Group 1 - The market is experiencing a decline in volatility, which may create conditions for a breakthrough of previous highs. However, there may be increased volatility in early January due to profit-taking by investors and potential redemption pressure in the ETF market [1] - The overall profit growth of the market is gradually recovering but lacks elasticity, leading to a focus on thematic assets and investment opportunities under grand narratives [1] - It is suggested to start gradually positioning in various thematic investment opportunities in mid to late January [1] Group 2 - The report recommends a selection of "golden stocks" for January 2026, including companies such as Midea Group, Senqilin, and China Ping An, each with specific investment logic and growth potential [15] - Midea Group is expected to benefit from strong B-end revenue growth and a high dividend payout ratio, while Senqilin is positioned to gain from overseas production capacity and pricing power due to EU tariffs [15] - Sunshine Power is anticipated to see high growth in its energy storage business, driven by demand in North America and new product launches [15] Group 3 - Key financial data for the recommended stocks indicates expected earnings per share (EPS) growth for Midea Group from 5.07 yuan in 2024 to 6.37 yuan in 2026, with a price-to-earnings (PE) ratio decreasing from 16 to 12 [16] - Senqilin's EPS is projected to increase from 2.11 yuan in 2024 to 1.83 yuan in 2026, with a PE ratio expected to drop from 10 to 12 [16] - China Ping An is forecasted to have an EPS growth from 6.95 yuan in 2024 to 9.51 yuan in 2026, with a PE ratio decreasing from 10 to 7 [16]

Core Viewpoint - The new round of national subsidies for 2026 is officially launched, effective from January 1, allowing consumers to claim subsidies on platforms like Taobao and Tmall, as well as in over ten thousand offline Tmall stores nationwide [1][5]. Group 1: Subsidy Details - The 2026 national subsidy covers ten categories: refrigerators, washing machines, televisions, air conditioners, computers, water heaters, mobile phones, tablets, smartwatches, and smart glasses, with smart glasses being a new addition for this year [4][7]. - The subsidy rate is set at 15%, with a maximum subsidy of 1500 yuan for energy/water-efficient home appliances and a maximum of 500 yuan for digital and smart products priced under 6000 yuan [4][7]. Group 2: Implementation and Promotions - The subsidy program is initially available in provinces such as Guangdong, Zhejiang, Jiangsu, Anhui, Fujian, Inner Mongolia, Jiangxi, Shanghai, Sichuan, Shandong, Hebei, and Chongqing, accessible through the 'National Subsidy' channel on the Taobao app [4][7]. - From January 1 to 3, Tmall will collaborate with brands like Haier, Midea, Huawei, and Siemens to host the "National Subsidy Renewal Season" event, offering additional discounts and vouchers, with household appliances available at up to 50% off [4][7]. - In 2025, over 3000 categories, more than 10,000 brands, and 500,000 products are expected to participate in the national subsidy program, attracting an average of over 150 million daily visits to the subsidy section on Taobao [4][7].

Core Insights - The Chinese home appliance industry has developed a large-scale and complete industrial system, yet it faces challenges in high-end core components, particularly in the air conditioning sector where reliance on imports remains significant [1][4] - Midea's central air conditioning division has adopted a unique path of "independent innovation + system leadership," providing a model for high-quality development in Chinese manufacturing [1][4] Group 1: Industry Challenges - Despite being the largest market globally, China's air conditioning industry struggles with a lack of self-sufficiency in high-end compressor technology, which affects profit margins and innovation [1] - In 2021, China exported 159 million compressors worth 26.93 billion yuan but imported 16.71 million units valued at 7-9 billion yuan, highlighting the gap in high-end production capabilities [1] Group 2: Midea's Innovation Strategy - Midea has shifted its strategic focus from optimizing external technologies to reconstructing core technologies internally, leading to a significant transformation in its research and development logic [4][5] - Over the past five years, Midea has invested over 18 billion yuan in R&D, concentrating on foundational areas like compressors and control systems, establishing a localized R&D framework [4][5] Group 3: Breakthroughs in Technology - Midea achieved a historic breakthrough in compressor technology, enabling self-research and production, which enhances supply chain security and performance [5] - By 2025, Midea's self-developed ultra-low frequency steady-state technology is expected to receive international recognition, significantly improving energy efficiency and comfort in central air conditioning systems [5][10] Group 4: New Standards in the Industry - The introduction of the "Comfort Golden Triangle" redefines the standards in the central air conditioning industry, shifting focus from technical parameters to user experience [6][12] - This new evaluation system emphasizes "temperature balance, noise balance, and comfort," marking a transition from performance metrics to comprehensive user experience [6][12] Group 5: Market Recognition and Impact - Midea's technological advancements have led to a significant market share in central air conditioning, with recognition from industry awards validating its innovative approaches [10][15] - The "Comfort Golden Triangle" is becoming a benchmark for the industry, indicating a shift where Chinese innovation is not just a participant but a trendsetter [12][15] Group 6: Broader Implications for Chinese Manufacturing - Midea's journey illustrates how Chinese manufacturing can overcome core technological bottlenecks and transition from being "large but weak" to "large and strong" [17] - The company's focus on independent innovation and understanding user needs positions it as a leader in defining future standards and experiences in the global market [17]

