Hisense Home Appliances Group Co.Ltd(000921) (000921)
After 30 years of deep cultivation of white appliances, the battleship of home appliances set sail
The predecessor of Hisense Home Appliances Group Co.Ltd(000921) was established in 1984. In the early stage, it grew into a leading enterprise of Chinese household appliances through ice washing business. In recent years, through several acquisitions and business restructuring, the company has formed a product matrix dominated by refrigerators, washing machines, household air conditioners, central air conditioners and automobile air conditioning compressors. In 2020, the company’s operating revenue was 48.393 billion yuan, with a year-on-year increase of 29.21%. The white power business is still the main revenue source of the company. The central air conditioning business incorporated in 2019 has become a new driving force for the development of the company, and the improvement of export sales has driven the expansion of enterprise scale.
High end and differentiation break the stock competition, and white power goes to sea to build an international enterprise
1) Under the trend of consumption upgrading, the market demand for high-end white electricity is gradually increasing. The share of medium and high-end retail sales of the company’s refrigerator products in 2020 increased by 2.9pct year-on-year. 2) In terms of differentiation, fresh air conditioning meets the healthy consumer demand of consumers. From January to October of 21, the omni-channel retail sales of fresh air conditioning increased by 102% year-on-year. From January to October of 21, the market share of offline retail sales of Hisense fresh air conditioning was 24.11% respectively, ranking second in the industry. 3) The company continues to make in-depth layout overseas and promote going to sea through M & A integration, independent brands and sports marketing strategies. In 2020, the company’s white electricity export accounted for 42.62%.
The prospect of central air conditioning market scale is promising, leading the industry in the second place, and the growth curve is clear
1) In 2020, the market scale of central air conditioning will be 88.21 billion yuan. Due to the increased penetration of hardbound houses and the concept of green and environmental protection consumption, the market scale of central air conditioning is expected to grow rapidly. 2) At present, China’s central air conditioning market is dominated by multi online, which accounts for 58.6% of the central air conditioning market capacity by the end of 2020. The multi online market position will be stable in the future. 3) Hisense series is the absolute leader in the field of central air conditioning. The three brands of “Hitachi + Hisense + York” are parallel. The total market share of the three brands is 14.82%, ranking first in the industry. In the future, Hisense will develop tooling channels to seize the fine decoration market through cost-effective advantages.
Develop the auto parts business of new energy vehicles and create a new third growth curve
The company acquired Sandian and cut into the compressor business of new energy vehicles. 1) It is expected that the expansion of the downstream new energy vehicle market will drive the sales of new energy vehicle air conditioning system. At the same time, the single vehicle value of new energy vehicle heat pump system is higher and the technology is constantly improving. We predict that the market value of Shanxi Guoxin Energy Corporation Limited(600617) automotive air conditioning system will be 19.6 billion yuan in 2025, an increase of 303.29% over 2020. 2) Three power assisted Hisense to quickly enter the new energy vehicle air conditioning industry and enjoy the dividend of the rapid penetration of new energy vehicles in China. At the same time, the company cooperated with three power in management, capital and customers, which is expected to form the third growth curve of the company.
The mixed reform is implemented, the corporate governance structure is optimized, and the strategic investors enable the brand to go to sea
1) The mixed reform of state-owned enterprises helps the company simplify the process, stimulate the enthusiasm of employees, break the original salary system and attract talents. 2) New strategic investors help the company integrate foreign trade resources, open shipping and transportation channels for export, and facilitate the company’s export business.
Profit forecast and valuation
Considering that the company’s traditional ice washing and household air conditioning business continues to promote the high-end and differentiation of products, it is expected that the volume and price will rise, and the performance growth is highly deterministic; In terms of central air conditioning, considering that Hisense Hitachi under the company is the absolute leader in the central air conditioning industry, its market position is stable. We estimate that the company’s revenue from 2021 to 2023 will be 67.224/77.106/84.712 billion yuan, with a corresponding growth rate of 38.91% / 14.70% / 9.87%; The net profit attributable to the parent company was 1.376/1.836/2.213 billion yuan, with a corresponding growth rate of – 12.83% / 33.39% / 20.55%, corresponding to 11.80/8.85/7.34 times the current share price PE respectively. We give the company a “buy” rating of 13xpe for 22 years, corresponding to the target share price of 17.51 yuan.
Risk statement
Price fluctuation of raw materials; The real estate sales and completion are not as expected; Market competition intensifies.
