Key takeaway

HISENSE HA released its 1H26 results. Overall operations were under pressure in 1H26, mainly due to a sharp correction in China's air conditioner market from a high base following the national subsidy program, compounded by persistently high copper prices, foreign exchange effects and other cost-side disruptions. However, structural highlights remained prominent. The refrigerator and washing machine businesses recorded strong growth against market headwinds, overseas markets delivered broad-based growth, the general home appliance business returned to profitability, and expense control remained effective. Looking ahead to 2H, the refrigerator and washing machine businesses are expected to remain steady, exports of residential air conditioners should gradually recover, and central AC should improve from a low base. Together with lower oil prices and the dissipation of disruptions in the Middle East and Africa, profitability is expected to improve QoQ.

Event

On August 17, 2026, HISENSE HA released its 1H26 results.

In 1H26, the company recorded revenue of RMB46.766bn (-5.22%), net profit attributable to shareholders of the parent company of RMB1.658bn (-20.16%), adjusted net profit attributable to shareholders of the parent company of RMB1.332bn (-26.69%), and a net margin of 3.55% (-0.66 pct).

On a quarterly basis, revenue in 2Q26 was RMB23.706bn (-3.25%), net profit attributable to shareholders of the parent company was RMB623mn (-34.33%), and adjusted net profit attributable to shareholders of the parent company was RMB492mn (-39.25%).

Risks:

1) Macroeconomic volatility risk: global economic development continues to be affected by uncertainties such as geopolitical conflicts and inflationary pressures. If persistent macroeconomic pressure slows the growth of residents' disposable income, consumer demand for home appliances will be dampened.

2) Market competition is intensified: industry competition is more intense in a weaker market environment, so the company faces the risk of market share loss and low-price competition, which will drag down profits.

3) Raw material price volatility risk: unexpected changes in the supply-demand dynamics of upstream commodities will directly feed through to product manufacturing costs. Meanwhile, amid the restructuring of global supply chains, volatility in international ocean freight rates and rigid increases in regional labor costs may create compounding cost pressures across multiple stages, placing sustained pressure on the company's profit margins.

4) Exchange rate volatility risk: sharp one-way exchange rate movements may create a mismatch between selling prices and raw material procurement and localized operating costs. In particular, local currency depreciation in emerging markets will weaken the price competitiveness of exported products and squeeze the gross margin of overseas operations.

5) Risk from a complex global trade environment: to strengthen protection for domestic industries, some countries have erected trade barriers by imposing additional special tariffs and mandating local procurement. Such policies directly increase the company's product compliance certification costs and tariff burden, and may lead to a temporary loss of market share in certain regions.