Core Viewpoint - A new round of national subsidies has been officially launched, effective from January 1, 2026, covering ten categories of products including refrigerators, washing machines, televisions, air conditioners, computers, water heaters, mobile phones, tablets, smartwatches, and smart glasses, with smart glasses being a newly added category [1][4]. Group 1: National Subsidy Details - The national subsidy rate is set at 15%, with a maximum subsidy of 1500 yuan for energy-efficient appliances and 500 yuan for digital and smart products priced under 6000 yuan [1]. - The subsidy program is available on platforms like Taobao and Tmall, with over 10,000 offline Tmall stores nationwide participating [4]. Group 2: Promotional Activities - From January 1 to 3, Tmall is collaborating with brands like Haier, Midea, Huawei, and Siemens to host a "National Subsidy Renewal Season" event, offering additional discounts of up to 90% and extra consumption vouchers worth 950 yuan [4]. - The promotion allows consumers to purchase home appliances at prices as low as 50% after applying the national subsidy and additional discounts [8]. Group 3: Product Pricing and Discounts - Specific products and their original and discounted prices include: - Gree air conditioner originally priced at 4799 yuan, discounted to 4.1 times lower after subsidies [8]. - Haier refrigerator originally priced at 11999 yuan, available at 50% off after discounts [8]. - Vivo X300 Pro originally priced at 5299 yuan, with a subsidy saving of 500 yuan [8]. - Thunderbird smart glasses Air 4 Pro originally priced at 1888 yuan, eligible for additional discounts [8]. Group 4: Market Reach and Consumer Engagement - By 2025, over 3000 product categories and more than 10,000 brands will be available under the national subsidy program on Taobao and Tmall, attracting an average of over 150 million daily visits to the subsidy section [8].

Core Viewpoint - The Chinese home appliance industry is at a critical juncture, with the theme for 2026 being "going overseas" as domestic market saturation and overcapacity issues become more pronounced. This shift represents a "second entrepreneurship" for companies like Haier, Midea, Hisense, and TCL, marking a decisive battle for the next decade [2]. Group 1: Market Overview - The global home appliance market is nearly 4.5 trillion yuan, indicating significant overseas market potential [4]. - Midea and Haier are projected to generate around 270 billion yuan in revenue each in 2024, translating to a global market share of only about 6% [5]. - Domestic brands struggle to exceed 10% market share in most overseas regions, while leading competitors like Samsung and LG dominate [8]. Group 2: Historical Context and Challenges - Chinese home appliance companies have historically relied on capacity export and brand acquisitions for overseas expansion, but this growth model is becoming less effective [9]. - The gap between global manufacturing share (over 45%) and retail share (less than 20%) highlights a significant challenge in value creation and brand premium [9]. - Haier and Midea's overseas revenue share has stagnated around 50% and 42% respectively over the past five years, indicating a lack of growth [9]. Group 3: Brand and Channel Development - The need for a "second entrepreneurship" in brand and channel development is emphasized, as domestic brands face challenges in replicating their successful domestic strategies in international markets [15]. - Building brand recognition and effective distribution channels in overseas markets is crucial, as traditional strategies may not apply [16][20]. - The complexity of overseas channels, dominated by large retailers, poses significant barriers for Chinese companies [20]. Group 4: Opportunities and Strategies - Technological innovation is seen as a key to overcoming brand premium challenges, with Chinese companies making strides in areas like AI and smart home technology [22]. - Emerging markets such as Southeast Asia and Latin America present significant growth opportunities due to low penetration rates and less established competition [29]. - E-commerce is becoming a vital channel for market entry, allowing brands to reach consumers without heavy investment in physical stores [34]. Group 5: Future Outlook - The transition to a full value chain operation by 2026 signifies a shift from manufacturing management to comprehensive brand and channel strategies [36]. - Success in this transformation is critical for elevating Chinese manufacturing from a "global factory" to a "global brand," enhancing competitiveness in the global market [36].

