Core Viewpoint - Gree Electric Appliances is a leading company in the A-share market known for its substantial and consistent dividend payouts, which have become a core value label for the company. However, concerns about the sustainability of these dividends and the company's growth prospects are evident, as Gree faces challenges in revenue growth and strategic alignment [5][6][7]. Group 1: Dividend and Financial Performance - Gree's cumulative dividends have exceeded 170 billion yuan since its listing, while the company has only raised 5 billion yuan from the market, highlighting a significant disparity between dividends and capital raised [5]. - The company has maintained a high dividend payout ratio of over 50% in recent years, likening its dividends to a perpetual bond that provides fixed returns to shareholders [25][28]. - Despite a rolling PE ratio of approximately 7, significantly lower than competitors like Haier and Midea, Gree's stock price remains stable due to its consistent dividend policy [25][28]. Group 2: Revenue and Business Structure - Gree's revenue has stagnated around 200 billion yuan from 2018 to 2024, with a projected decline of about 7% year-on-year for 2025, indicating a passive development situation amid increasing market competition [7][22]. - The company's revenue is primarily derived from its manufacturing business, with a smaller portion from other business activities, which have fluctuated due to market conditions [10][11]. - The share of Gree's air conditioning business has decreased from 97.4% in 2011 to 86.6% in 2023, while the share of home appliances has seen minimal growth, reflecting challenges in diversifying its product offerings [13][15]. Group 3: Market Position and Competition - Gree's international business remains underdeveloped, with its market share not exceeding 20%, trailing behind competitors like Midea and Haier, primarily due to its conservative approach to overseas expansion [18][19]. - The company faces significant competition from both established players and emerging brands, complicating its efforts to regain market share and achieve growth in a challenging environment [50][51]. - Gree's channel reform efforts aim to streamline operations and improve profitability, but the effectiveness of these reforms in driving growth remains uncertain [51][60]. Group 4: Challenges and Strategic Outlook - Gree is currently navigating multiple internal and external challenges, including a prolonged inventory destocking cycle and declining demand in both domestic and international markets [22][48]. - The company's reliance on a high dividend payout may limit its ability to invest in growth initiatives, creating a paradox where maintaining dividends could hinder long-term strategic flexibility [60][61]. - The ongoing channel reforms are critical for Gree to adapt to market changes, but the complexity of its governance structure and the need for consensus among diverse stakeholders pose significant hurdles [59][61].

Summary of the China Consumer Appliances Sector Conference Call Industry Overview - **Industry**: China Consumer Appliances Sector - **Focus**: White goods, specifically air conditioners (AC), washing machines (WM), and refrigerators Key Points from the Expert Call 1. **4Q25 Shipment Revisions**: - Shipments for AC, WM, and fridges have been revised down to -20%, -1%, and -3% year-over-year (YoY) respectively. - This decline is attributed to weak domestic demand due to fading trade-in subsidies, a high base from 4Q24, and rising copper prices [3][4]. 2. **Domestic Subsidies Outlook**: - There are diverging opinions on whether domestic trade-in subsidies will be extended into 2026. - Some experts believe extensions are likely due to unreleased replacement demand and the 2027 recycling target, while others argue for an end to subsidies due to diminishing impacts and low availability in the second half of 2025 [3][4]. 3. **2026 Domestic Shipment Forecast**: - Expected changes in shipments with subsidies: AC -2.0%, WM +1.9%, fridge -1.5% YoY. - Without subsidies, the forecast is: AC -5.4%, WM -2.2%, fridge -4.1% YoY. - The outlook is lower than previous forecasts due to recent cuts in 2025 shipment numbers. - The demand for WM is expected to remain stronger than for refrigerators in 2026, influenced by product upgrades and previous demand pull-forward during COVID [4]. 4. **Overseas Market Outlook**: - Global white goods volume is expected to grow by 1.5% YoY in 2026, with specific growth rates for AC, WM, and fridges at +2.5%, +1.2%, and +0.5% YoY respectively, assuming stable US tariffs. - Chinese export volumes for AC, WM, and fridges are projected to decline by -4.0%, +0.2%, and -4.3% YoY due to rising overseas capacities and high US tariffs. - Key export markets for China in 2026 include Latin America, Africa, Indonesia, and Japan, although increased production capacities in Southeast Asia may reduce reliance on Chinese exports [4]. Stock Implications - **Caution on Sector**: The outlook for the China home appliance sector is cautious due to a post-subsidy down-cycle expected from Q3 2025 to 2027, with intensified competition. - **Preferred Stocks**: Midea and Haier are favored for their overseas growth potential and strong defensiveness, while Gree is viewed with caution as it is primarily a domestic AC player [5]. Risks Identified - **Sector Risks**: - Risks include a downturn in the property market affecting demand, elevated raw material prices, and global supply chain constraints impacting exports [7]. - **Company-Specific Risks**: - **Gree**: Risks include reduced demand due to property policy tightening, rising raw material prices, foreign exchange losses, increased competition, and lower-than-expected dividends [8]. - **Midea**: Risks include tighter property market policies, RMB exchange rate fluctuations, and slowing growth in the global robot market [9]. - **Haier**: Risks include declining refrigerator demand, slow adoption of smart appliances, and high raw material costs [9]. This summary encapsulates the key insights and forecasts from the conference call regarding the China consumer appliances sector, highlighting both opportunities and risks for investors.

