Strong refrigeration industry Haier Smart Home's revenue hit a new historical high in 2023, with double-digit growth in net profit | Financial Report Insights

Relying on the advantages of multi-brand layout and the continuous strong performance of the refrigeration industry, Haier Smart Home achieved double-digit growth in revenue and profit in 2023.

On the evening of March 27, Haier Smart Home released its 2023 fiscal year report ending on December 31, 2023. The financial report shows that in 2023, Haier Smart Home's total revenue increased by 7.33% year-on-year to 261.428 billion RMB, with a net profit attributable to the parent company of 16.597 billion RMB, a year-on-year increase of 12.8%, and a non-net profit attributable to the parent company increased by 13.3% year-on-year to 15.824 billion RMB. In addition, the gross profit margin reached 31.5%, up 0.2 percentage points from the same period last year.

Benefiting from the application of digital management tools, efficiency improvements in marketing resource allocation and logistics distribution, Haier Smart Home's management expense ratio and sales expense ratio both optimized year-on-year in 2023. However, due to overseas interest rate hikes, the company's financial expense ratio deteriorated by 0.3 percentage points to 0.2%.

Haier Smart Home announced that it will distribute a cash dividend of 8.04 RMB per 10 shares to all shareholders, with a planned dividend amount of 7.47 billion RMB, and stated:

"Starting in 2024, we will continue to increase the dividend payout ratio, with cash dividend ratios in 2025 and 2026 not less than 50%."

Strong Advantage in the Refrigeration Industry, Annual Revenue Exceeds 80 Billion

In the full year of 2023, benefiting from the significant decline in domestic bulk raw material prices and the rationalization of competition in the major home appliance industry, the profitability of the home appliance industry has improved.

The report shows that as Haier Smart Home's most advantageous industry, the refrigeration business achieved global revenue of 81.91 billion RMB in 2023, a year-on-year increase of 5.2%, consolidating and expanding its leading position in the global refrigeration industry.

According to Gfk data, Haier Smart Home's online & offline market share in the domestic refrigeration market also significantly expanded, with year-on-year increases of 1.3 and 1.1 percentage points, reaching 45.2% and 40.3% respectively, both exceeding 40%.

The second important business segment is in the field of HVAC and hot water, where Haier Smart Home ranks in the second tier domestically.

Haier stated that in the household air conditioning sector, it has filled the gaps in core components over the past two years. Joint ventures for compressors and self-developed projects for computer boards have improved the company's R&D and manufacturing integration efficiency, contributing to an increase in profitability. The significant construction of the distribution network will also provide strong support for increasing market share in central air conditioning and household air conditioning.

In 2023, the company's air energy solutions achieved revenue of 46.104 billion RMB, a year-on-year increase of 13.1%. Among them, in 2023, the industry's first integrated high-energy air machine - Casarte Nebula air conditioner, sold 110,000 units in its first year, driving the share of high-end units above ten thousand RMB to 37%. The water industry achieved global revenue of 15.336 billion RMB in 2023, an 8.5% increase from the same period in 2022, with domestic revenue exceeding 12 billion RMB for the first time; In 2023, Haier Smart Home's hot water heater industry retail sales reached 50.5 billion yuan, a year-on-year increase of 7.4%. Among them, the retail sales of electric water heaters increased by 5.8% year-on-year, accounting for 46% of total sales. Haier's hot water heater business achieved high-quality and high-profit results, with both gas and electric water heaters holding the top market share domestically; water purifiers continue to increase market share in China.

Relying on the advantages of a full range of home appliance products, Haier Smart Home continues to focus on smart home solutions.

In 2023, Three Birds focused on complete set home appliance design tools, digital store construction capabilities, enhancing scenario solution experiences and sales capabilities. In 2023, Three Birds' retail sales in stores increased by 84% year-on-year, with complete sets accounting for over 60%.

The company's Nest Building design tool has over 500 3D home appliance design modules and real floor plans for over 90% of communities nationwide, providing users with professional home appliance design solutions. Three Birds added nearly 1500 touchpoints, improving the efficiency of complete product sales through localized scenario solution customization and professional delivery services.

Deepening Development in Overseas Markets, 24% Revenue Growth in Europe

Thanks to Haier Smart Home's adherence to high-end brand strategy, continuous product structure upgrades, and enriched product portfolio strategies, in 2023, the company achieved overseas revenue of 136.412 billion yuan, a 7.6% increase from the same period last year, with market size growing by 1.5% year-on-year.

Looking at different regions, in the largest North American market, Haier Smart Home's core home appliance market share grew, with full-year revenue reaching 79.751 billion yuan in 2023, a 4.1% year-on-year increase. The company stated that while continuously enhancing high-end brand and product leadership, it is also expanding into new industries, new channels, and actively exploring smart ecological transformation.

Benefiting from improved product and supply chain competitiveness, Haier Smart Home's revenue in the European region surged by 23.9% year-on-year to 28.544 billion yuan, with retail market share increasing by 1 percentage point to 9.1%.

Despite weak market demand, Haier Smart Home achieved market share growth in the Australia-New Zealand market through product innovation, model changes, and dual-brand operations. In addition, Haier Smart Home saw revenue growth of over 10% year-on-year in the South Asian and Southeast Asian markets, and a 2.6% year-on-year revenue increase in the Japanese market.

In 2024, as developed countries are expected to enter an interest rate reduction cycle, the real estate market is expected to gradually recover, driving growth in home appliance demand and creating a favorable market environment for the export of home appliance products