(Yicai Global) April 29 -- Shares of Haier Smart Home rose after the unit of Chinese home appliances giant Haier Group reported double-digit earnings growth in the first quarter as high-end products accounted for a rising share of income.

Haier Smart Home [SHA: 600690] closed 5.6 percent up at CNY25.91 (USD3.93) in Shanghai today, after earlier gaining as much as 7.7 percent. Its Hong Kong-listed shares [HKG: 6690] gained 6.6 percent to finish at HKD28.30 (USD3.62).

Net profit rose 15 percent from a year earlier to CNY3.5 billion (USD530.6 million) in the three months ended March 31, the Qingdao-based firm said in an earnings report released yesterday. Revenue rose 10 percent to CNY60.3 billion (USD9.1 billion).

Gross profit margin was 28.5 percent, almost unchanged from a year ago, despite surging raw material prices, mainly because of the higher share of income from high-end products. Revenue from the Casarte brand jumped 32 percent.

The company offset the negative impact of rising commodity prices with refined production and efficient delivery, the company said, adding that it will hike output as sales pick up.

Haier Smart Home ranked first in China’s white goods sector in the first quarter, achieving a market share of almost 27 percent, according to data released by market research agency China Market Monitor.

The firm also announced yesterday that it plans to invest CNY3.1 billion to build a high-volume refrigerator plant with an annual capacity of two million units in Qingdao. The first phase is likely to go into operation in July next year. The plant’s payback period is expected to be a little over four years, with an internal rate of return of 24.5 percent, so it will be cost-effective.

Sales of high-volume fridges will continue to grow rapidly over the coming years, as China’s economy is recovering and consumption is upgrading, the company noted, adding that existing capacity will then be insufficient.

Editors: Dou Shicong, Futura Costaglione