HAIER SMARTHOME (06690) released its Q3 2025 financial report, showing revenue of RMB 234.05 billion for the first three quarters, a YoY increase of 10.0%, and net profit attributable to shareholders of RMB 17.37 billion, up 14.7% YoY. In Q3 alone, the company generated revenue of RMB 77.56 billion (+9.5% YoY) and net profit of RMB 5.34 billion (+12.7% YoY).

Domestic sales growth accelerated in Q3, with revenue rising 10.8% YoY, while overseas revenue grew steadily by 8.3%. The company’s digital transformation and premium brand strategy continued to drive efficiency, improving profitability.

Key highlights: 1. **Revenue Growth**: Domestic sales were boosted by competitive product offerings and expanded distribution channels, with air conditioner sales surging over 30% YoY. Overseas, emerging markets in South Asia, Southeast Asia, and the Middle East & Africa maintained strong growth, while developed markets like North America and Europe remained stable.

2. **Margin Improvement**: Q3 gross margin reached 27.9%, up 0.1 pct YoY, supported by cost optimization through digital procurement, R&D, and manufacturing domestically, as well as premium branding and supply chain synergies overseas.

3. **Expense Optimization**: Operating expense ratio declined 0.1 pct YoY, with sales and administrative expenses both down 0.1 pct, reflecting efficiency gains from digital transformation and global resource integration. Net profit margin rose to 6.9% (+0.2 pct YoY).

4. **Cash Flow Strength**: Operating cash flow increased to RMB 6.35 billion (+RMB 290 million YoY), driven by higher revenue. Contract liabilities grew 17.9% YoY to RMB 4.15 billion, indicating strong dealer demand.

**Investment Outlook**: HAIER SMARTHOME’s improved incentive mechanisms and ongoing globalization and digital initiatives are expected to sustain revenue and profit growth.

**Risks**: Significant RMB appreciation, intensified overseas competition, and rising raw material costs.