Haier Smart Home's (06690) shares have dipped approximately 10% year-to-date, primarily driven by market apprehensions regarding its US business exposure. BofA Securities anticipates these concerns will ease following stronger-than-expected second-quarter results, reinforcing the stock's compelling valuation. The firm maintains its Buy recommendation with a HK$31.8 target price.

Projections indicate low double-digit revenue growth for Q2. China's domestic market is expected to accelerate from Q1's 8% to low double digits, fueled by extreme summer temperatures, favorable year-earlier comparisons, and government subsidy initiatives. Product-wise, refrigerators and washing machines should see mid-single-digit expansion, while air conditioner sales could surge around 10%.

Overseas markets similarly forecast low double-digit gains. US revenue momentum may intensify due to price adjustments, with Europe projected at 10% growth. Southeast Asia, Middle East, and Africa regions could exceed 20-25% expansion, while South Asia might leap 30%. Operating margins could widen by 10-20 basis points, benefiting from manageable raw material costs and ongoing efficiency enhancements.

Haier's US subsidiary implemented low single-digit price hikes during the first half to offset tariff impacts, leveraging industry-leading localization. Currently, 60% of US sales originate from local manufacturing, 30% from Mexican imports, and merely 10% from China—significantly reducing tariff vulnerability. The group is further expanding US capacity with a $490 million investment over two years for a new washing machine facility. Simultaneously, production diversification continues through Southeast Asian expansion, including refrigerator manufacturing at its Thailand base.