Breaking Down Hisense Home Appliances Group Co., Ltd. Financial Health: Key Insights for Investors

Investors craving a data-driven read should dive into our breakdown of Hisense Home Appliances Group Co., Ltd. (0921.HK), which posted Q1 2025 operating revenue of RMB 24.84 billion (up 5.76% YoY) and a TTM revenue of RMB 93.70 billion as of Sept 30, 2025, while 2024 annual revenue reached RMB 92.75 billion; profitability shows a Q1 net profit attributable to shareholders of RMB 1.13 billion (up 14.89% YoY), TTM net income of RMB 3.68 billion with EPS of 2.70, a ROE of 25.83% and gross margin of 21.05%; balance-sheet metrics reveal total assets of RMB 82.0 billion vs. liabilities of RMB 60.6 billion (debt-to-equity 0.19), cash and equivalents of RMB 4.4 billion against total debt of RMB 2.92 billion, an Altman Z-Score of 2.3 and an interest coverage ratio of 25.27; liquidity and cash-generation are strong with operating cash flow TTM of RMB 7.55 billion and free cash flow of RMB 5.43 billion, while valuation multiples look compelling - EV/EBITDA 2.11, EV/FCF 2.37, P/E 10.36, forward P/E 10.03 and a market cap of HKD 38.12 billion with P/S 0.37 and consensus price target CN¥36.10; read on to unpack what these figures mean for risk, valuation and potential upside.

Hisense Home Appliances Group Co., Ltd. (0921.HK) - Revenue Analysis

• Q1 2025 operating revenue: RMB 24.84 billion, up 5.76% year-over-year.
• TTM revenue as of September 30, 2025: RMB 93.70 billion, up 2.65% year-over-year.
• Full-year 2024 revenue: RMB 92.75 billion, an 8.35% increase versus 2023.
• Revenue per employee: ≈ RMB 1.68 million, indicating relatively efficient human capital productivity.
• Market capitalization: ≈ HKD 38.12 billion; Price-to-Sales (P/S) ratio: 0.37, implying potential undervaluation relative to revenue.

• 5-year trajectory: consistent upward trend in revenue.
• Notable year-on-year jumps: +39.61% in 2022; +29.21% in 2020 (indicative of past accelerated growth periods).

Hisense Home Appliances Group Co., Ltd. (0921.HK) - Profitability Metrics

• Q1 2025 net profit attributable to shareholders: RMB 1.13 billion (up 14.89% year-over-year).
• Trailing twelve months (TTM) net income as of 30 Sept 2025: RMB 3.68 billion; TTM EPS: 2.70 RMB.
• Gross margin: 21.05%, providing a healthy buffer between revenue and direct costs.
• Operating margin: 4.77%, indicating solid operating cost control relative to revenue.
• Profit margin (net margin): 3.59%, showing net profitability after all expenses and taxes.
• Return on equity (ROE): 25.83%, reflecting strong returns to shareholders.
• Return on invested capital (ROIC): 12.14%, demonstrating efficient use of invested capital to generate profits.

• Margin structure: a 21.05% gross margin versus a 4.77% operating margin implies meaningful operating costs (sales, SG&A, R&D) are absorbed but controlled, with net margin narrowing to 3.59% after non-operating items and tax.
• Return profile: ROE of 25.83% signals high equity efficiency; combined with a ROIC of 12.14%, this suggests attractive profitability on both equity and invested capital bases.
• Growth signal: Q1 2025 net profit growth of 14.89% supports momentum but should be monitored alongside margin stability and capital allocation.

Hisense Home Appliances Group Co., Ltd. (0921.HK) - Debt vs. Equity Structure

• Low leverage: a debt-to-equity ratio of 0.19 indicates limited reliance on debt financing relative to shareholders' equity.
• Strong liquidity buffer: cash and equivalents (RMB 4.4bn) exceed reported total debt (RMB 2.92bn), supporting near-term obligations and working capital needs.
• High interest coverage: an interest coverage ratio of 25.27 implies operating income comfortably covers interest expense, reducing refinancing risk.
• Equity base: the reported equity ratio of 0.195 signifies a meaningful equity cushion backing assets.
• Bankruptcy risk: an Altman Z‑Score of 2.3 points to low-to-moderate bankruptcy risk relative to distressed thresholds.

Hisense Home Appliances Group Co., Ltd. (0921.HK) - Liquidity and Solvency

• Current ratio: 1.13 - adequate short-term coverage of current liabilities.
• Quick ratio: 0.96 - near 1.0, indicating a slight dependence on inventory to meet immediate obligations.
• Operating cash flow (TTM): RMB 7.55 billion - strong cash generation from core operations.
• Free cash flow (TTM): RMB 5.43 billion - positive cash after capex, supports reinvestment, dividends, or debt reduction.
• Cash & equivalents YoY growth: +41.55% - materially enhanced liquidity buffer.
• Total liabilities: RMB 72.94 billion (+4.64% YoY) - liabilities rose modestly.
• Equity attributable to shareholders: up 7.18% YoY - improved solvency and shareholder cushion.

