Haier Smart Home's financial report looks good, but capital is "voting with its feet." What are investors worried about?

Questioning AI · Why has Haier Smart Home’s profit growth significantly slowed to single digits?

Text | Hengxin

Source | Bowang Finance

Recently, the global white appliance giant Haier Smart Home delivered a seemingly impressive 2025 performance report.

The financial report shows that revenue for the year first surpassed 300 billion yuan, with net profit attributable to the parent company reaching 19.55B yuan, both hitting record highs. At the same time, it announced an increased dividend payout ratio to 55% and plans to repurchase shares with an investment of 3 to 6 billion yuan.

Against the backdrop of overall pressure in the global home appliance industry, this “performance report” has attracted market attention.

However, behind the glamorous data of record-high revenue and profit, there are still concerns such as weak profitability, cost control pressures, embracing AI but lacking openness, etc. How this global white appliance leader balances scale expansion with profit quality remains a focus of market attention.

More alarmingly, the day after the financial report was released, Haier Smart Home’s A-shares and Hong Kong stocks both experienced a plunge during trading.

The reaction of the capital market perhaps explains the issue better than the financial data itself.

01

Weak growth behind revenue surpassing 300 billion

On the surface, surpassing 300 billion yuan in revenue in 2025 is indeed a milestone for Haier Smart Home.

But a deeper analysis of the growth structure reveals many worrying signs.

The first warning is the sharp slowdown in net profit growth.

In 2025, Haier Smart Home’s net profit attributable to the parent increased by 4.39% year-on-year, a significant decline from 12.86% in 2024. Compared to 2022-2024, the net profit growth rate exceeded 10% each year, but in 2025, it has fallen into the single digits. This cliff-like drop in growth rate reflects a substantial weakening of its profitability.

The significant decline in Q4 performance further exposes a lack of growth momentum.

According to the financial report, in Q4 2025, Haier Smart Home’s revenue was 3B yuan, down 6.7% year-on-year; net profit attributable to the parent was 2.18 billion yuan, plummeting 39% year-on-year. This data far below market expectations also dragged down the full-year performance. According to China Guojin Research, the main reasons for the Q4 decline are the tapering of government subsidies in China, high base effects, and sharply increased tariffs in the U.S. market.

The overall deterioration of the industry environment has further intensified the growth pressure on Haier Smart Home.

Data from AVC (All View Cloud) shows that in 2025, China’s retail sales of all home appliance categories (excluding 3C) totaled 893.1 billion yuan, down 4.3% year-on-year, with the second half’s retail sales at 421.4 billion yuan, down 16%. The industry is accelerating reshuffling amid stock competition. In this context, although Haier Smart Home achieved countercyclical growth, the quality of that growth is questionable.

Regionally, overseas markets have become the main growth engine but also face challenges.

In 2025, overseas revenue was 68.29B yuan, up 8.15% year-on-year, with a growth rate higher than the domestic market’s 3.05%. Overseas revenue accounts for over 50%. However, overseas markets also face severe challenges: the U.S. continues to increase tariffs on home appliances, imposing high tariffs on Chinese white goods exports; European appliance consumption recovers slowly; emerging markets grow faster but have small bases and face competition from local brands.

Key financial indicators have also worsened. In 2025, Haier Smart Home’s weighted average return on equity was 16.98%, down 0.63 percentage points from the previous year. Operating cash flow net was 154.54B yuan, down 1.2% year-on-year. The decline in these core profitability metrics reflects a deterioration in asset operation efficiency and profit quality.

02

Internal conflicts under the multi-brand strategy

Haier Smart Home has always been known for its multi-brand strategy, owning seven major brands including Haier, Casarte, Leader, GE Appliances, Fisher & Paykel, AQUA, Candy, covering different consumer segments from high-end to mass-market.

However, this seemingly perfect brand matrix has exposed serious “internal friction” in actual operations.

Dispersed R&D resources and redundant investments are primary issues.

In 2025, R&D expenses were 26B yuan, down 6.26% year-on-year, but such a large investment has not yielded many breakthrough technologies. The reason is that the nine brands operate independently, each investing in similar functionalities like smart recognition, precise temperature control, etc. For example, Haier, Casarte, and GE Appliances are all developing similar technologies, leading to serious duplication and dispersed R&D efforts. This resource fragmentation hampers focused efforts to tackle key technologies and affects innovation efficiency.

