Core Viewpoint - Gree Electric Appliances emphasizes a long-term value strategy over participating in price wars, maintaining optimism for future growth despite a slight decline in revenue [1][2][7]. Financial Performance - In the first half of 2025, Gree reported revenue of approximately 973 billion yuan, a year-on-year decrease of 2.46%, while net profit attributable to shareholders was about 144 billion yuan, reflecting a year-on-year increase of 1.95% [1][2]. - The net profit margin and earnings per share have improved compared to the previous year [2]. Strategic Approach - Gree's strategy is encapsulated in three key terms: structure, efficiency, and discipline [4]. - **Structure**: Focus on healthy home appliances and high-quality supply, promoting categories like air conditioning, refrigeration, washing, and purification [4]. - **Efficiency**: Enhanced operational precision and tighter supply chain collaboration have positively supported profit formation [5]. - **Discipline**: Maintaining a value baseline in price wars, prioritizing profit and quality over short-term sales [6]. Market Positioning - Gree has consistently avoided impulsive participation in price wars, positioning itself as a long-term value player in the market [7]. - The company has undertaken three main initiatives: 1. Upholding product and service quality standards [8]. 2. Strengthening brand recognition and consumer memory [8]. 3. Ensuring operational quality with a focus on profit margins and customer satisfaction [8]. International Growth - Gree's overseas revenue reached 163.35 billion yuan in the first half of the year, marking a 10.19% increase year-on-year, with 70% of exports attributed to its own brand [10]. - The company aims to transition from selling capacity to selling brand value, enhancing its bargaining power and customer loyalty [10]. Second Growth Curve - Gree's second growth curve includes industrial products and green energy, with revenue of 95.91 billion yuan in this segment, reflecting a 17.13% year-on-year increase [11]. - The smart equipment segment also showed strong growth, with a revenue increase of 20.90% [11]. Channel Strategy - The "Dong Mingzhu Healthy Home" initiative focuses on upgrading channels from single product sales to solution-based offerings, with a principle of "same model, same price, same service" [12]. - The integration of online and offline channels is set to enhance long-term customer relationships [12]. Financial Quality and Shareholder Returns - The steady growth in profit and net profit margin indicates a solid foundation of operational quality and brand premium [13]. - Earnings per share increased to 2.60 yuan, reflecting the company's commitment to shareholder returns and long-term value [13]. Future Outlook - Gree plans to focus on structure, brand, channels, and international expansion while maintaining a cautious yet optimistic outlook for the future [14]. - The company believes that the quality of growth is more important than growth itself, aligning with its long-term vision [14].

Core Viewpoint - The ongoing debate between Gree and Xiaomi highlights the importance of fair comparisons in technology, with Gree's executive emphasizing that outdated products should not be compared to new innovations from competitors [1][7]. Group 1: Gree's Position - Gree's executive, Zhu Lei, criticized the comparison of Gree's 2021 products with Xiaomi's 2025 new models, arguing that such comparisons are unreasonable [1][7]. - Gree claims that Xiaomi currently only offers entry-level products in the central air conditioning sector, specifically mentioning their wind pipe machine [1][8]. - Gree's recent innovations, such as the internationally certified reversible distributed air conditioning system and constant temperature dehumidification system, have no direct counterparts in Xiaomi's lineup [1][8]. Group 2: Xiaomi's Response - Xiaomi's public relations manager, Wang Hua, suggested that the analysis and interpretations from netizens should be considered, indicating a level of engagement with public opinion [2]. - The emphasis on "core technology" in manufacturing suggests that poetic comparisons are insufficient for demonstrating technological advancements [9].

