Honeywell and Haier Collaborate - Analyst Blog

Honeywell International Inc. (HON) and Haier Group have entered into an agreement to jointly develop and promote low-emission, high energy-efficiency products and solutions. A memorandum of understanding (MOU) was signed by the companies at the U.S.- China Trade and Economic Cooperation Forum.

The new technology from the joint effort of Honeywell and Haier are to improve the proficiency and cleanliness of household appliances, intelligent home systems, residential heating, building automation and mass transit.

The products to be made will be based on Honeywell's non-ozone depleting Enovate® blowing agent, such that the new devices meet the standards set by the U.S. Department of Energy's Energy Star program and comply with the efforts being made by China's Ministry of Environmental Protection to outdate the use of ozone-depleting blowing agents by 2015.

Further, Honeywell's low-global-warming-potential refrigerants and blowing agents will be used to make air conditioners, refrigerators and solar-power water heater solutions, helping the country to meet its goal of declining per unit GDP's carbon dioxide emission by 40% to 45% from 2005 levels by 2020.

In addition, Honeywell Technology Solutions China and Haier's research and development organization will work together on Haier's intelligent home program.

Honeywell's attractive collection of businesses has the potential to earn consistent above-average returns. The company's focus on working capital management, free cash flow generation and balance sheet strength remain positive attributes in the current weak environment.

The company is a global leader in refrigerants, aerosols and foam-insulation blowing agents, which are used to replace ozone-depleting Chlorofluorocarbon and Hydro chlorofluorocarbons. These products also improve the energy efficiency of homes, appliances and commercial refrigeration systems.

The company continues to invest in big process initiatives as well as other seed planting across the organization. Honeywell's operating system, velocity product development and functional transformation continue to be huge enablers for growth and productivity this year.

However, the company remains cautious on the timing and the continued pace of the economic recovery. Honeywell will continue to be much disciplined in cost controls and exceedingly careful about adding to infrastructure.

Given the continued uncertainty in the macro environment, the company will continue to take a relative conservative approach in its planning. It is still in the early stages of recovery although well positioned for good growth in 2011 given the improvement in major end markets. Major competitors of Honeywell are BorgWarner Inc. (BWA), Johnson Controls Inc. (JCI) and United Technologies Corporation (UTX).

Honeywell International Inc. is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology  for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.

Honeywell currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

 
BORG WARNER INC (BWA): Free Stock Analysis Report
 
HONEYWELL INTL (HON): Free Stock Analysis Report
 
JOHNSON CONTROL (JCI): Free Stock Analysis Report
 
UTD TECHS CORP (UTX): Free Stock Analysis Report
 
Zacks Investment Research