a year-on-year increase of 23.35%; of which, operating costs were 39.17 billion yuan and sales expenses were 7.832 billion yuan. The cost is 2.125 billion yuan. When operating costs and sales expenses remain high, the follow-up is likely to squeeze the overall profit margin.
In contrast, Gree relies on its own advantages in the air-conditioning business and focuses more on domestic layout. The 2019 annual report has disclosed that Gree Electric has 14 major home appliance production bases. In 2020, the number of production bases will increase to 17, adding production bases in Ganzhou and other places. At present, Haier has 15 production bases, of which only 8 are in China. According to public information on the Internet, Midea will also deploy tens of billions of robots in Foshan this year.
In general, Haier Zhijia, which has been expanding overseas for nearly 20 years, has established overseas channels, but it also faces the problem of increasing operating costs caused by the fragmented market. Therefore, Haier Zhijia also had to develop in-depth from its own business.
Speeding up the whole line of ecological brands can help Haier Zhijia to jump out of the valuation "depression"?
During the reporting period, Haier Zhijia continued to make efforts in creating scene brands and ecological brands.
In fact, when Haier Zhijia went public, Zhang Ruimin stated that Haier Zhijia will become China's first listed company with the Internet of Things. Judging from the current actions of Haier, its pace is also accelerating.
In April of this year, Haier Zhijia won the highest honor in the field of artificial intelligence for its innovative application of AI voice care technology in Haier clothing networking products. In the same month, Haier Smart Home established Qingdao Haier Family Artificial Intelligence Industry Innovation Center Co., Ltd. in Qingdao. Its main business scope is the manufacturing and sales of smart home consumer equipment, and Internet of Things application services.
Recently, Haier has also cooperated with Oupai Home Furnishing. Its Haier Yiyi Network will work with Oupai Home Furnishing Group to create a product integration scene entry to seize the domestic home furnishing market. On the day of the release of the financial report, Haier Smart Home and Shimao will serve smart homes again. Launch strategic cooperation to enrich Haier's home ecology.
The scene brand "Triwing Bird" has also provided users with solutions based on the entire scene of smart homes such as balconies, kitchens, and living rooms. There are currently more than 20,000 components, 300+ scene solutions, and more than 200 services.
It can be said that Haier has transitioned from traditional product production to scene and ecological construction, forming solutions for whole house clothing, air energy, and whole house water. Based on the performance of Haier Zhijia in the home ecology, there are opinions in the market that Haier Zhijia deserves a higher market value. Now that Haier Zhijia's full-line acceleration of ecological brands can help it to jump out of the market value "depression"?
Judging from the current market value ranking of A-shares, Midea, Gree, and Haier are respectively 587.988 billion yuan, 352.582 billion yuan, and 311.2 billion yuan; Haier Zhijia’s H shares are 315.5 billion Hong Kong dollars. Not far from Gree, but the market value gap with Midea is still large.
Although Haier Zhijia has a heavyweight layout of home ecology, in fact, apart from the factor of the home appliance market, only from the perspective of the smart home track, there are currently many rivals.
On the one hand, Gree, an old rival, launched the AI voice-based Gree Jinbei-II air conditioner last year, and also expanded to smart kitchens and smart bathrooms based on APP control; in February this year, it launched the first generation of Internet of Things (IOT). The air conditioner "e dazzle" realizes the remote control in advance and the remote setting of the temperature.
For Midea, its own characteristics are also more obvious. It is more abundant in the category of small home appliances. It is not as big as air conditioners and refrigerators, and its flagship full-category smart products are obviously easier to enter the family. In 2019, Meiju APP completed the fifth-generation update. At the April 12 press conference, Midea released dozens of new products at once.
Of course, in addition to these old rivals in the home appliance industry, there are also technical players such as Xiaomi and Huawei. These two can cut into the smart home scene through smart wearable devices. Recently, the two have announced that they have entered the automotive industry chain. Said that there is another gravity bargaining chip. Moreover, Huawei recently launched a "1+2+N" whole-house smart solution. As of December 2020, based on the HiLink protocol, Huawei has received support from more than 600 mainstream home appliance brands worldwide, covering more than 3,000 products. , Has accumulated more than 50 million users, and has become the first camp on the smart furniture track.
On the other hand, as far as the current domestic appliance industry is concerned, although the development of smart homes is accelerating, the market penetration rate still needs to be concerned about the development stage of the industry. For example, domestic home appliance companies have fragmented category distribution, such as Gree's air conditioners, Midea's small home appliances, and TVs from Skyworth and Changhong. If Haier wants to realize its own full-category scene, it must first achieve coverage in the market category, otherwise the full-scale smart home scene is just a fragmented scene. In addition, for users, product replacement is an obstacle. After all, consumer habits are an iterative process of updating, which is difficult to achieve in a short period of time.
In general, Haier Zhijia’s financial report performance is still outstanding, especially in the high-end route and the achievements in overseas markets are worthy of recognition. Under the traction of the Internet of Everything, Haier's smart home may be important to increase the attention of the consumer market. Bargaining chips, but whether it can ultimately increase the overall valuation of the secondary market, perhaps we need to continue to pay attention to how high internal costs can quickly transform to the profit side.
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