Core Viewpoint - The ongoing dispute between Gree Electric Appliances and Xiaomi regarding air conditioning sales and technology highlights the competitive tensions in the home appliance industry, particularly between the "Dong Mingzhu system" and the "Lei Jun system" as they vie for market share in 2025 [1]. Group 1: Company Responses - Gree's marketing director, Zhu Lei, criticized Xiaomi's comparisons of its new products with Gree's outdated models, calling such comparisons unreasonable [1]. - Zhu Lei emphasized that core technology in manufacturing cannot be developed through poetic expressions, responding to Xiaomi's public relations manager, Wang Hua, who used poetry to counter Gree's claims [1]. Group 2: Market Share Data - According to data from Aowei Cloud Network, as of July 2025, the online market shares for air conditioners were reported as follows: Midea 18.61%, Xiaomi 16.71%, and Gree 15.22% [1]. - In response, Gree presented alternative data showing Midea at 19.98%, Gree at 16.41%, and Xiaomi at 13.50%, accusing Xiaomi of spreading false information [1]. - The discrepancy in market share data is attributed to Aowei Cloud Network modifying its statistical methodology in August, resulting in two different sets of results for the same period [2].

Group 1 - Gree Electric Appliances' marketing director Zhu Lei emphasized that comparisons between Gree's older products and Xiaomi's new models are unreasonable, highlighting that Xiaomi currently only offers entry-level products in the central air conditioning sector [1] - Zhu Lei pointed out that Gree's advanced products, such as the internationally certified air conditioning systems, have no direct counterparts from Xiaomi, indicating a significant technological gap [1] - The ongoing debate about air conditioning sales between Xiaomi and Gree has escalated, with Xiaomi executives claiming online sales surpass Gree, while Gree maintains its market leadership based on different data interpretations [4] Group 2 - Xiaomi executives, including Wang Hua and Lu Weibing, have publicly acknowledged the sales competition, with Wang expressing surprise at the rapid changes in the market [4] - Gree's Zhu Lei responded to claims of Xiaomi's sales success by asserting that even Gree's older products remain technologically superior to Xiaomi's upcoming models, suggesting a generational gap in technology [4] - The controversy has led to discussions about data accuracy, with claims that the data metrics used by market research firms have been altered, affecting the sales comparisons [4]

Core Viewpoint - The discussion surrounding the comparison between Gree Electric Appliances and Xiaomi's air conditioning products is deemed unreasonable, as Gree's older models are being compared to Xiaomi's new entry-level products [1]. Group 1: Company Positioning - Gree Electric emphasizes that its technology is sound and should be transparently presented, avoiding indirect comparisons that mislead consumers [1]. - The company highlights that Xiaomi currently only offers entry-level ducted air conditioning units, while Gree has advanced products that have received international certifications [1]. - Gree asserts that it is unnecessary to compare its high-end central air conditioning systems with Xiaomi's basic offerings, reinforcing its market leadership [1]. Group 2: Industry Context - The manufacturing industry values tangible results and core technology, suggesting that superficial marketing tactics, such as poetry, do not equate to genuine technological advancement [1].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Views of the Report - The U.S. Treasury yield curve rebounded across the board due to the better - than - expected non - farm payroll data, and the Fedwatch shows that the pricing for interest rate cuts this year is less than two times. The U.S. internal game uncertainty has increased, and the U.S. Treasury yield may still fluctuate at a high level [1][41][42] - In the domestic market, the Shanghai Composite Index has closed up for four consecutive trading days, challenging 3400 points. Core technology sectors have performed well, and micro - cap stocks have continued the valuation repair trend. Next week, the overall opportunities may outweigh the risks [1][42] - In terms of convertible bond styles, equal - weighted leads weighted, small - cap leads large - cap, high - price leads low - price, and AAA - rated bonds perform weakly while medium - and low - rated bonds perform strongly [1][42] Group 3: Summary According to the Directory 1. Week - to - Week Market Review 1.1. The equity market rose overall, and most industries closed up - From June 2nd to June 6th, the equity market rose overall. The average daily trading volume of the two markets increased by about 1011.75 billion yuan to 11856.64 billion yuan, with a weekly on - week increase of 9.33% [9] - Among the 31 Shenwan primary industries, 23 industries closed up. Communication, non - ferrous metals, electronics, computers, and basic chemicals led the gains, while household appliances, food and beverages, transportation, coal, and steel led the losses [15] 1.2. The convertible bond market rose overall, and most industries closed up - From June 2nd to June 6th, the CSI Convertible Bond Index rose 1.08%. Among the 29 Shenwan primary industries, 28 industries closed up, with 7 industries having a gain of over 2%. Media, communication, computers, household appliances, and beauty care led the gains, while building materials led the losses [18] - The average daily trading volume of the convertible bond market was 515.51 billion yuan, a decrease of 39.67 billion yuan, with a on - week change of - 7.15%. The top ten convertible bonds in terms of trading volume had an average trading volume of 104.79 billion yuan, and the first - ranked one had a trading volume of 233.31 billion yuan [18] - Approximately 90.53% of convertible bond issues rose, about 37.68% had a gain in the 0 - 1% range, and 22.95% had a gain of over 2% [18] 1.3. Comparison of stock and bond market sentiments - From June 2nd to June 6th, the weekly weighted average and median of the convertible bond and underlying stock markets were positive, and the underlying stocks had a larger weekly gain. The trading volume of both the convertible bond and underlying stock markets decreased significantly, and the underlying stock market had a larger decline in trading volume and a lower quantile level [36] - Approximately 89.71% of convertible bonds and 77.70% of underlying stocks closed up. About 40.36% of convertible bonds had a larger gain or loss than underlying stocks. Overall, the trading sentiment in the underlying stock market was better this week [36] 2. Outlook and Investment Strategies - The U.S. Treasury yield may still fluctuate at a high level due to the increase in internal game uncertainty in the U.S [1][41][42] - In the domestic market, next week's opportunities may outweigh risks. It is recommended to allocate core technology themes that have corrected significantly and focus on medium - and low - priced targets with low business uncertainty, sufficient cash, and a positive attitude towards equity investment and mergers and acquisitions [1][42] - The top ten high - rated, medium - and low - priced convertible bonds with the greatest potential for par premium rate repair next week are Qilu Convertible Bond, Chuanheng Convertible Bond, Youfa Convertible Bond, Wankai Convertible Bond, Dayu Convertible Bond, Qizheng Convertible Bond, Baidian Convertible Bond, Guangda Convertible Bond, Wantian Convertible Bond, and Jinlun Convertible Bond [1]

