BOCI maintained its “Hold” rating on Haier Smart Home Co. Ltd. (6690.HK), setting a price target of HKD 22.8 after the bank’s analysis showed the appliance giant’s first-quarter profit fell 15% year-over-year.
The report cited fading domestic subsidies, severe US snowstorms, and foreign exchange losses as primary headwinds. BOCI expects "relatively high downside risk to earnings in the second quarter, as the impact of elevated commodity prices and rising freight rates will gradually emerge."
BOCI's note pointed to a 7% year-over-year revenue decline for the first quarter of 2026. This contrasts with the company's official release, which reported total revenue of RMB 73.69 billion and a net profit of RMB 4.65 billion, representing a sequential increase from the fourth quarter of 2025.
While BOCI sees risks, Haier's management highlighted year-on-year operating profit growth in China and in overseas markets excluding North America. The company is also executing significant shareholder returns, including a RMB 3-6 billion A-share buyback program and the cancellation of over 74 million repurchased shares.
According to Haier's official results, its domestic business saw margin expansion from a premium product shift, outperforming a Chinese home appliance market that contracted 6.2% by retail value. While GE Appliances in North America faced pressure, the company said it is focused on "operational efficiency and capability rebuilding" to counter trade policy and weather impacts.
BOCI believes the company's shareholder return initiatives will help provide some support to the share price against the downside risks. The bank suggested a potential inflection point for the business may not emerge until the second half of 2026.
This article is for informational purposes only and does not constitute investment advice.
