Citi: HAIER SMARTHOME (06690) Management Targets Flat Year-on-Year Sales and Net Profit This Year; Recovery Expected to Be More Pronounced in the Fourth Quarter

Citi released a research report stating that HAIER SMARTHOME (06690)'s U.S. subsidiary GE Appliances (GEA) management emphasized GEA's core competitive advantages and long-term priorities at an investor conference last week. GEA management expects that the U.S. business can achieve margin recovery through factory consolidation (expected to be completed in 2027-2028), procurement optimization, and productivity improvement. At the Haier Group level, management targets roughly flat year-on-year group sales and net profit (including tariff refunds) for 2026. The bank expects that due to a significantly low base (Q4 2025 sales down 7% year-on-year, net profit down 39% year-on-year), the recovery in Q4 2026 will be more pronounced. The bank noted that GEA's six major competitive advantages include proximity to U.S. consumers, speed from insight to production, resilient logistics infrastructure, a well-established service network, strong innovation and co-creation capabilities, and a balanced regional manufacturing footprint. Long-term priorities include capturing profitable market share, building a best-in-class U.S. operating cost structure, expanding high-growth engines such as air conditioning and water businesses and premium brands, building end-to-end supply chain resilience, and driving company-wide digitalization and transition toward a software solutions business model. Management stated that U.S. industry demand remains weak, and GEA's market share gains are supported by full-category coverage, a multi-brand portfolio, long-established builder/independent dealer relationships, and its own distribution and service network. The bank noted that GEA is consolidating its U.S. factories into integrated manufacturing platforms for refrigeration, laundry, and cooking, with major projects expected to be completed in 2027-2028; 250 productivity projects in the first half of 2026 are expected to deliver approximately US$60 million in savings. The air conditioning and water businesses have achieved a sales CAGR of over 20% since 2021 and maintained double-digit year-on-year growth in the first half of 2026.