Stock Analysis & Valuation Haier Smart Home Co., Ltd. (600690.SS)

• Previous Close: $25.11
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	31.86	27
Intrinsic value (DCF)	52.45	109
Graham-Dodd Method	3.01	-88
Graham Formula	24.54	-2

Strategic Investment Analysis

Company Overview

Haier Smart Home Co., Ltd. (600690.SS) is a global leader in smart home appliances and solutions headquartered in Qingdao, China. Operating across Asia, Europe, North America, Australia, and Africa, Haier designs, manufactures, and sells a comprehensive portfolio of connected home products including refrigerators, washing machines, air conditioners, water heaters, and kitchen appliances. The company has strategically positioned itself at the intersection of traditional home appliances and IoT technology, offering integrated smart home ecosystems through its three core business segments: China Smart Home, Overseas Home Appliance and Smart Home, and Other Business. As a pioneer in the connected home space, Haier leverages its R&D capabilities in artificial intelligence, software development, and environmental technologies to create differentiated smart living solutions. The company's transformation from Qingdao Haier to Haier Smart Home in 2019 reflects its strategic focus on IoT-enabled products and services in the rapidly growing global smart home market, which positions it uniquely within the consumer cyclical sector.

Investment Summary

Haier Smart Home presents a compelling investment case as a globally diversified leader in the smart home appliance market with strong financial metrics. The company demonstrates robust revenue generation (CNY 286 billion) and profitability (net income of CNY 18.7 billion), supported by healthy operating cash flow of CNY 26.5 billion. With a moderate beta of 0.707, the stock offers relatively lower volatility compared to the broader market. The company maintains a solid liquidity position with CNY 55.6 billion in cash against manageable debt of CNY 27.9 billion, providing financial flexibility for continued innovation and expansion. However, investors should monitor competitive pressures in the global smart home market, currency exposure from international operations, and potential supply chain disruptions affecting the capital-intensive appliance manufacturing sector. The dividend yield, while present, may be less attractive to income-focused investors compared to pure dividend plays.

Competitive Analysis

Haier Smart Home maintains a strong competitive position through its dual advantage of scale manufacturing and technological innovation in smart home integration. The company leverages its extensive distribution network and brand recognition in China while pursuing global expansion through strategic acquisitions and organic growth. Haier's competitive moat derives from its vertically integrated manufacturing capabilities, proprietary IoT ecosystem, and extensive R&D investment in connected home technologies. The company's strategy of offering complete smart home solutions rather than individual appliances differentiates it from traditional manufacturers. However, Haier faces intensifying competition from both traditional appliance giants accelerating their smart home initiatives and technology companies entering the IoT space. The company's success in Western markets remains challenged by established local brands with stronger distribution networks and consumer loyalty. Haier's focus on premium, technology-enabled products positions it well in the higher-margin segments but exposes it to economic sensitivity in consumer discretionary spending. The company's global manufacturing footprint provides cost advantages but also creates operational complexity and supply chain vulnerability.

Major Competitors

• Midea Group Co., Ltd. (000333.SZ): Midea is Haier's primary domestic competitor with massive scale and diverse product portfolio across home appliances. The company demonstrates stronger operational efficiency and cost leadership through vertical integration. Midea has aggressively expanded internationally through acquisitions including Toshiba's home appliance business. However, Midea trails Haier in premium brand positioning and smart home ecosystem integration, particularly in refrigeration and laundry categories where Haier maintains technology leadership.
• Gree Electric Appliances Inc. (GREE.SZ): Gree dominates the Chinese air conditioning market with technical expertise and strong brand loyalty. The company maintains superior margins in its core business through manufacturing excellence and distribution control. However, Gree lacks Haier's diversified product portfolio and global footprint, remaining heavily dependent on the Chinese market. Gree's smart home initiatives have progressed slower than Haier's, and the company faces challenges in expanding beyond air conditioning products.
• Whirlpool Corporation (WHIRL.NS): Whirlpool maintains strong brand recognition and distribution in North American and European markets where Haier is expanding. The company benefits from established retailer relationships and local manufacturing presence. However, Whirlpool has struggled with margin pressure and slower innovation in smart home technology compared to Chinese competitors. Whirlpool's geographic concentration in mature markets contrasts with Haier's emerging market focus, creating different growth trajectories.
• Electrolux AB (ELECT.ST): Electrolux possesses strong premium brand portfolios including AEG and Frigidaire, particularly in European markets. The company demonstrates design excellence and innovation in cooking appliances. However, Electrolux faces structural challenges including high manufacturing costs in Europe and weaker positioning in the Asian market. The company has struggled with profitability compared to Haier, and its smart home integration has progressed more slowly, limiting competitiveness in connected appliances.
• Samsung Electronics Co., Ltd. (SAMSUNG ELECTRONICS): Samsung leverages its technology ecosystem and brand strength to compete in high-end smart appliances. The company benefits from integration with its mobile and TV products, creating a connected home advantage. Samsung leads in display technology and digital interfaces for appliances. However, Samsung's home appliance business receives less strategic focus than its semiconductor and mobile divisions, and the company faces price pressure from Chinese manufacturers in mid-range segments where Haier competes effectively.
• LG Electronics Inc. (LG): LG competes with Haier in premium appliances with strong design and technology, particularly in refrigeration and laundry. The company's strength in displays and components provides technology advantages. LG has developed a comprehensive smart home platform (ThinQ) competing directly with Haier's ecosystem. However, LG faces cost structure challenges compared to Chinese manufacturers and has weaker penetration in the Chinese domestic market, limiting its growth in the world's largest appliance market.