---
title: "Haier splashes out 1 billion to increase investment in Africa"
type: "News"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/news/209595956.md"
description: "Haier Smart Home will acquire 100% equity of ESA, the South African water heater business under the Swedish Elextrolux Group, for a price of 980 million RMB. This transaction will help Haier Smart Home further expand its sales channels and after-sales service system in the South African market, as well as enrich its water heater product lineup. ESA has high profitability, comparable to Haier's water and electricity business. This is an important strategic move for Haier Smart Home to layout in the African market, as the African market has growth potential. According to Research Nester data, the global instant water heater market is expected to grow at a compound annual growth rate of 9% from 2022 to 2031"
datetime: "2024-07-23T11:55:36.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/209595956.md)
  - [en](https://longbridge.com/en/news/209595956.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/209595956.md)
---

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# Haier splashes out 1 billion to increase investment in Africa

Author | Huang Yu

Editor | Zhou Zhiyu

In the new wave of Chinese companies going global, as an experienced player, Haier has made a big move once again.

Recently, Haier Group's home appliance listed company Haier Smart Home (600690.SH) signed relevant transaction documents with Electrolux Group from Sweden, acquiring 100% equity of Electrolux South Africa Proprietary Limited ("ESA") engaged in the water heater business in the South African market and taking over its home appliance business personnel.

The cross-border transaction is valued at 2.45 billion South African Rand, equivalent to about 980 million RMB. This transaction is subject to regulatory approval and is expected to be completed in the fourth quarter of 2024.

Behind this significant acquisition is Haier Smart Home's interest in the century-old water heater brand Kwikot owned by ESA.

It is reported that Kwikot's business covers a variety of products and solutions such as storage-type electric water heaters, solar water heaters, multi-energy solutions, gas water heaters, and heat pumps. It is a leading water heater manufacturer in South Africa with a comprehensive sales channel and after-sales service system in the local market.

Notably, in terms of profitability, ESA's EBITDA profit margin is in double digits, similar to Haier's water and electricity business (operating profit margin of 11.9% in 2023).

According to insights from Haier Smart Home, this acquisition is an important strategic move for Haier Smart Home to layout the African market strategically. By leveraging ESA's sales channels and after-sales network in South Africa, they aim to further enrich the water heater business product lineup and expand the development of Haier's other white goods products in the South African market.

Haier Smart Home's focus on ESA is also due to the growth potential in the African market.

In terms of the water heater market that Haier Smart Home first chose, Research Nester data shows that the global instant water heater compound annual growth rate (CAGR) from 2022 to 2031 is 9%. Among them, North America, the Middle East and Africa, and Latin America are expected to have the highest growth rates, mainly due to the increase in energy efficiency awareness and emerging economies.

Analysts from Huachuang Securities pointed out that this acquisition, as Haier's strategic layout in the African market, not only avoids potential geopolitical risks in China, the United States, and Europe, but also fully benefits from the development dividends brought by the low penetration rate and high economic growth rate of emerging markets, with huge incremental space in the future.

Furthermore, for Haier Smart Home, this acquisition also aims to fill the gaps in the layout in the Middle East and Africa and accelerate the increase in local market share.

According to Euromonitor data, in 2022, Haier's market share in the global home appliance market reached 17.1%, with a market share exceeding 24% in strong regions such as Asia-Pacific and North America, but only 4.4% in the Middle East and Africa market, significantly lower than other regions In recent years, Haier has continued to address its shortcomings in the Middle East and Africa markets. For example, in May of this year, Haier Egypt Ecological Park officially opened with a total design capacity of over 1.5 million units, including air conditioners, washing machines, TVs, refrigerators, freezers, and other categories.

Data provided by Haier shows that previously, Haier Smart Home achieved a doubling of growth in the Middle East and Africa over three years. In Nigeria, Haier refrigerators rank TOP1 in the market; in Egypt, sales of Haier's high-end air conditioning series have cumulatively increased by 122%; in Ghana, high-end drum washing machines have achieved a 30% growth, and so on.

In fact, as early as 1998, Haier officially entered the African market, which was one of the first markets it chose to layout after initiating its globalization strategy.

With its influence and visibility expanding, in 2001, Haier established overseas air conditioning manufacturing bases in Algeria, Nigeria, and Tunisia. In 2019, Haier officially established a trading company in Egypt and transitioned to high-end localization branding in 2020.

As one of the three giants in the Chinese white goods industry, Haier has achieved the most significant globalization effect. This is because its founder, Zhang Ruimin, began to firmly promote Haier's globalization strategy early on, opening up the market with independent brands and overseas brand acquisitions, giving Haier a first-mover advantage.

In terms of revenue contribution, by 2023, Haier Smart Home's overseas market revenue reached 136.4 billion RMB, a year-on-year increase of 7.6%, accounting for 52% of total revenue. Midea Group's overseas revenue accounted for only 40.56%, while Gree's was less than one-tenth.

During its international expansion, Haier has formed a global brand matrix through mergers and acquisitions, acquiring brand business lines, including seven major brands: Haier, Casarte, Leader, Aqua, Candy, GE Appliances, Fisher & Paykel.

According to Huachuang Securities research report, in recent months, the export of home appliances has continued to strengthen. From June to August, the production and sales of air conditioners, refrigerators, and washing machines for domestic sales have shown a basic downward trend compared to the same period last year, while export production has generally maintained growth rates above the high single digits. They believe that emerging markets such as Southeast Asia and the Middle East and Africa have made significant contributions to export-driven growth.

"There are no successful companies, only companies of the times." Zhang Ruimin's forward-looking layout has finally brought Haier into its own era.

Over the past few years, Midea has maintained its position as the leader in revenue, with Haier and Gree competing closely. In terms of market value, Haier has long been at the bottom among the three giants.

However, starting in 2021, under the impact of external factors such as the pandemic, the market landscape of the three white goods giants has changed. The revenue gap between Haier and Gree has widened, and Haier's market value has surpassed Gree's.

In terms of revenue, in recent quarters, Midea achieved revenue of 106.5 billion RMB, Haier Smart Home achieved revenue of 68.98 billion RMB, and Gree Electric Appliances achieved revenue of 36.596 billion RMB, with year-on-year growth rates of 10%, 6%, and 2.53% respectively. Net profits attributable to shareholders were 9 billion RMB, 4.77 billion RMB, and 4.675 billion RMB, with year-on-year growth rates of 12%, 20.2%, and 13.77% respectively Against this backdrop, Haier Smart Home has also become a favorite in the capital market, with its stock price rising nearly 50% this year. Although there has been some correction in the past two months, Haier Smart Home's stock price has still accumulated a nearly 23% increase this year, higher than the stock price increases of Midea and Gree Electric Appliances.

However, as the domestic home appliance market enters a stock stage, exploring overseas markets has become an important direction for major home appliance companies to break through growth bottlenecks in recent years. Therefore, Haier will inevitably face more intense competition in overseas markets in the future.

The challenges that Haier still needs to overcome include how to further enhance its global brand strength, improve its relatively low profit margin, and explore the second growth curve

### 相關股票

- [Haier Smart Home (600690.CN)](https://longbridge.com/zh-HK/quote/600690.CN.md)
- [HAIER SMARTHOME (06690.HK)](https://longbridge.com/zh-HK/quote/06690.HK.md)

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