• Implication for creditors: coverage ratios near 1x signal manageable short-term risk but warrant monitoring of inventory convertibility.
• Implication for investors: robust operating and free cash flow, plus a 41.55% increase in cash balances, support financial flexibility and potential shareholder returns.
• Balance-sheet dynamics: liabilities rising modestly while attributable equity grows faster suggests gradual deleveraging or equity accumulation.

Hisense Home Appliances Group Co., Ltd. (0921.HK) - Valuation Analysis

• EV/EBITDA: 2.11 - implies a low enterprise value relative to operating earnings, often signaling attractive entry valuation versus peers.
• EV/FCF: 2.37 - indicates efficient conversion of operating performance into free cash flow and a compact valuation multiple on cash generation.
• P/E: 10.36 - a relatively low multiple that can reflect either undervaluation or cyclical/earnings risk depending on context.
• Forward P/E: 10.03 - stable near-term earnings expectations priced into the stock.
• Market capitalization: HKD 38.12 billion with P/S of 0.37 - low revenue multiple suggesting the market assigns modest value to each revenue yuan.
• Consensus price target: CN¥36.10 (range CN¥35.42-CN¥37.00) - analyst coverage points to moderate upside from current levels and a tight target dispersion.

• Interpretation notes: the combination of low EV/EBITDA and EV/FCF alongside modest P/E and P/S suggests the market is valuing both earnings and cash flows conservatively; this merits deeper review of margin sustainability, capital expenditure needs, and working capital cycles.
• Relative comparisons: compare these multiples to domestic appliance peers and historical company multiples to assess whether the discount is structural or cyclical.

Hisense Home Appliances Group Co., Ltd. (0921.HK) - Risk Factors

• Altman Z-Score: 2.3 - indicates low bankruptcy risk but sits below the 'comfort' zone (>2.99) for highest safety; monitor movements in operating performance and working capital.
• Piotroski F-Score: 6 - suggests moderate financial strength with room for improvement in profitability, leverage/ liquidity, and operating efficiency metrics.
• Beta: 0.70 - lower volatility vs. broader market; downside may be cushioned in market sell-offs, but upside participation could be muted.
• Effective tax rate: 14.48% - a relatively low rate that supports net margins but is exposed to potential changes in tax policy or jurisdictional profit shifts.
• Debt-to-equity ratio: 0.19 - low financial leverage, which reduces solvency risk but may imply conservative capital structure that limits return on equity in a low-rate environment.
• Interest coverage ratio: 25.27 - strong ability to service interest, indicating low near-term default risk from interest obligations.

• Liquidity and working capital: with a conservative debt profile, short-term liquidity should be acceptable, but investors should watch receivables, inventory turnover, and cash conversion cycle for operational stress.
• Sector and macro exposures: cyclical consumer demand, supply-chain cost pressures, and raw-material inflation (e.g., steel, semiconductors) can compress margins despite strong interest coverage.
• Regulatory & tax risk: the 14.48% effective tax rate could rise with jurisdictional changes, impacting net earnings and cash taxes paid.
• Market sentiment risk: beta 0.70 indicates relative defensiveness, but earnings surprises or guidance downgrades could drive disproportionate repricing given moderate F-Score.

Hisense Home Appliances Group Co., Ltd. (0921.HK) - Growth Opportunities

Hisense Home Appliances Group Co., Ltd. (0921.HK) shows multiple growth signals across revenue, profitability, balance-sheet expansion and cash generation that investors should monitor.

• Market capitalization: HKD 38.12 billion; P/S ratio: 0.37 - implies market is pricing modest revenue multiple and leaves room for upside if top-line expands.
• Q1 2025 operating revenue: RMB 24.84 billion, up 5.76% YoY - evidence of continued sales momentum.
• Q1 2025 net profit attributable to shareholders: RMB 1.13 billion, up 14.89% YoY - profitability improving faster than revenue.
• Total assets grew 4.64% to RMB 72.94 billion - balance-sheet expansion supporting capacity and investment.
• Equity attributable to shareholders increased 7.18% - strengthening shareholder base and solvency.
• Trailing twelve months operating cash flow: RMB 7.55 billion - strong cash generation to fund growth or deleverage.

• Revenue and profit mix: faster net profit growth (14.89%) vs revenue growth (5.76%) suggests margin improvement or lower costs.
• Balance-sheet capacity: asset and equity growth (4.64% and 7.18%) provide room for capex, R&D, distribution expansion or M&A.
• Cash strength: RMB 7.55 billion operating cash flow (TTM) supports reinvestment, dividend policy or debt reduction.
• Valuation angle: low P/S of 0.37 offers potential upside if revenue and margin trends continue.

Further context on the company's background, ownership and strategy can be found here: Hisense Home Appliances Group Co., Ltd.: History, Ownership, Mission, How It Works & Makes Money