Investment Rating - The report maintains a "Positive" investment rating for the home appliance industry [11]. Core Insights - The Federal Reserve announced a 25 basis point reduction in the federal funds rate to a target range of 4.00%-4.25% on September 18, 2025, marking a return to a rate cut cycle after nine months. This cycle is expected to continue for the remainder of the year and into the next two years [2][5]. - The impact of the rate cut on the supply side of the U.S. home appliance industry is significant and has a higher transmission efficiency compared to the demand side, which typically shows improvement with a delay of 1-2 quarters after the end of the rate cut cycle [6][24]. - The revenue contribution from the recent rate cut to domestic appliance companies may not be evident in the short to medium term, necessitating further observation of the U.S. economic fundamentals [8][48]. Summary by Sections Introduction - The report analyzes the effects of the Federal Reserve's monetary policy easing on domestic appliance companies that have established a significant presence in the U.S. market [5][16]. Response of the U.S. Home Appliance Industry to Rate Cuts - On the supply side, U.S. appliance manufacturers typically see a turning point in new order amounts immediately following the initiation of a rate cut cycle, with shipment growth rates usually aligning with new orders or lagging by one quarter [6][22]. - On the demand side, while historical data shows that demand for home appliances improves after rate cuts, this improvement is often delayed until 1-2 quarters after the last rate cut [24][30]. Stock Performance of Appliance Companies During Rate Cuts - Anticipation of rate cuts tends to boost stock prices of U.S. appliance companies initially, but actual performance is often driven by valuation post-announcement. Recent cycles have shown muted stock performance due to the industry's maturity [7][34]. - Historical analysis of Whirlpool's stock performance indicates that while the stock tends to perform well before rate cuts, it often experiences a pullback after the cuts are implemented [34][38]. Investment Recommendations - The report suggests focusing on high-quality industry leaders with structural growth and high dividend returns, recommending companies like Midea Group, Haier Smart Home, and Gree Electric for their strong domestic and emerging market sales [8][48]. - Additionally, it highlights brands with global reach and product diversification, such as Anker Innovations and Ninebot, as potential investment opportunities [8][48].

行业研究丨深度报告丨家用电器 [Table_Title] 如何看新兴市场白电景气度与格局？ %% %% %% %% research.95579.com 1 丨证券研究报告丨 报告要点 [Table_Summary] 受益于居民户均收入突破临界拐点，过去几年东南亚、拉美及中东非等新兴市场家电渗透率迎 来加速提升，行业长期保持高景气，同时国内企业凭借深入的本地化布局与产品及性价比等方 面优势正逐步抢占日韩系与欧美系企业份额。展望后续，国内市场面临潜在的基数与需求前置 压力，增长中枢或边际放缓，海外成熟地区家电也已基本进入存量阶段，而新兴市场当前渗透 率仍处于相对低位，且国内品牌保有较大份额提升潜力，有望为国内家电企业规模增长贡献长 期势能。 分析师及联系人 [Table_Author] 陈亮 SAC：S0490517070017 SFC：BUW408 请阅读最后评级说明和重要声明 2 / 20 %% %% %% %% research.95579.com 2 [Table_Title2] 如何看新兴市场白电景气度与格局？ [Table_Summary2] 新兴市场家电景气度如何？ 国内出口表现与上市公司财报的交 ...

