CICC: Cuts Hisense Home Appliances Group (00921) target price to HK$21.5; third-quarter results below expectations

CICC issued a research report stating that Hisense Home Appliances Group (00921, 000921.SZ) recorded revenue of RMB67.014 billion in the first three quarters of this year, down 6.3% year-on-year; net profit attributable to shareholders was RMB1.849 billion, down 34.2% year-on-year. Third-quarter revenue was RMB20.248 billion, down 8.8% year-on-year; net profit attributable to shareholders was RMB191 million, down 74% year-on-year, below the bank's expectations. The bank maintained its "Outperform" rating, cut the H-share target price by 15.7% to HK$21.5, and also cut the A-share target price by 12.4% to RMB25.5. The bank noted that the results fell short of expectations mainly due to increased external pressures such as rising raw material and ocean freight costs, domestic demand not yet clearly recovering, and slightly slower progress in product mix upgrading, which weighed on profitability in the HVAC business. Domestic demand for major white goods was weak, and the company adopted relatively aggressive pricing strategies to maintain scale, leading to a decline in the share of mid-to-high-end products; combined with raw material prices remaining at high levels, the third-quarter consolidated gross margin fell 2 percentage points year-on-year to 18.2%. On exports, the decline in household air conditioner exports narrowed on a quarter-on-quarter basis, while refrigerator and washing machine exports maintained double-digit growth, but sharply rising ocean freight costs weighed on export profitability. Considering that raw material prices remain high and domestic sales have not yet shown clear signs of recovery, the bank lowered its 2026 and 2027 net profit attributable to shareholders forecasts by 33.6% and 31.2%, respectively, to RMB2.011 billion and RMB2.246 billion.