Investment Rating - The report maintains a "Positive" investment rating for the home appliance industry, indicating an expectation of returns exceeding the market benchmark by more than 5% [5]. Core Insights - Domestic home appliance sales are expected to benefit from policy support, with the air conditioning peak season anticipated to see high temperatures and low inventory, making the second quarter demand promising. Changes in national subsidy methods are expected to have limited disruption [3][8]. - The online retail performance in May was strong, with significant year-on-year growth in various categories, including a 31.7% increase in TV sales and a 46.0% increase in air conditioning sales [8]. - The report highlights the potential for emerging markets in exports, while concerns regarding exports to the U.S. due to global capacity layout are deemed manageable. The reshaping of the global supply chain presents new opportunities [3][8]. Summary by Sections Domestic Market Performance - In May, online retail sales for home appliances showed impressive growth, with air conditioning sales up 46.0% year-on-year and cumulative growth of 26.9% from January to May [8]. - The average price of air conditioning units decreased slightly by 0.7% in May, but the report predicts that price declines are nearing an end as the peak season approaches [8]. Policy and Subsidy Impact - The report discusses changes in national subsidy methods, suggesting that the new approach will likely alleviate price competition among mid-to-low-end brands. The expected shift to a dual-channel distribution for subsidies is anticipated to maintain consumer spending [8]. Investment Recommendations - The report recommends focusing on quality white goods leaders that benefit from domestic policy continuation and are actively expanding overseas, such as Midea Group and Haier Smart Home [3]. - It also suggests monitoring companies that are likely to benefit from the reshaping of market shares in mature overseas markets, such as Hisense Visual Technology and Ousheng Electric [3].