Hisense' 2023 Net Profit Reaches CNY 2.837 Billion, Marking a 97.73% Year-on-Year Growth

Consumer Discretionary Author: EqualOcean News, Jiahui Liao Editor: Yiru Qian Apr 01, 2024 04:39 PM (GMT+8)

Hisense achieved remarkable growth in its 2023 annual net profit, outpacing the industry with a year-on-year doubling of performance.

Hisense appliances

On March 29, Hisense Household Appliances (000921:SZ; 0921:HK) released its 2023 annual performance report. The financials revealed that the company experienced a double-digit growth in its annual operational revenue, reaching CNY 85.6 billion, a 15.5% increase from the previous year's CNY 74.115 billion, setting a new record in revenue. Simultaneously, the net profit attributable to the company's shareholders stood at CNY 2.837 billion, compared to CNY 1.435 billion in the previous year, marking an impressive 97.73% year-on-year growth. The net profit, excluding non-recurring gains and losses, attributable to the company's shareholders reached CNY 2.355 billion, compared to CNY 906 million in the previous year, showcasing a substantial 160.07% year-on-year increase.

Hisense primarily engages in the research, development, manufacturing, and marketing of electrical products such as refrigerators, household air conditioners, central air conditioners, freezers, washing machines, kitchen appliances, as well as molds, automotive air conditioning compressors, and comprehensive thermal management systems. The company also provides comprehensive smart home solutions centered around the intelligent upgrade of household appliances. Currently, the company's product portfolio includes eight major brands: Hisense, Ronshen, KELON, HITACHI, YORK, gorenje, ASKO, and SANDEN.

During the reporting period, the HVAC (Heating, Ventilation, and Air Conditioning) business achieved a revenue of CNY 38.652 billion, a 12.04% year-on-year growth; the refrigeration and washing business revenue reached CNY 26.07 billion, a 22.93% year-on-year growth; and the revenue from other core businesses amounted to CNY 12.237 billion, marking a 3.81% year-on-year growth. The company's domestic revenue reached CNY 49.035 billion, a 15.04% year-on-year growth, while its overseas revenue stood at CNY 27.924 billion, a 12.28% year-on-year growth. Direct sales revenue amounted to CNY 52.045 billion, a 15.31% year-on-year growth, while distribution model revenue reached CNY 24.914 billion, an 11.43% year-on-year growth.

In 2023, Hisense Home Appliances achieved growth across all business segments. The central air conditioning business saw a year-on-year increase of 9.3% in main operating income and a 20.5% increase in total profits. Its market share in multi-split systems exceeded 20%. The company's refrigerator business experienced an 18.7% growth in main operating income, while the washing machine business saw a 53.6% increase. The kitchen appliance sector grew by 66% year-on-year, and the automotive air conditioning compressor and comprehensive thermal management segment achieved revenues of CNY 9.05 billion.

On the retail front, Hisense's exclusive stores grew by 25% in 2023, and sales through cross-industry collaborations and home channels increased by over 200%, with an 80% growth in front-end store numbers. Downstream channel revenue grew by 18.6% in 2023, with a 66% increase in air conditioning channel revenue. Additionally, Hisense Home Appliances saw a 23% increase in new members and a 33% increase in member sales. Sales expenses for 2023 amounted to CNY 9.311 billion, reflecting a 15.37% year-on-year increase; management expenses were CNY 2.296 billion, up by 26.07%; and R&D expenses reached CNY 27.795 billion, showing a 21.41% increase.

In 2023, Hisense Home Appliances' overseas business generated revenues of CNY 27.92 billion, marking a 12.3% year-on-year increase. The company accelerated the growth of its overseas proprietary brand influence, deepened localization efforts, and promoted research, production, and sales synergy. Moreover, the establishment of joint ventures empowered brand development in the ASEAN region, with overall revenue growing by over 20% in 2023, including a 70% increase in proprietary brand business.

Regionally, the central air conditioning business saw a 45% year-on-year growth in strategic European markets, driving a 35% overall growth in self-operated businesses. Refrigeration business sales in Western Europe grew by 16.5% year-on-year, and in Eastern Europe by 25.1%, outperforming industry average prices and price indices. In the ASEAN market, market shares in Thailand and Malaysia increased by 2.3 and 3.1 percentage points respectively.

Furthermore, the company's washing machine business led in several subcategories in European markets and experienced a 66.9% increase in overseas sales volume, maintaining rapid growth. The export scale of the kitchen appliance business grew by 250.5% in 2023.

In terms of technological research and development, Hisense Home Appliances has vigorously promoted IPD process transformation and engineer culture development, establishing a research and development center in Europe to further enhance the global R&D system layout and resource synergy. Key breakthroughs have been made in multiple areas such as low-carbon energy efficiency, comfort and health, intelligent preservation, high-efficiency washing and drying, and constant air volume air duct control, maintaining industry-leading technological capabilities and product applications.

As of the time of writing, Hisense Home Appliances' A-share was priced at CNY 31.45 per share, with a total market value of CNY 43.651 billion; its H-share was priced at HKD 24.35 per share, with a total market value of HKD 33.796 billion.