Investment Rating - The report indicates a positive investment outlook for the home appliance sector, with a recommendation to focus on undervalued stocks with high dividends and stable growth potential [3][4]. Core Insights - The home appliance sector index outperformed the CSI 300 index, rising by 1.8% compared to the 1.3% increase in the CSI 300 [3][4]. - Key companies such as Lek Electric, Stone Technology, and Huaxiang Co. led the gains, while companies like Yitian Intelligent and Zhejiang Meida faced declines [3][8]. - Stone Technology reported significant sales growth during the Black Friday period, with a 41% increase in vacuum cleaner sales and a 361% increase in washing machine sales in Europe [3][12]. - The report highlights three main investment themes: 1. **Self-Electric**: The reversal of real estate policies is expected to benefit the white goods sector, which is characterized by low valuations and high dividends [3]. 2. **Exports**: Companies like Ousheng Electric and Dechang Co. are recommended due to their stable profitability and expanding customer orders [3]. 3. **Core Components**: The demand for key components is expected to exceed expectations, with recommendations for companies like Huaxiang Co. and Shun'an Environment [3]. Industry Dynamics - The report notes a decline in domestic sales for major appliances in October 2025, with air conditioning production down by 27.9% year-on-year and sales down by 20.1% [34]. - Refrigerator production and sales also saw declines, with production down by 9.8% and sales down by 6.11% [40]. - Washing machine production remained stable with a slight decline of 0.2%, but exports increased by 6.41% [43]. - The report emphasizes the impact of rising raw material prices, particularly copper and aluminum, which have increased by 22.52% and 7.50% year-on-year, respectively [14]. Data Observations - The home appliance sector's performance in October showed a mixed picture, with air conditioning and refrigerator sales declining, while washing machine exports increased [34][40][43]. - The report provides detailed statistics on the sales performance of various appliances, indicating a challenging market environment for domestic sales [34][40][43].

Investment Rating - The report maintains a positive outlook on the home appliance sector, with the sector index outperforming the CSI 300 index, increasing by 1.8% compared to the 1.3% rise of the CSI 300 [4][5]. Core Insights - The report highlights significant sales growth for Stone Technology during the Black Friday period, with a 41% increase in vacuum cleaner sales and a 361% increase in floor washing machines in Europe [4][13]. - Luck Electric announced its participation in a private equity fund, investing 20 million yuan, which represents 62.40% of the total subscription amount, focusing on equity investment in Shenzhen Cloud Leopard Intelligent Co., a semiconductor company [4][14]. - The report identifies three main investment themes: 1. White goods benefiting from favorable real estate policies and low valuations, recommending companies like Hisense, Midea, and Gree [4]. 2. Export-driven companies like Ousheng Electric and Dechang Co. are expected to see revenue growth due to large customer orders [4]. 3. Core components in the white goods sector are expected to see increased demand, with recommendations for companies like Huaxiang and Shun'an [4]. Data Observations - In October 2025, the air conditioning sector saw a total production of 10.13 million units, a year-on-year decrease of 27.90%, with domestic sales down 21.30% [4][36]. - The refrigerator sector reported a production of 8.27 million units, down 9.8% year-on-year, with domestic sales decreasing by 10.76% [4][42]. - The washing machine sector experienced a slight production decrease of 0.2%, but exports increased by 6.41% [4][46]. - The report notes that raw material prices for copper and aluminum have risen, with copper prices up 22.52% year-on-year [4][16].

