BofA Securities: Cuts Hisense Home Appliances Group (00921) target price by 4%, maintains "Neutral" rating.

BofA Securities issued a research report stating that it has cut the H-share target price of Hisense Home Appliances Group (00921) by 4% to HK$23.4, maintaining a "Neutral" rating; Hisense Home Appliances Group's export performance remains resilient, but the China market faces greater pressure. Given the decline in China market revenue and intensifying cost inflation, the bank has lowered its 2026 and 2027 forecasts for Hisense Home Appliances Group by 9% and 9% respectively; the A-share target price of Hisense Home Appliances Group (000921.SZ) has been cut by 3% to RMB25.2, with the valuation basis shifted from 2026 to the 2026/27 average, taking into account RMB appreciation and the widening A/H share premium. The bank expects Hisense Home Appliances Group's third-quarter revenue to decline by a mid-single-digit percentage due to weak China revenue (a further deterioration from the low-single-digit level in the second quarter), but this will be offset by relatively steady export growth (similar to the double-digit growth in the second quarter). A less favorable product mix, weaker ability to absorb cost pressure compared with peers, and thin margins all contribute to increased earnings volatility. The bank expects Hisense Home Appliances Group's third-quarter profit decline to be similar to the 34% drop in the second quarter. Given the low base (its full-year adjustment for wholesale raw materials to third parties was fully booked in the fourth quarter of 2025, but will return to normal levels in 2026), revenue and margins may improve compared with the previous quarter. The bank reiterates its "Neutral" rating on Hisense Home Appliances Group, as the company is more vulnerable than peers to the property cycle and cost inflation, has lower margins, and is more dependent on central air conditioning; these factors are already reflected in the valuation.