Stock Analysis & Valuation Haier Smart Home Co., Ltd. (690D.DE)

• Previous Close: €2.06
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	0.40	-81
Intrinsic value (DCF)	6.06	194
Graham-Dodd Method	0.40	-81
Graham Formula	4.20	104

Strategic Investment Analysis

Company Overview

Haier Smart Home Co., Ltd. (690D.DE) is a global leader in smart home appliances and IoT-enabled solutions, headquartered in Qingdao, China. Operating across Asia, Europe, the Americas, and Africa, the company specializes in refrigerators, washing machines, air conditioners, and integrated smart home ecosystems. With a diversified portfolio spanning China Smart Home, Overseas Home Appliance, and Other Business segments, Haier leverages AI, IoT, and environmental technologies to enhance consumer convenience. Formerly known as Qingdao Haier, the company rebranded in 2019 to reflect its focus on smart home innovation. Haier’s vertically integrated supply chain, strong R&D capabilities, and global distribution network position it as a key player in the competitive consumer cyclical sector. Its market cap of €28.5 billion underscores its dominance in the furnishings, fixtures, and appliances industry, with a growing emphasis on sustainability and connected living solutions.

Investment Summary

Haier Smart Home presents a compelling investment case due to its strong market position in China and expanding global footprint, supported by €28.6 billion in revenue and €18.7 billion net income (FY 2024). The company’s low beta (0.743) suggests relative stability compared to broader markets, while its robust operating cash flow (€26.5 billion) and €55.6 billion cash reserves provide financial flexibility. However, risks include exposure to volatile consumer demand, geopolitical tensions affecting overseas operations, and high capital expenditures (€-10.1 billion). The modest dividend yield (€0.104/share) may appeal to income-focused investors, but Haier’s growth hinges on continued smart home adoption and competitive pricing against rivals like Midea and LG.

Competitive Analysis

Haier Smart Home’s competitive advantage lies in its early-mover status in IoT-enabled appliances and a vertically integrated supply chain that reduces costs. Its ‘smart home scene solutions’ differentiate it from traditional appliance manufacturers by offering ecosystem integration, though this requires heavy R&D investment. In China, Haier benefits from brand loyalty and extensive distribution, but faces intense competition from Midea (000333.SZ) in cost efficiency and Whirlpool (WHR) in premium markets. Globally, Haier’s acquisition of GE Appliances (2016) strengthened its U.S. presence, but rivals like LG Electronics (066570.KS) lead in OLED and AI-driven innovations. Haier’s debt-to-equity ratio (moderate at €27.9 billion debt vs. €55.6 billion cash) is manageable, but its capital-intensive model could pressure margins if smart home adoption slows. The company’s focus on emerging markets (Africa, Southeast Asia) provides growth avenues but exposes it to currency risks.

Major Competitors

• Midea Group (000333.SZ): Midea is Haier’s closest rival in China, with superior economies of scale and a broader product range (e.g., robotics, HVAC). Its aggressive pricing and manufacturing efficiency challenge Haier’s margins, but it lags in smart home ecosystem integration. Midea’s overseas expansion via acquisitions (e.g., Kuka) diversifies revenue but increases operational complexity.
• LG Electronics (066570.KS): LG dominates premium appliances (e.g., OLED TVs, InstaView refrigerators) and holds a technological edge in AI and display tech. Its strong U.S. and European presence contrasts with Haier’s reliance on China. However, LG’s higher production costs and slower smart home rollout compared to Haier’s ecosystem are weaknesses.
• Whirlpool Corporation (WHR): Whirlpool leads in North American market share but struggles with innovation and margin pressures. Its reliance on traditional appliances (vs. Haier’s IoT focus) and limited emerging-market presence make it vulnerable to disruption. Strong brand equity in laundry products is a key strength.
• Panasonic Corporation (6723.T): Panasonic excels in energy-efficient appliances and B2B solutions (e.g., batteries, industrial systems), but its home appliance segment is smaller than Haier’s. Its strong R&D in sustainability aligns with global trends, but slower smart home adoption in Japan limits growth compared to Haier’s aggressive China strategy.