Core Insights - Lei Jun has faced significant challenges recently, including a traffic accident involving the Xiaomi SU7 and criticism from car owners regarding false advertising, leading to a strategic product-focused presentation at Xiaomi's 15th anniversary event [1][6] - Xiaomi has achieved notable milestones, including maintaining a top-three global market share in smartphones for 19 consecutive quarters and successfully launching its automotive and chip initiatives, with a commitment to invest 200 billion yuan in core technology over the next five years [2][5] - The launch of the 3nm SoC chip, Xuanjie O1, and the luxury SUV, YU7, were key highlights of the event, with the YU7 boasting impressive specifications such as a maximum range of 835 km and rapid charging capabilities [3][5] Investment and Technology Strategy - Xiaomi plans to invest 1,020 million yuan in core technology research and development over the next five years, with an additional 300 million yuan expected this year [2][5] - The Xuanjie O1 chip, utilizing second-generation 3nm technology, features 19 billion transistors and aims to compete with leading flagship processors, although Lei Jun cautioned against expecting immediate dominance over competitors like Apple [5][10] Recent Challenges and Public Perception - Lei Jun described the past month as one of the most difficult periods since founding Xiaomi, marked by a serious public relations crisis following the SU7 accident and subsequent issues with the vehicle's performance updates and marketing claims [6][9] - The backlash from customers regarding the carbon fiber hood of the SU7 Ultra and the performance limitations imposed by software updates has led to a decline in sales and increased scrutiny on Xiaomi's marketing practices [6][9] Market and Competitive Landscape - The public response to Xiaomi's technological advancements has been mixed, with state media praising the company's efforts in core technology while some consumers remain skeptical about the true innovation behind the Xuanjie O1 chip [10][13] - Comparisons have been drawn between Xiaomi's chip development and Huawei's advancements in operating systems, highlighting the differing approaches to technology innovation and market positioning [13][14] Conclusion - Xiaomi's recent product launches and strategic investments in technology reflect a commitment to innovation, but the company must navigate the challenges of public perception and competitive pressures to sustain its growth trajectory [2][10][14]