Gree Electric Appliances (000651 CH) Buy: High shareholder returns in a cooling market

研报英文原文证据摘录

Gree Electric Appliances (000651 CH) Buy: High shareholder returns in a cooling market

urchased shares

designated for cancellation. This, combined with its cash dividend, brings the total 52-WEEK PRICE (CNY)

shareholder return to c11%, much higher than its peers under our coverage. 50.00

Estimate changes. The promotion of KingHome brand in the lower price band pushed 42.50

Gree’s online share up by c7ppt y-o-y to 32% in 1Q26 (source: AVC). However, we 35.00

lower our 2026-27 revenue estimates by c7% each, as we see persistently heavy 05/25 11/25 05/26

pressure on air conditioner sales in 2026e, given the phase-out of government Target price: 48.00 High: 48.15 Low: 36.89 Current: 39.51

subsidies and demand pull-forward. We lift our 2026-27 gross margin estimates by Source: LSEG IBES, HSBC Qianhai Securities estimates

1.4-1.6ppt, to reflect the higher-than-expected gross margins in both 4Q25 and

1Q26. We raise our 2026-27 selling expense ratio estimates by c0.3ppt each based Li Quan* (Reg. No. S1700520030002) Analyst, A-Share Consumer Sector

on our refreshed expectations on Gree’s expense control efforts, as it is targeting HSBC Qianhai Securities Limited

li.quan@hsbcqh.com.cn

more market shares. Overall, we cut our net profit estimates by c3%-4% in 2026-27 +86 755 8898 3471

despite higher net margin estimates. In this report, we introduce our 2028 estimates. Kathy Song* (Reg. No. S1700517120001)

Head of A-share Consumer Research

Maintain Buy; lower TP to RMB48.00 (from RMB49.00). We continue to use a DCF HSBC Qianhai Securities Limited

model to value the stock with unchanged assumptions, including a WACC of 8.9% kathy.l.h.song@hsbcqh.com.cn

+86 21 5066 2007

(based on a risk-free rate of 4.25% and a market risk premium of 4.75%) and a

perpetual growth rate of 2.0%.