Bank of China International: Upgrading the target price of Haier Smart Home (06690) to HK$34.3 for a “buy” rating

The Zhitong Finance App learned that Bank of China International released a research report stating that it raised the earnings estimate for Haier Smart Home (06690) by 2.5% this year, but lowered the earnings estimate per share by 2% to 3% from 2026 to 2027, and raised its target price for H shares from 33.4 yuan to 34.3 yuan, and its rating is “buy.”

The Group's revenue for the first half of the year increased 10% year on year and net profit increased 16% year on year. The growth rate of revenue and net profit for the second quarter was similar. The bank indicated that its results for the next quarter beat expectations, and reform efforts gradually paid off. The bank said that it viewed this as a positive surprise, mainly because of the challenges brought about by US tariffs and the pressure on its US business “General Electric Appliances”. This also reflects the Group's effective implementation of digital reforms to increase profit margins.

The bank anticipates that growth momentum may weaken significantly in the second half of this year, especially in the fourth quarter, due to the decline in the marginal effects of trade-in subsidies, but the bank still predicts that profit margins will rise because the Group can achieve a better product portfolio through high-end development and create further operating leverage through organizational streamlining.