Core Viewpoint - The recent price war in the air conditioning market has led to a dispute between Gree and Xiaomi, while benefiting competitors like Midea and Haier. Industry experts suggest that diversification and flexibility are key to maintaining growth in this competitive landscape [2][3][5]. Company Performance - Gree Electric's stock fell by 5.88% to 42.6 CNY per share following its half-year report, which indicated revenue of 97.325 billion CNY, a 2.46% year-on-year decline, and a net profit of 14.412 billion CNY, a 1.95% increase. However, the net profit for Q2 dropped by 10% year-on-year [3][4]. - Gree's air conditioning revenue, which constitutes nearly 80% of its total revenue, decreased by 5.09% to 76.279 billion CNY in the first half of the year, despite an overall increase in domestic household air conditioning sales [3][4]. - Xiaomi's air conditioning shipments exceeded 5.4 million units in Q2, reflecting a growth rate of over 60% [5][7]. Market Dynamics - The online air conditioning market saw Midea's market share increase by 4.9 percentage points to 22.63% in May, while Gree's share decreased by 1.53 percentage points to 17.08%, and Xiaomi's share rose by 2.83 percentage points to 18.02% [4][5]. - The average price of Gree air conditioners was 3,425 CNY in May, compared to Xiaomi's average of 2,418 CNY, highlighting the price competition in the market [4][5]. - The air conditioning industry is entering a new competitive phase, with companies needing flexible pricing and multi-brand strategies to adapt to consumer segmentation [8]. Strategic Initiatives - Gree is reducing supply prices for mid-range air conditioners by approximately 10% to enhance competitiveness and is also planning to expand its overseas sales operations [8]. - Midea and Haier are also increasing their market presence by lowering prices and launching new products under sub-brands to counter Xiaomi's market share gains [5][7]. - The air conditioning market is expected to see continued growth, with Midea reporting a 15.57% increase in revenue to 251.1 billion CNY and a 25.04% increase in net profit to 26.014 billion CNY in the first half of the year [7].