Investment Rating - The report assigns an "A" rating for the investment in major appliance companies such as Midea Group, Haier Smart Home, and Gree Electric Appliances, indicating a "Buy" recommendation with target prices of 94.68, 31.81, and 50.60 CNY respectively [4]. Core Insights - The 2026 appliance replacement policy is expected to boost consumer demand for home appliances, focusing on energy-efficient products and providing subsidies of 15% of the product price, capped at 1500 CNY per item [1][2]. - The 2026 policy has optimized the subsidy scope, reducing the number of supported appliance categories from eight to six, and lowering the subsidy rate from 20% to 15% for high-efficiency products [2][11]. - The first batch of funding for the 2026 policy amounts to 625 billion CNY, a 23% decrease from the previous year's 810 billion CNY, indicating a potential decline in total subsidy funds for the year [2][12]. Summary by Sections Policy Changes - The 2026 policy focuses on six categories: refrigerators, washing machines, televisions, air conditioners, computers, and water heaters, excluding other appliances like stoves and microwaves [2][11]. - The subsidy for high-efficiency products is now set at 15% of the sales price, with a cap of 1500 CNY per item, and consumers can only receive one subsidy per product category [2][11]. Market Impact - The 2025 replacement policy effectively stimulated appliance consumption, with retail sales of home appliances increasing by 14.8% year-on-year from January to November 2025, and over 12.84 million units replaced [3]. - The introduction of the 2026 policy is expected to improve domestic appliance sales, despite some pressure on consumption due to earlier demand release and high base effects [3][9]. Investment Recommendations - The report suggests focusing on three investment themes: 1. High-quality white goods companies with strong cash flow and high dividend yields, such as Midea Group and Haier Smart Home [9]. 2. Companies with strong global capabilities, particularly in emerging markets where appliance penetration is low [9]. 3. Technology-driven appliance companies that are expanding into new business areas, leveraging AI and robotics to enhance product offerings [9].

Group 1 - Midea Group's stock rose by 1.01% to 79.65 CNY per share, with a trading volume of 327 million CNY and a turnover rate of 0.06%, resulting in a total market capitalization of 605.173 billion CNY [1] - Midea Group, established on April 7, 2000, and listed on September 18, 2013, is primarily engaged in the manufacturing and sales of home appliances, with major products including HVAC systems, kitchen appliances, refrigerators, washing machines, and various small appliances [1] - The company's revenue composition includes 66.58% from smart home business, 25.70% from commercial and industrial solutions, and 8.74% from new energy and industrial technology, with additional contributions from smart building technology and robotics and automation [1] Group 2 - The Oriental Alpha Fund holds a significant position in Midea Group, with the Oriental Alpha Xingke One-Year Holding Mixed A Fund owning 67,000 shares, representing 6.96% of the fund's net value, ranking it as the tenth largest holding [2] - The Oriental Alpha Xingke One-Year Holding Mixed A Fund, established on September 28, 2022, has a current scale of 57.0589 million CNY, with a year-to-date return of 14.96% and a one-year return of 13.88% [2]

