GREE(000651) 国泰君安·2024-09-02 09:49Investment Rating - The report assigns a rating of "Accumulate" to Gree Electric Appliances (000651) with a target price of 52.00 CNY, slightly down from the previous forecast of 52.12 CNY [2][12]. Core Views - Gree Electric Appliances has shown stable performance in its main business with an improvement in profitability. Despite a general decline in industry shipment demand, the company, as a leading player, demonstrates strong resilience and remains undervalued, making it a worthwhile investment [6][12]. Summary by Sections 1. Investment Recommendation - The report suggests maintaining an "Accumulate" rating based on a cautious approach, reflecting a downward adjustment in earnings forecasts for 2024-2026 [12][23]. 2. Performance Overview - For the first half of 2024, Gree reported a revenue of 100.29 billion CNY, a year-on-year increase of 0.5%, and a net profit attributable to shareholders of 14.14 billion CNY, up 11.54% year-on-year. The second quarter of 2024 saw revenues of 63.69 billion CNY, a slight decline of 0.63% year-on-year, while net profit was 9.46 billion CNY, up 10.47% year-on-year [14][16]. 3. Revenue Breakdown - The company's main business segments performed well, with air conditioning accounting for 78% of revenue, followed by other segments such as home appliances and industrial products. The revenue from air conditioning grew by 11% year-on-year, while other segments also showed positive growth [15][16]. 4. Profit Quality - Gree's gross margin for the first half of 2024 was 30.82%, an increase of 1.68 percentage points year-on-year, and the net margin was 13.85%, up 1.47 percentage points year-on-year. The second quarter's gross margin was 31.35%, reflecting a similar upward trend [16][18]. 5. Cash Flow and Financial Position - The company ended the first half of 2024 with cash and cash equivalents totaling 131.47 billion CNY, a slight increase from the end of 2023. However, operating cash flow saw a significant decline, with a net cash flow from operating activities of 8.06 billion CNY in the second quarter, down 77.32 billion CNY year-on-year [18][19].