Core Insights - The air conditioning industry is undergoing a critical phase of "breaking through and restructuring," driven by policies promoting low-carbon transformation and extreme high-temperature weather, which together release market demand [1] - The report aims to provide a comprehensive overview of industry trends, consumer market dynamics, and user needs, while analyzing benchmark cases of comfortable and healthy air conditioning [1] Policy and Technology - The dual drivers of policy guidance and technological innovation are reshaping the air conditioning market, promoting energy-efficient products and supporting the green transformation of the industry [2] - National and local policies, such as the "Accelerating Energy Conservation and Carbon Reduction in the Building Sector," provide strategic guidance and policy support for energy-saving renovations [2] Market Dynamics - The air conditioning market is entering a mature phase with a stable scale, where online sales account for 60% of the market, highlighting the dominance of traditional e-commerce as a core traffic entry point [5] - Price differentiation is evident in online sales, with low-priced (below 1599) and high-priced (above 3000) 1.5P wall-mounted units both seeing increased market share [5] Consumer Demand - Social media discussions reflect the evolving consumer demands for air conditioning, with energy efficiency, comfort, cooling performance, aesthetics, and health becoming the top topics for 2025 [9] - The shift from basic temperature regulation to a focus on comfort, health, and aesthetics indicates a significant evolution in consumer expectations [11] High-End Market Trends - The high-end air conditioning segment is evolving towards a comprehensive experience that integrates extreme comfort, health purification, aesthetic design, and smart connectivity [13] - The transition from "selling products" to "selling lifestyles" emphasizes the need for air conditioning solutions that cater to specific living scenarios and emotional needs [15] Consumer Segmentation - The main consumer groups for air conditioning are shifting, with post-00s and post-90s families becoming the primary buyers, particularly in first-tier cities where comfort is a top priority [19] - The motivations for purchasing air conditioning are evolving from basic needs to a desire for higher quality, better experiences, and compatibility with home environments [21] Purchase Channels and Influences - JD.com has established itself as the leading information channel and ordering platform for air conditioning, with social media and short video platforms playing a significant role in consumer decision-making [24] - Performance and quality are the foundational concerns for consumers, with comprehensive experience becoming a key factor in purchase decisions [28] Product Features and Consumer Feedback - High satisfaction rates (over 99%) for features like "no-wind" and "quiet operation" indicate strong consumer preference for comfort and health functionalities in air conditioning products [56] - The integration of health features, such as air purification and self-cleaning technologies, enhances the overall value proposition of air conditioning units [55] Collaborative Innovations - JD.com collaborates with major brands like Gree, Haier, and TCL to promote air conditioning products that emphasize comfort and health, responding to the trend of upgrading consumer experiences [59][61][63][67][69]

Group 1 - The State Intellectual Property Office of China has granted a patent to Zhuhai Gree Electric Appliances Co., Ltd. and Zhuhai Lianyun Technology Co., Ltd. for a technology related to "data processing methods, devices, electronic equipment, and readable storage media" with the authorization announcement number CN119583646B, applied for on November 2024 [1] - Zhuhai Gree Electric Appliances Co., Ltd. was established in 1989 and is primarily engaged in the manufacturing of electrical machinery and equipment, with a registered capital of 6,015.73 million RMB. The company has invested in 99 enterprises and participated in 5,000 bidding projects, holding 5,000 trademark and patent information, along with 908 administrative licenses [1] - Zhuhai Lianyun Technology Co., Ltd. was founded in 2018 and focuses on software and information technology services, with a registered capital of 50 million RMB. The company has participated in 9 bidding projects and holds 4,416 patent information, along with 14 administrative licenses [1]

Group 1 - The State Intellectual Property Office of China has granted a patent to Zhuhai Gree Electric Appliances Co., Ltd. and Zhuhai Lianyun Technology Co., Ltd. for a method, device, electronic equipment, and storage medium related to equipment distribution network [1] - Zhuhai Gree Electric Appliances Co., Ltd. was established in 1989, located in Zhuhai, and primarily engages in the manufacturing of electrical machinery and equipment, with a registered capital of 6,015.73 million RMB [1] - The company has invested in 99 enterprises, participated in 5,000 bidding projects, and holds 5,000 trademark and patent records, along with 908 administrative licenses [1] Group 2 - Zhuhai Lianyun Technology Co., Ltd. was founded in 2018, also located in Zhuhai, focusing on software and information technology services, with a registered capital of 50 million RMB [1] - The company has participated in 9 bidding projects and holds 4,416 patent records, in addition to 14 administrative licenses [1]

国家知识产权局信息显示，珠海格力电器股份有限公司取得一项名为"一种振动式自动吹尘工作台"的专 利，授权公告号CN115007551B，申请日期为2022年6月。 声明：市场有风险，投资需谨慎。本文为AI基于第三方数据生成，仅供参考，不构成个人投资建议。 来源：市场资讯 天眼查资料显示，格力电器（郑州）有限公司，成立于2010年，位于郑州市，是一家以从事专用设备制 造业为主的企业。企业注册资本2000万人民币。通过天眼查大数据分析，格力电器（郑州）有限公司参 与招投标项目68次，专利信息419条，此外企业还拥有行政许可29个。 珠海格力电器股份有限公司，成立于1989年，位于珠海市，是一家以从事电气机械和器材制造业为主的 企业。企业注册资本601573.0878万人民币。通过天眼查大数据分析，珠海格力电器股份有限公司共对 外投资了99家企业，参与招投标项目5000次，财产线索方面有商标信息5000条，专利信息5000条，此外 企业还拥有行政许可908个。 ...