Haier Smart Home’s H-shares Debut on Hong Kong Stock Exchange

Haier Smart Home Co. Ltd.’s H-shares started trading on the Hong Kong Stock Exchange Wednesday, marking completion of a restructuring of the Chinese home appliance giant.

The listing of Haier Electronics was officially withdrawn Wednesday as it became a wholly owned subsidiary of Haier Smart Home. Haier Group remains the controlling shareholder of Haier Smart Home with 35.14%.

Previously, Haier Electronics was mainly engaged in the manufacture of domestic washing machines, water heaters and water purifiers as well as distribution covering domestic sales channels, while Haier Smart Home was mainly engaged in refrigerators, air conditioners and overseas household appliances.

The restructuring will help Haier Smart Home establish a unified capital market image and allow investors to focus on one listed stock, the company said. Analysts said it is expected to transform Haier’s operation from top to bottom. Haier’s reorganization followed similar steps by rivals Midea Group and Gree Electric Appliances Inc.

After completion of the reorganization, Haier Smart Home will fully integrate with Haier Electronics both online and offline to provide smart home solutions. The enlarged Haier Smart Home will share resources and build capacity throughout the entire value chain, eliminating the previous overlap of products and channels and achieving significant synergies, the company said.

The old structure had many drawbacks, home appliance industry analyst Liu Buchen told Caixin. It led to confusion about the valuation of Haier Group’s home appliance business and overlapping internal management, increasing operating costs and affecting management efficiency, Liu said.

Following the reorganization, the net profit of Haier Smart Home is expected to reach 15 billion yuan ($2.3 billion) in 2022, analysts at Everbright Securities estimated. During the 2020 first nine months, Haier Smart Home reported that net profit fell 17.2% year-on-year to 6.3 billion yuan as revenue rose 2.8% to 154 billion yuan.

Haier Smart Home said last month that it plans to gradually increase its dividend to 33% of the share price next year, 36% in 2022 and 40% in 2023 as its capital-use efficiency and operational capacity improve after the reorganization.

Haier Smart Home’s A-Shares are listed on the Shanghai Stock Exchange and D-Shares are traded on the Frankfurt Stock Exchange. The H-shares jumped 5.63% on the debut.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com).

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