Changjiang Securities·2025-06-03 02:32Investment Rating - The report maintains a "Buy" rating for key companies in the home appliance industry, including Midea Group, Gree Electric, Haier Smart Home, Hisense Home Appliances, Hisense Visual, Anker Innovations [11]. Core Insights - The report analyzes the recent decline in air conditioning prices in the domestic market, addressing concerns about the competitive landscape and profitability within the air conditioning industry [3][21]. - The decline in air conditioning prices is attributed to a combination of rational consumer behavior and proactive pricing strategies adopted by manufacturers in response to a cautious consumption environment [6][49]. Summary by Sections Factors Leading to Price Fluctuations - The slowdown in domestic economic growth has led to a decline in consumer income expectations, resulting in a more cautious consumption attitude among residents [6][22]. - The air conditioning market has seen a significant increase in the sales proportion of mid-to-low-priced products, with sales of air conditioners priced below 1,500 yuan rising to 6.2% in the first four months of 2025 [26][29]. Current Competitive Landscape - The overall air conditioning market has not formed a trend of price competition, with online average prices showing a limited decline of 3.0% year-on-year in the first four months of 2025, while offline prices have increased by 1.5% [52][54]. - Major brands have adopted aggressive pricing strategies, with some brands like Xiaomi achieving a price increase of 24.4% due to expanding into higher price segments [66][72]. Impact on Profitability - Historical analysis of the 2019-2020 price war indicates that while gross margins were affected, operational profit margins remained relatively stable due to cost-cutting measures [8][72]. - The current price adjustments are seen as strategic moves by manufacturers to stimulate demand rather than a reaction to a significant drop in consumer demand [72][49]. Investment Recommendations - The report suggests focusing on companies with low exposure to the U.S. market and benefiting from domestic sales trends, such as Gree Electric, Hisense Home Appliances, and Midea Group [9]. - Companies like Aima Technology and Yadea Holdings are recommended for their strong growth potential driven by domestic demand and government incentives [9].