1. Report Industry Investment Rating The provided content does not include the report industry investment rating. 2. Core Views - The Chinese refrigeration and air - conditioning equipment industry is at a critical turning point. The domestic household market is in a stable development stage dominated by stock replacement demand, and growth is driven by the improvement of energy - efficiency standards. The report analyzes structural growth opportunities and long - term evolution trends by benchmarking overseas leading companies [2]. - Overseas expansion should focus on local in - depth development and value extension of the industrial chain. It is a systematic project, and mergers and acquisitions are strategic choices. Chinese enterprises are moving from the initial stage of "Made in China, Sold Globally" to the new stage of globalization of "brand, technology, and management" [2]. - The commercial refrigeration field, especially the data center refrigeration track, is a short - term growth highlight. The capital expenditure of overseas HVAC giants is directed towards data center infrastructure, and there is a market for high - end refrigeration solutions due to the need to improve energy efficiency and reduce PUE [2]. - Investment suggestions: In the household refrigeration equipment field, pay attention to industry leaders such as Midea Group; in the special - purpose refrigeration equipment field, focus on companies like Invic and Shenling Environment; for upstream components, pay attention to Hanzhong Precision Machinery, Binglun Environment, and Sanhua Intelligent Control [2]. 3. Summary by Relevant Catalog 3.1 Traditional Refrigeration Equipment Overview - **Global Refrigeration and Air - Conditioning Market**: The global refrigeration and air - conditioning market has shown steady growth. From 2018 to 2024, the global air - conditioner sales increased from 232.5 million units to 261.2 million units, with a compound annual growth rate of 2.0%. The proportion of household air - conditioners in 2024 was 73.7%, and the central air - conditioning market grew faster, with a compound annual growth rate of 4.0% from 2018 to 2024. It is predicted that by 2028, the global air - conditioner sales will reach 293.3 million units, with a compound annual growth rate of 2.9% from 2024 to 2028. Asia, North America, and Europe are important regional markets, and China is the largest single air - conditioning market [22]. - **Household Air - Conditioning**: In the 2024 cold year, China's household air - conditioner production accounted for 80.8% of the global total. Many domestic enterprises are increasing overseas layout. In the 2024 cold year, overseas production capacity increased by nearly 7 million units. In the 2025 cold year, domestic household air - conditioner exports were about 99.29 million units, a year - on - year increase of 16.7%, with the highest export proportion to Asia [28]. - **Central Air - Conditioning and Chiller Units**: There are various types of central air - conditioning and chiller units. The export of screw and centrifugal chiller units for data centers is strong. The Asian market has a large - scale demand and is gradually recovering, while the North American market has a prominent growth rate due to its small base. The domestic market is waiting to stabilize, and leading enterprises are strengthening their competitive advantages [33]. 3.2 Household Market: Domestic Sales Review and Challenges for Leading Companies - **Price Wars and Market Competition**: After several price wars, the concentration of the domestic household refrigeration and air - conditioning market has increased. The competition has evolved from scale and price to technology, product, channel, service, and ecosystem. In 2025, the domestic sales volume of household air - conditioners increased by 8.7% year - on - year, but the growth driven by policies and climate is difficult to sustain. The long - term driving force is stock replacement and structural upgrading [35][36]. - **Energy - Efficiency Upgrade**: China has introduced multiple air - conditioner energy - efficiency standards, which have promoted the transformation from fixed - frequency to variable - frequency air - conditioners. Leading enterprises have advantages in technology and industrial layout for energy - efficiency improvement [39]. - **Challenges for Leading Companies**: In 2024 - 2025, a new round of price wars occurred. Xiaomi's entry has challenged the traditional hardware - profit model. Leading companies are facing challenges in terms of efficiency and sustainable profit growth. They are promoting digital reform, channel and logistics innovation to enhance competitiveness [40][43][44]. 3.3 Overseas Expansion of Domestic Enterprises - **Difficulties and Solutions**: There are differences in regional usage habits overseas. The US market has high access barriers, and the European market has low air - conditioner penetration and high energy - efficiency requirements. Overseas acquisitions are an important way to enter the market. Chinese enterprises are accelerating overseas production capacity construction in Southeast Asia and other regions [52][54]. - **Southeast Asian Market**: Exports to ASEAN are on an upward trend. In 2024, China's cumulative exports of white goods to ASEAN reached $14.87 billion, a year - on - year increase of 19.8%. The demand in the ASEAN market is driven by urbanization and industrialization [63]. 3.4 Overview of Overseas Representative Enterprises' Operations - **Business Models and Strategies**: Overseas HVAC representative enterprises have different business models and strategies. Johnson Controls has transformed from an equipment manufacturer to a builder of smart building ecosystems; Trane Technologies has upgraded its services and transformed its strategy; Daikin has acquired relevant enterprises to supplement its data center refrigeration business [73][82]. - **Performance of Leading Enterprises**: Leading international enterprises such as Trane Technologies, Johnson Controls, Carrier Global, and Vertiv have shown different performance. They are all focusing on high - growth areas such as data center refrigeration [83][86][87][88]. 3.5 Commercial Market: Pay Attention to Refrigeration Demand in Data Centers - **Demand for Data Center Refrigeration**: The development of AI and other industries is expected to drive the construction of data centers. The demand for data center capacity is expected to increase at a compound average growth rate of 19% from 2023 to 2030. Reducing the energy consumption of refrigeration equipment is crucial for the green and low - carbon development of data centers [94]. - **Refrigeration Technologies**: There are various data center refrigeration technologies, including water - cooled, air - cooled, indirect evaporation cooling, "glacier" phase - change cooling, and liquid cooling. Liquid cooling has advantages in energy consumption, and the development of liquid - cooling technology is a trend [96][104]. - **Investment Suggestions**: Enterprises in different segments are recommended, including traditional HVAC enterprises such as Midea Group, precision temperature - control equipment enterprises such as Invic, special - purpose air - conditioner manufacturers such as Shenling Environment, and upstream component enterprises such as Hanzhong Precision Machinery, Binglun Environment, and Sanhua Intelligent Control [112][113].