High marketing expenses are equally concerning.

In 2025, Haier Smart Home’s sales expenses were 10.1B yuan, up 0.8% from the previous year. Without duplicated marketing across brands, optimization might be more feasible. In domestic e-commerce promotions, Haier, Casarte, and Leader launch similar product promotions on the same platforms, with overlapping advertising and coupons, wasting marketing funds and confusing consumers. The same applies overseas, where different brands advertise in the same regions with highly overlapping content and target audiences, making it difficult to establish effective brand differentiation and market coverage.

Price wars among brands erode profits directly.

To compete for market share, different brands under the same group often cut prices against each other. According to “Hao Wai Studio,” if a Haier washing machine dealer lowers the price by 5%, Casarte dealers might follow with a 3% cut, and Leader might cut as much as 8%, leading to a vicious cycle of mutual price cuts, ultimately making it difficult to significantly improve overall gross margins.

Specifically, gross margins of individual brands are severely affected.

For example, Casarte’s high-end products should have higher gross margins, but due to competition with Haier’s high-end offerings, they have to adopt price strategies, causing margins to decline. Haier’s own brand’s margins are also impacted when competing with Leader and Casarte. Leader, aiming to capture the young market, adopts low-price strategies, resulting in significantly lower gross margins, well below industry averages. These data points clearly show how internal brand conflicts severely impact profitability.

03

AI transformation: “Started early but caught late”

As a traditional home appliance manufacturer, Haier Smart Home was among the earliest in China to deploy smart technology, launching U-home in 2006, becoming a pioneer in China’s smart home exploration, followed by smart home strategies and the “Smart Home Brain,” continuously advancing toward deep intelligence.

In 2025, R&D investment reached 33.88B yuan, accounting for 3.54% of revenue, with 25,913 R&D personnel. However, in AI and intelligent transformation, Haier Smart Home faces the awkward situation of “started early but caught late.”

Insufficient foundational technology capabilities are the primary weakness.

Although Haier Smart Home launched the “Smart Home Brain,” it still lags behind Huawei HarmonyOS and Xiaomi Vela in core technologies like operating systems and AI large models. At the AWE exhibition in March 2026, Haier Smart Home unveiled three categories of robot products, demonstrating deep integration of smart appliances and robots, and debuted the industry’s first L4-level intelligent agent suite Seeker, moving closer to the “unmanned household chores” vision. But these innovations mostly remain at the application level, lacking breakthroughs in underlying technologies.

The closed ecosystem limits development potential.

Haier Smart Home’s smart ecosystem mainly revolves around its own products, with limited third-party device access. In contrast, Xiaomi and Huawei have invested in ecosystems and open protocols like HarmonyOS, enabling access to many third-party devices, giving users more choices. This closed nature restricts the scale of Haier’s smart home ecosystem, making it difficult to generate network effects and platform advantages.

Market awareness is also insufficient. Compared to competitors, Haier Smart Home is still seen as a “traditional home appliance manufacturer,” lacking a sense of “tech” and “fashion,” and has little imagination in AIoT ecosystems and B2B “tech stocks” narratives.

Organizational restructuring challenges are significant.

In 2025, Haier Smart Home integrated its household air conditioners, smart buildings, and water network businesses into the “Big HVAC Industry,” connecting internal R&D, supply chain, and channels, reducing redundant investments.

Currently, HVAC accounts for a quarter of revenue, but the goal is to increase this to one-third, then to half, making it a new core growth driver.

However, such large-scale organizational adjustments inevitably involve pain points, and the effectiveness of integration remains to be seen.

Conclusion

Haier Smart Home’s 2025 financial report indeed showcases the scale and strength of a global home appliance giant.

Yet, beneath the halo, many concerns remain.

The 2025 report highlights its scale advantage and global layout but also exposes deep-rooted issues like sluggish growth, declining profitability, and transformation challenges.

With increased dividend payout ratios, Haier Smart Home does possess certain value, but close attention is needed on improving profitability, brand integration, and AI transformation results. After all, in an era of stock competition, scale is no longer the only moat; profit quality and innovation capacity are key to long-term enterprise value.

As for the future path of Haier Smart Home, Bowang Finance will continue to monitor.

Author’s note: Personal opinions, for reference only.