Summary of Key Performance Indicators for Hisense Home Appliances in the First Half of 2026
Hisense Home Appliances' performance in the first half of 2026 fell short of expectations, with revenue reaching 46.766 billion yuan (a decrease of 5.22%) and net profit attributable to the parent company at 1.658 billion yuan (a decrease of 20.16%). The company had hoped to offset domestic weaknesses through overseas markets, but despite a 4.56% growth in overseas sales, exchange rate losses and low gross margins dragged down profits. Air conditioning, as the core business (accounting for nearly 48% of revenue), continued to decline, with a reduction in gross margin. Additionally, an increase in accounts receivable and a decrease in cash flow raised concerns about the quality of earnings.
I. Overseas Growth: Expansion Without Profit
The overseas market is a key focus for Hisense, but the growth in the first half was more like a loss-making effort:
- Significant exchange rate losses: Financial expenses surged by 256% to 148 million yuan, mainly due to exchange rate fluctuations when converting foreign currency earnings into RMB, which eroded profits.
- Low gross margins: The gross margin for overseas operations was only 11.21%, compared to 28.22% in the domestic market. This is because overseas operations incur additional costs such as tariffs, freight, local marketing fees, and compliance certification expenses, which significantly reduce profitability despite high sales volumes.
- Size does not equal profit: Although regions like Europe and North America saw good sales, the quality of globalization was compromised. Experts suggest that true globalization requires localization (such as local production and procurement) and brand premiumization, rather than simply relying on scale.
II. Increased Accounts Receivable and Reduced Cash Flow
Although revenue decreased by only 5%, profits and cash flow declined more sharply, indicating issues with cash turnover:
- Growing accounts receivable: Accounts receivable increased by 24.59% compared to the end of last year. This is partly due to slow payment from overseas customers and concerns that domestic distributors may be holding inventory with extended credit terms.
- Less actual cash on hand: Net operating cash flow decreased by 39%. In other words, while the company recorded profits on paper, the actual amount of cash available was reduced. This suggests that sales at the retail level may have slowed down, putting pressure on cash collection. In a mature market, relying on extended payment terms to expand scale is not sustainable.
III. The Air Conditioning Business Struggles
Air conditioning is a vital pillar for Hisense, accounting for nearly 48% of revenue, but its performance in the first half was poor:
- Double-digit decline in both revenue and profit: Revenue from the air conditioning segment fell by 5.66%, and the gross margin decreased by 2.88 percentage points to 24.24%. This reflects weak industry demand and issues with the company's competitiveness, such as a lack of pricing power or poor cost control.
- Inadequate contribution from other businesses: The ice and washing business grew by 12.88%, but its scale is too small to compensate for the decline in air conditioning sales. Experts emphasize that Hisense needs to improve air conditioning's volume, pricing, and profitability to turn things around.
IV. Industry Opportunities Unexploited
Not all home appliance companies are struggling; other white goods manufacturers have managed growth by capturing market share, adjusting product portfolios, and improving efficiency. However, Hisense has failed to keep up:
- Right direction but lack of execution: The strategies of globalization and diversification are correct, but the overseas business did not generate profits, and the core air conditioning business did not improve.
- Quality of earnings is crucial: Even if revenue recovers in the future, if gross margins remain low, accounts receivable are high, and cash flow is weak, it will only be a case of trading profits for scale, which does not represent genuine improvement.
In summary, Hisense's main problems in the first half of 2026 were a weak core business, low-quality overseas growth, and pressure on cash flow. To overcome these challenges, the company must first improve its air conditioning business and transform its overseas operations from focusing on scale to generating profits.
(Note: All data comes from Hisense Home Appliances' 2026 half-year report and industry analysis.)