Goldman Sachs on Haier Smart Home (600690): 2Q26 Review — Sequential Improvement as Expected, Valuation Not Demanding; Buy
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Haier Smart Home (600690.SS/6690.HK) delivered in-line 2Q26 results, with 1H26 revenue and net profit of Rmb152.1bn and Rmb10.3bn (-3%/-14% YoY) implying 2Q growth of +1%/-13%. Gross margin expanded 0.6ppt YoY to 29.0% despite cost inflation, helped by manufacturing and operating efficiency plus partial tariff refunds, while operating margin slipped 0.4ppt to 8.8% on higher-than-expected marketing spend toward emerging markets. Management guided to further sequential improvement in 2H26 and full-year profit similar to 2025: US revenue growth turned positive in 2Q26, China was roughly flat, and non-US overseas grew faster on emerging-market strength. The company has reorganized around HVAC (residential and commercial, plus water heaters) and overseas expansion, with US growth to come mainly from newer HVAC businesses; no interim dividend was proposed pending other capital-allocation decisions. Goldman Sachs trims 2026-28E EPS by 0.1%/0.2% but maintains Buy with 12-month A/H targets of Rmb29/HK$31 (13x 2028E EPS exit P/E discounted to 2027E at a 9.5% cost of equity), implying 37.3%/44.7% upside from Rmb21.12/HK$21.42 (August 27 close). Key risks: weaker global macro, raw-material cost inflation, marketing/channel savings shortfalls, and Candy integration.