Despite a Heavy Revenue Mix From the US, We View Tariff Impact on Haier as Manageable

Seasoned home appliance manufacturer Haier Smart Home has been among the top brands globally for the past decade with a stronghold in refrigerators, laundry appliances, water heaters, and air conditioners. We ascribe the company’s industry-leading role to its effective multibrand strategies, robust product-development capabilities, and broad distribution coverage through online and offline channels. For domestic products, Haier positions its namesake brand for mass-market consumers while targeting the premium Casarte brand to wealthy households. As Casarte products have outperformed in sales growth versus Haier’s other brands in China, we expect high-end products to improve the company's overall revenue mix over the next few years. Also, we think the Chinese government's ongoing subsidies for home appliance trade-ins should boost Haier's domestic sales.