Asia Pacific Equity Research 01 February 2016 Overweight Haier Electronics Group Co 1169.HK, 1169 HK Further Thoughts on Qingdao Haier/GE deal, Earnings Price: HK$13.72 ▼ Price Target: HK$18.00 Revisions, FY15 Result Preview Previous: HK$20.00 Qingdao Haier announced further details of its GE Appliances China acquisition. Key takeaways: 1) in the US, GE Appliances will continue Consumer to manage/enhance its brand position; Haier could leverage its existing Shen Li, CFA AC product portfolio to add differentiated offerings to GE's US product (852) 2800 8523 lines. 2) In the Chinese market, GE can leverage the strong distribution
[email protected] channel and local expertise of Qingdao Haier to launch localised Bloomberg JPMA SHLI <GO> products. 3) Qingdao Haier currently sells through the retail channel in Ebru Sener Kurumlu (852) 2800-8521 the US, while GE has established channels across both retail and
[email protected] contract channels. The Haier brand can leverage GE's existing George Hsu relationships through the US retail channel. GE also has long-term (852) 2800-8559 relationships with home owners, property developers, property
[email protected] management agencies and hotel operators. The Haier brand can also Dylan Chu leverage off GE's strong position in these channels. 4) For first 20 years, (852) 2800-8537 Qingdao Haier has the global right to use GE brands and pay 0% royalty
[email protected] J.P. Morgan Securities (Asia Pacific) Limited fees on both exclusive (food preparation, food preservation, household cleaning, household comfort appliances) and non-exclusive products Price Performance (water purifier products).