Core Insights - Shunde, known as "Fengcheng," is a key industrial hub in Guangdong, with a total industrial output exceeding 1 trillion yuan, featuring two major industrial clusters worth 300 billion yuan each in home appliances and machinery [1] - The 2025 Shunde Top 100 Enterprises list reflects the region's economic strength, with 138 companies achieving a total revenue of 12,222.29 billion yuan, and 67 companies appearing on all three major rankings [2] Industry Overview - Manufacturing is the backbone of Shunde's economy, with 82.01% of the top 100 enterprises being manufacturing firms, generating 7,908.07 billion yuan in revenue, accounting for 64.71% of the total [3] - Private enterprises, including those with Hong Kong, Macau, and Taiwan investments, make up 86.23% of the list, contributing 10,875.73 billion yuan, or 88.98% of total revenue [3] Regional Distribution - The highest number of listed companies is from Beijiao Town, with 28 companies generating 8,283.63 billion yuan, followed by Ronggui Street (24 companies, 1,555.45 billion yuan) and Daliang Street (22 companies, 633.42 billion yuan) [3] Financial Performance - The entry threshold for the 2025 Shunde Top 100 Enterprises is 786 million yuan, a decrease of 39 million yuan from the previous year, with total revenue surpassing 1.1 trillion yuan, marking a 27.04% year-on-year increase to 11,988.84 billion yuan [7] - The top three companies are Midea Group (4090.84 billion yuan), Country Garden (2527.57 billion yuan), and Hisense Home Appliances (927.46 billion yuan) [7] Company Highlights - Midea Group, established in 1968, has over 400 subsidiaries and 38 R&D centers globally, serving over 500 million users [7] - Hisense Home Appliances is a major player in the HVAC, refrigeration, and kitchen appliance sectors, with multiple brands under its umbrella [9] - China Liansu, recognized as a leader in the pipeline industry, has expanded its overseas operations in several countries, enhancing its global footprint [11]

Core Insights - The report maintains a positive outlook on the home appliance sector, particularly focusing on the cost reduction potential of aluminum replacing copper in air conditioning systems [2][5] - The adoption of aluminum-copper technology is seen as a significant step towards reducing production costs amid rising copper prices and resource scarcity [10][15] Group 1: Aluminum-Copper Technology Impact - The use of aluminum instead of copper in air conditioning units can lead to substantial cost savings, with estimates suggesting a reduction of 208 to 277 RMB per unit when replacing 50% of copper, and up to 416 to 554 RMB when replacing 100% [11][12] - Copper currently constitutes about 26% to 33% of the cost in standard air conditioning units, with high-end models reaching over 40% [11][12] - The global market has seen significant adoption of aluminum-copper products, particularly in Japan where approximately 40% to 50% of air conditioners use aluminum heat exchangers [15][16] Group 2: Domestic Market Challenges - Despite the cost advantages, the domestic promotion of aluminum-copper air conditioners faces challenges, including inferior thermal conductivity and corrosion resistance compared to copper [19][20] - Consumer perception is a major barrier, as negative opinions about aluminum's reliability persist, complicating market acceptance [19][20] - The first domestic aluminum-copper air conditioner was launched by Wanbao in collaboration with JD.com, targeting the mid-to-low-end market, which may help accelerate industry-wide material transitions [16][17] Group 3: Industry Performance and Trends - The home appliance sector has shown mixed performance, with the overall index increasing by 0.44%, while specific segments like white goods and black goods experienced varied changes [21][22] - Recent data indicates a decline in domestic sales growth for air conditioners, refrigerators, and washing machines, reflecting broader market challenges [33][47] - The report highlights the importance of monitoring raw material prices, with copper and aluminum prices showing significant fluctuations that could impact production costs [29][31]