Haier Smart Home's annual report contains basic errors that remain uncorrected after three days; both gross profit margin and net profit margin have declined, with a 45% significant drop in non-recurring profit in a single quarter after deducting non-recurring items.

Ask AI · Did the three-day failure to correct basic errors in the annual report expose management oversights?

Yangtze Business Daily report ●Yangtze Business Daily reporter Shen Yourong

A recently disclosed annual report by Haier Smart Home (600690.SH, 06690.HK), one of the three major home appliance giants, has sparked widespread controversy.

The controversy stems from two areas. First, the annual report’s layout contains a basic error that has not been corrected even after three days, and the chairman’s letter to shareholders uses the “first-person” wording multiple times in a rare way. Second, the company’s performance in the fourth quarter of 2025 declined in both revenue and profits, and the decline exceeded market expectations.

According to the annual report disclosed on March 26, in 2025, Haier Smart Home achieved operating revenue of about RMB 302.3 billion, for the first time breaking through the RMB 300 billion mark, up 5.71% year over year; it achieved net profit attributable to shareholders of RMB 19.553 billion, up 4.39% year over year. In the fourth quarter, in addition to revenue declining, the year-over-year declines in net profit attributable to shareholders and profit after deducting non-recurring items were 39.15% and 45.14%, respectively, with an approximate 60% decline quarter over quarter.

In 2025, Haier Smart Home’s gross margin and net profit margin both declined year over year, while the company’s R&D spending was RMB 10.717 billion, the lowest in the past three years.

Against the backdrop of operating pressure, Haier Smart Home is sending confidence to the market. For the full year 2025, the company will distribute a total cash dividend of RMB 10.755 billion, with a dividend payout ratio of 55%.

On the evening of March 26, Haier Smart Home announced that it plans to repurchase the company’s shares for an amount no less than RMB 3 billion and no more than RMB 6 billion, to be used for an employee share ownership plan.

Double decline in fourth-quarter performance of 2025

Mixed results—this is the market’s assessment of Haier Smart Home’s 2025 scorecard.

On the evening of March 26, Haier Smart Home disclosed its annual report as scheduled. In 2025, Haier Smart Home achieved operating revenue for the first time surpassing the RMB 300 billion threshold, reaching RMB 302.347 billion, up 5.71% year over year; it achieved net profit attributable to shareholders of RMB 19.553 billion, up 4.39% year over year; and it achieved profit after deducting non-recurring items of RMB 18.604 billion, up 4.49% year over year.

From Haier Smart Home’s perspective, this performance growth is not easy to achieve. In 2025, with a reconfiguration of the supply chain, the combination of regional protectionism and non-trade barriers, ongoing geopolitical conflicts, the slow recovery of consumer demand for home appliances in Europe, and other many complex factors all added challenges for the company in increasing its efforts.

Haier Smart Home Chairman Li Huagang said that in 2025, the company delivered a steady and progressive set of results, absorbed the costs caused by various market disruptions, and strengthened its competitiveness.

In the first three quarters of 2025, Haier Smart Home’s operating performance was encouraging. In the first three quarters, the company achieved operating revenue and net profit attributable to shareholders of RMB 234.054 billion and RMB 17.373 billion, respectively, up 9.98% and 14.68% year over year.

However, the operating performance in the fourth quarter suddenly took a turn for the worse, dragging down the full-year growth rate. In the fourth quarter, the company achieved operating revenue of RMB 68.293 billion, down 6.72% year over year, and also declined 11.95% quarter over quarter. This was the first time since the fourth quarter of 2021 that quarterly revenue declined. In the same period, the company achieved net profit attributable to shareholders and profit after deducting non-recurring items of RMB 2.18 billion and RMB 1.711 billion, respectively, down 39.15% and 45.14% year over year, with quarter-over-quarter declines of 59.17% and 67.03%, respectively.

With both quarterly performance indicators declining, and by such a large margin, Haier Smart Home had also seen it occur in the first and second quarters of 2020.

In the fourth quarter of 2025, Haier Smart Home’s gross margin on sales and net profit margin were 24.79% and 3.40%, respectively, declining 3.09 percentage points and 3.51 percentage points quarter over quarter; the net profit margin was less than half of the previous quarter.

Affected by the above performance, on March 27, in the A-share market, Haier Smart Home’s share price once dropped by about 7%, and the H-share decline had reached as much as 8.15%. Although both later narrowed their declines at the close, both were still around 4%.

Notably, while disclosing the annual report, Haier Smart Home also announced that it plans to repurchase the company’s shares through the secondary market for a total amount of no less than RMB 3 billion and no more than RMB 6 billion, to be used for a subsequent employee share ownership plan.

In 2025, Haier Smart Home’s repurchase plan was RMB 1 billion to RMB 2 billion. It repurchased A shares and H shares and completed the repurchase with actual spending of RMB 1.201 billion.

R&D spending shrinks while dividends hit a record high

Haier Smart Home also has some unusual situations.

In its 2025 annual report, Haier Smart Home mentioned “high-end” 61 times, insisting on supporting high-end premiums with original technology.

Haier Smart Home said it is deeply committed to technological innovation, accelerating the development of new quality productive forces, upgrading toward higher-end, intelligent, and greener offerings. Relying on an industry-leading and complete R&D setup, it continues to provide home appliances and tailored smart and convenient living solutions to users worldwide, guiding users’ experience to make a leap forward, achieving an all-round leading position across high-end brands, scenario brands, and ecosystem brands.

By the end of 2025, Haier Smart Home had累计ly applied for more than 112,000 patents worldwide, including more than 73,000 invention patents.

However, in 2025, Haier Smart Home’s R&D spending shrank. In 2025, the company’s R&D spending was RMB 10.717 billion, down RMB 0.571 billion year over year. This marked the first time since 2013 that year-over-year R&D spending declined. From 2013 to 2024, the company’s R&D spending increased from RMB 2.093 billion to RMB 11.288 billion.

Haier Smart Home is not short of cash. In 2025, the company’s net operating cash flow was RMB 26.003 billion, down 1.20% year over year. Even so, the company’s financial condition remains strong.

By the end of 2025, the company’s asset-liability ratio was 57.41%, the lowest level since the end of 2016. The company’s monetary funds were RMB 47.622 billion, and together with time deposits and others totaling RMB 57.603 billion, far higher than its interest-bearing liabilities of RMB 40.766 billion.

Rare shrinkage in R&D spending, and a major increase in Haier Smart Home’s cash dividend. For full-year 2025, the company will distribute RMB 10.755 billion in cash dividends, exceeding RMB 10 billion for the first time; the dividend payout ratio will be 55%, also the highest level since 2005.

Of particular attention is that Haier Smart Home’s annual report contains basic errors.

In terms of layout, the sign-off that should have been placed on page 8 of the annual report—“Haier Smart Home Co., Ltd. Chairman: Li Huagang March 26, 2026”—was incorrectly formatted onto page 2 of the financial report.

The annual report also shows inconsistent measurement units; in the same kind of tables, it includes “billion yuan,” “ten thousand yuan,” and “yuan,” giving a sense of lack of standardization.

In addition, in the “Letter to Shareholders,” the use of “first-person” wording appears. For example, “I think 2026 may still be in the middle-to-late stage of this cycle,” and “Although 2026 is no longer the 1984 year when Haier was founded, in my heart I know that Haier still has the mindset of a teenager when it was founded in 1984.” In a formal annual report, the use of first-person wording is extremely rare.

Worth noting is that as of three days after the basic layout errors in Haier Smart Home’s annual report, Haier Smart Home has not yet made a correction.

Visual China figure