Haier Smart Home's revenue surpasses 300 billion for the first time, but declining profitability raises market concerns.

Ask AI · How Do U.S. Tariffs Affect Haier Smart Home’s Overseas Earnings?

Haier Smart Home disclosed its 2025 annual report. Revenue first surpassed RMB 300 billion, but the net profit growth rate has fallen to a single-digit level. This was mainly dragged down by a drop in fourth-quarter performance, rising raw-material costs, and overseas tariffs. The company’s share price fell by more than 8% at one point the next day during intraday trading. The company plans to carry out hedging to deal with cost fluctuations and announced that its dividend payout ratio will be steadily increased over the next three years.

On March 27, shares of Haier Smart Home—A shares and H shares—both saw a sudden plunge during intraday trading. The largest intraday decline for A shares was nearly 7%; it closed down 3.81% to RMB 22.23 per share. For H shares, they fell by more than 8% at one point during intraday trading; they still closed down 4.12%, with the closing price at RMB 21.88 per share.

On the evening of March 26, Haier Smart Home disclosed its 2025 annual report. Full-year revenue first surpassed RMB 300 billion, reaching RMB 302.35B, up 5.71% year over year; net profit attributable to shareholders reached RMB 19.55B, up 4.39%; and net profit attributable to shareholders after deducting non-recurring gains and losses under China’s accounting standards reached RMB 18.6B, up 4.49%.

From the 2025 annual report data, although both revenue and net profit achieved growth, judging by the rate of performance growth, Haier Smart Home’s profitability has clearly deteriorated.

Compared with 2022 to 2024, Haier Smart Home’s net profit growth rate exceeded 10% in each of these three years. In 2024, net profit grew 12.86% year over year, and non-recurring items–adjusted net profit grew 12.52% year over year; however, in 2025, the net profit growth rate has fallen to a single-digit level.

Cai Shumin / Photo

In the letter to shareholders, Haier Smart Home’s Chairman Li Huagang said: “Looking back, Haier Smart Home’s business environment has been one of the most volatile years in history.”

The first thing to be hit is the complex external environment—In 2025, the United States imposed large tariffs on home appliances exported from China. High-end home appliances exported to the U.S. need to reconfigure supply chains. Regional protectionism and non-tariff trade barriers compound each other, making the operating environment for Chinese companies going overseas more complicated than in the past. The Russia-Ukraine war is still ongoing, and the Red Sea is adding another layer of crisis.

On the demand side, in the U.S., high interest rates combined with tariff-driven inflation are affecting U.S. consumers’ demand for home appliances; Europe’s home appliance consumption has been recovering slowly; and China’s weak real estate market and the diminishing effect of home-appliance subsidy policies have also brought fluctuations and downward pressure on prices to China’s home-appliance retail market.

Haier Smart Home’s full-year net profit growth slowed mainly due to the drag from a decline in fourth-quarter performance. In the fourth quarter, revenue was RMB 8B, down 6.72% year over year and down 11.95% quarter over quarter from the third quarter. Profitability also worsened noticeably. In the fourth quarter, net profit attributable to shareholders was RMB 68.29B, down 39.15% year over year and down 59.17% quarter over quarter from RMB 2.18B in the third quarter; after non-recurring items, net profit was RMB 5.34B, down 45.14% year over year.

The gross margin also fell again. In 2025, gross margin was 26.7%, down 1.1 percentage points compared with the same period in 2024. In its financial report, Haier Smart Home mentioned that in the domestic market, in the fourth quarter, the continued rise in bulk commodity materials such as copper and the rapid intensification of competition in China led to an accelerated decline in the industry’s average price. The cost-reduction effects from the “extreme cost” strategy the company has promoted and from connecting cost-reduction across the entire process were offset by the above factors. In overseas markets, product competitiveness led by localized demand, the implementation of global supply-chain layout, and the building of a digital platform: the positive impact brought by implementing the extreme cost strategy was offset by negative impacts such as high tariffs.

Over the past year, influenced by multiple factors including a rise in global demand and tighter supply, copper prices have shown a strong upward trend. At the same time, as one of the main raw materials required for air-conditioning products, copper’s price fluctuations have created cost pressure for home-appliance companies.

To reduce product cost fluctuations caused by raw-material price volatility, Haier Smart Home announced that the company and its subsidiaries plan to conduct hedging business for bulk raw materials. The contract value will not exceed RMB 5.63 billion; the quota will be reusable with a validity period within 12 months; and the funds will be from the company’s own resources. The types of hedging instruments are limited to copper commodity varieties related to production and operation. Trading methods are not limited to derivatives such as futures and forwards, swaps, and options; it will not carry out speculative or arbitrage trading purely for the purpose of making profits.

In addition, on expenses: in 2025, selling expenses increased 0.8% year over year, and administrative expenses increased 13.41% year over year. Finance costs decreased by -105.24% year over year due to foreign-currency appreciation and an increase in exchange gains; R&D expenses decreased 6.26% year over year.

For the 0.3-percentage-point year-over-year increase in the management expense ratio in 2025, Haier Smart Home’s financial report mentioned that “in the fourth quarter, one-time expense outlays were incurred to improve efficiency in the organization for the European market, and additional investment was made to strengthen organizational-building efforts in order to develop emerging markets.”

While disclosing its performance, Haier Smart Home also announced that it will distribute cash dividends to all shareholders of RMB 8.867 per 10 shares (including tax). The total amount planned to be distributed in dividends is about RMB 1.71B (including tax). The combined dividend amount already distributed in the 2025 interim period corresponds to 55.0% of net profit attributable to shareholders.

Since Haier Smart Home was listed on the Shanghai Stock Exchange in 1993, it has cumulatively delivered cash dividends of RMB 48.7 billion. From 2023 to 2025, the dividend payout ratio has been steadily increasing. Haier Smart Home announced that over the next three years, the cash dividend payout ratio will steadily increase compared with the 2025 dividend payout ratio. In 2026, the dividend payout ratio will not be less than 58%; in 2027 and 2028, it will not be less than 60%.

Reporter Cai Shumin

Text editor Ma Yunfei