Investment Rating - The report maintains a "Recommended" rating for the smart home industry [5][30][7] Core Insights - The report highlights the positive impact of government policies aimed at boosting consumption, particularly in the home appliance sector, with a significant increase in retail sales [4][23] - Technological advancements in IoT, AI, and big data are expected to enhance the smart home industry's product offerings and consumer engagement [5][30] - The easing of trade tensions between the US and China is anticipated to benefit Chinese home appliance companies in international markets [5][30] Summary by Sections Market Review - In the past two weeks (June 28 - July 11, 2025), the Shanghai Composite Index rose by 2.51%, while the smart home index increased by only 1.25%, underperforming the broader market indices [12][16] - Year-to-date, the smart home index has gained 5.68%, outperforming the Shanghai Composite Index by 0.95 percentage points [12][15] - The top five performing stocks in the smart home index over the past two weeks include Industrial Fulian (+21.78%) and Jiangxin Home (+18.76%) [16][17] Industry Policy Tracking - Beijing's government has launched a comprehensive plan to boost consumption, aiming for a 5% annual growth in total market consumption by 2030 [18][19] - The plan includes 24 tasks focused on enhancing consumer experience and optimizing the consumption environment [19][20] Industry News Tracking - Retail sales of home appliances and audio-visual equipment grew by 30.2% in the first five months of 2025, reflecting the effectiveness of consumption-boosting policies [23][24] - Midea Group plans to invest 50 billion yuan in AI and robotics over the next three years, indicating a strong commitment to technological advancement [24][25] - The demand for air conditioning has surged in traditionally non-air-conditioned regions due to unprecedented high temperatures [26][27] Investment Recommendations - The report emphasizes the potential for growth in the smart home industry driven by government policies, technological advancements, and increasing consumer demand [5][30] - The smart home industry is expected to benefit across the supply chain, with a recommendation to maintain a "Recommended" rating [5][30][7]

Market Outlook - The company remains optimistic about the A-share market, considering it a very good buying point and the best investment opportunity in decades [1][11][12] - The prediction includes a potential interest rate cut by the Federal Reserve, which could lead to capital inflows into emerging markets, including A-shares [2][11] Investment Strategy - The company plans to focus on stable high-dividend sectors such as food and beverage, and public utilities, which have dividend yields around 4% [2] - The investment strategy emphasizes acquiring valuable assets with stable profitability and dividend rates [2] Tariff Implications - The introduction of reciprocal tariffs by the U.S. is seen as having a neutral impact on the A-share market, with potential long-term benefits for China's economy by addressing overcapacity [3] AI and Robotics - The company acknowledges the potential of AI and robotics but refrains from investing due to difficulties in identifying suitable companies within this sector [4] Buffett's Cash Holdings - The company interprets Warren Buffett's significant cash reserves and reduction in U.S. stock holdings as a risk management strategy, considering the long bull market since 2008 [7] Gold Investment - The company does not view gold as a valuable investment, citing its historical price fluctuations and the current trend of widespread investment in gold [8] Japanese Market Insights - The company is monitoring the Japanese market, noting the unique low-interest environment and the stability of major Japanese trading companies, which could provide investment opportunities [9][10] Long-term Market Confidence - The company believes that despite short-term volatility, the long-term outlook for the market is positive, with expectations of a recovery in leading companies' performance [11][12]