格力电器2026年第一季度：国内市场疲软，缓冲能力有限

Rating Price Target ?000651.CH RMB 6.1B, reflectingGree's high China exposure (~85-90% of revenue)and limited overseasbuffer comparedto its peer's diversifiedportfolio.Basic EPS was RMB1.09 (+1.87%YoY)Operating cash flow declined29%toRMB7.8B, indicating weak workingcapital dynamics.Using Haier's Q1as reference (China retail -6.2%, North America down 10% from weather,overseas ex-US strong double-digits), Gree's modest growth suggests domestic marketweaknesswaspartiallyoffsetbysmalleroverseasoperations. growthwasanemicindicatingmargincompressionfromweakdomesticdemandandlimited pricing power.Selling expenses jumped 15% to RMB2.6Band managementexpenses surged29%,far outpacing3.5%revenuegrowth.R&D declined15%toRMB1.4B.Finance income fell significantly despite interest income, suggesting higher borrowingcosts. Non-recurring gains of RMB 380M (primarily RMB 353M fair value gains on financialassets)masked underlying operational weakness.Gree's domestic-heavy exposure likelyamplifiedthese headwinds. whileinventoryreductionsuggests defensivedestockingratherthan healthysell-through.Contract liabilities plunged-19%,indicatingweakeradvancecustomer payments andsuggesting Q2 revenue visibility is poor.Inventoryfell asmanagementdestocked defensively.Accounts receivablerose +11% despite only 3.5% revenue growth,indicating collectionpressure or extended payment terms.Cash increasedto RMB 126.0B but short-termborrowingsremained elevatedat RMB67.5B.TheRMB567M buyback (reducing treasurystock to RMB 1.1Bfrom RMB 1.7B)appears opportunistic but doesn't address fundamentaldemandweakness. marketweaknesswithoutenoughoverseasdiversificationcushion,making near-activities consumed RMB17.6B including RMB 35.7B debt repayments and RMB 5.7Bdividends, with RMB 23.9B new borrowings - indicating ongoing refinancing needs. IfHaier'scommentaryaboutChinaretailweakness,commoditycostpressures,anduncertainlackofscaleoverseasoperationsleaveitfarmorevulnerabletoprolongedChinaweaknessThe 29% SG&Aexpense growth suggests mounting competitive pressurerequiring higherpromotional spending.Until Chinademand stabilizes or Greemeaningfully scales overseas(unlikely near-termgiven capital intensity),risk/rewardappears unfavorabledespitelowvaluation. EXHIBIT 3: Gree FY25 results References to"Bernstein"orthe"Firm"inthesedisclosures relateto the following entities:Bernstein Institutional Services LLC (April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024onwards),SanfordC.Bernstein(HongKong)Limited盛博香港有限公司，SanfordC.Bernstein(Canada)Limited,SanfordSanfordC.BernsteinJapanKK（7才一下·C·八一个株式会社）andanalystsemployedbySocieteGeneraleAfrica Technologies &Services to produce Bernstein research under a Global Services Agreement inplace between Bernsteinand Societe Generale. otherwise, for purposes of these disclosures,references to Bernstein's“affiliates"relate to both SG and AB and their respectiveaffiliates. their outlook for growth and returns. Ourtargetprice forGree is RMB44basedon 7.0xNTM+1P/E RISKS GreeElectricAppliancesIncof Zhuhai Upside risks:+ACvolume sales andASPgrowthbetterthanexpected +Grossmargins improvementbetterthanexpectedDownside risks: +AC volume sales andASPgrowth worse than expected + Gross margins improvement worsethan expected+Overseas demandworsethan expected RATINGSDEFINITIONS,BENCHMARKSANDDISTRIBUTION EQUITYRATINGSDEFINITIONS Bernstein brand The Bernstein brand rates stocks based on forecasts of relative performance for the next 12 months versus the S&P 500 forstocks listed on the U.S.and Canadian exchanges, versus the Bloomberg Europe Developed Markets Large and Mid Cap PriceReturn Index EUR (EDME)for stocks listed on the European exchanges and emerging markets exchanges outside of the AsiaPacific region, versus the Bloomberg Japan Largeand Mid CapPrice Return Index USD (JPL)for stocks listed on the Japanese(ex-Japan) exchanges -unless otherwise specified. The Bernstein brand has three categories of ratings: .Outperform:Stock will outpace themarket index bymorethan 15pp : Market-Perform: Stock will perform in line with the market index to within +/-15 pp.Underperform:Stock willtrail theperformance of themarket indexbymore than15pp oneventsanddevelopments. (EDMFI)indexfordeveloped Europeanbanks and Payments,theBloomberg Europe5OOInsuranceIndex(BEINSUR)forEuropeaninsurers, the S&P 5O0 and S&PFinancials for US banks and Payments coverage, S5LIFE for US Insurance, the S&P InsuranceSelect Industry (SPSllNS) for US Non-Life Insurers coverage,and the Bloomberg Emerging Markets Financials Large, Mid andSmall Cap Price Return Index (EMLSF) for emerging market banks and insurers and Payments. Ratings are stated relative to thesector (not the market). : Neutral (N): Stock will perform in line with the market index to within +/-10 pp : Underperform (UP): Stock will trail theperformance of the relevantindex by morethan 10 pp Coverage Suspended:Coverage of