BofA Securities highlighted that HAIER SMARTHOME (06690) has seen its shares decline approximately 10% year-to-date, largely due to market apprehensions regarding its U.S. business exposure. The firm anticipates stronger-than-expected second-quarter results will ease these concerns, emphasizing the stock's compelling valuation while reiterating a "Buy" recommendation with a HK$31.8 target price.

Projections indicate low double-digit revenue growth for Q2. In China, expansion is expected to accelerate from Q1's 8% to low double digits, fueled by scorching summer temperatures, favorable year-earlier comparisons, and government stimulus measures. Product-wise, refrigerators and washing machines may see mid-single-digit gains, with air conditioners rising about 10%. Overseas markets also forecast low double-digit growth: U.S. revenue momentum could strengthen through price hikes, Europe may expand 10%, while ASEAN/Middle East/Africa regions could surge 20%-25%, and South Asia potentially leaps 30%. Operating margins might widen by 10-20 basis points, benefiting from manageable raw material costs and ongoing efficiency enhancements.

HAIER SMARTHOME's U.S. subsidiary implemented low single-digit price increases with peers during H1 to offset tariff impacts. The company maintains the industry's highest localization rate—60% of U.S. sales are domestically manufactured, 30% sourced from Mexico, and just 10% imported from China—minimizing tariff vulnerability. Additionally, the group is expanding American production capacity, planning a $490 million investment over two years for a new washing machine facility while relocating some output to Southeast Asia, including refrigerator manufacturing in Thailand.