Investment Rating - The report maintains a positive outlook on the home appliance sector, highlighting its undervalued status, high dividends, and stable growth potential [7]. Core Insights - The home appliance sector has shown resilience, with the air conditioning and kitchen appliance segments experiencing significant sales growth. The report emphasizes the potential for a recovery in domestic demand driven by favorable policies and market conditions [4][5][7]. - The report identifies three main investment themes: white goods, export opportunities, and core components, recommending specific companies within these categories for investment [7]. Data Observations - Air Conditioning: In May 2025, online sales reached 4.59 million units, up 47.1% year-on-year, while offline sales were 818,000 units, up 37.5%. The online average price decreased by 0.7% to 2,606 RMB/unit, while the offline average price increased by 0.7% to 4,236 RMB/unit [4][32]. - Kitchen Appliances: In May 2025, online sales of range hoods reached 481,000 units, up 17.3%, and offline sales were 127,000 units, up 53.0%. The online average price increased by 2.5% to 1,739 RMB/unit, and the offline average price rose by 6.5% to 4,560 RMB/unit [5][33]. - Dishwashers also saw growth, with online sales of 163,000 units, up 18.6%, and offline sales of 28,000 units, up 43.9%. The online average price increased by 1.2% to 4,425 RMB/unit, while the offline average price rose by 5.0% to 8,436 RMB/unit [5][37]. Industry Dynamics - The home appliance sector outperformed the Shanghai and Shenzhen 300 Index, with the sector index declining by 0.2% compared to a 0.5% decline in the broader index [6][8]. - Production data for July 2025 indicates a total of 29.6 million units for air conditioners, refrigerators, and washing machines, a decrease of 2.6% compared to the previous year [13]. - The report notes that the prices of copper and aluminum have increased year-on-year, while stainless steel prices have remained stable [16].

Investment Rating - The report maintains a positive outlook on the home appliance sector, highlighting potential investment opportunities in key companies [2]. Core Insights - The home appliance sector underperformed compared to the CSI 300 index, with the Shenwan household appliance index declining by 1.8% while the CSI 300 rose by 0.9% [2][3]. - Haier Smart Home completed the acquisition of KLIMA KFT, enhancing its HVAC business in Central and Eastern Europe [8]. - Stone Technology plans to issue H shares and list on the Hong Kong Stock Exchange to boost its global brand recognition and competitiveness [9]. Summary by Sections 1. Market Performance - The household appliance sector lagged behind the CSI 300 index, with a decline of 1.8% compared to a 0.9% increase in the index [2][3]. 2. Company Dynamics - Key companies such as Beileisong (up 21.2%), Yitian Smart (up 13.0%), and Aopu Technology (up 6.6%) led the gains, while Midea Group (down 4.2%), Hisense Visual (down 4.0%), and Gree Electric (down 3.3%) faced declines [5][6]. 3. Industry Developments - Haier Smart Home's acquisition of KLIMA KFT marks a significant step in expanding its HVAC business in Hungary, aiming to promote sustainable HVAC solutions in the region [8]. - Stone Technology's proposed H share issuance aims to enhance its global competitiveness and optimize its capital structure [9]. 4. Sales Data Observations - In April, sales of cleaning appliances like robotic vacuums and washing machines increased, while hairdryer sales declined [27]. - Robotic vacuum sales reached 270,700 units, up 79.69% year-on-year, with sales revenue of 315 million yuan, an increase of 55.46% [27]. - Hairdryer sales fell by 10.81% to 850,900 units, but revenue increased by 12.39% to 227 million yuan [33]. 5. Investment Highlights - Three main investment themes are identified: - White goods, benefiting from favorable real estate policies and the "trade-in" policy, with expected production increases [2]. - Exports, with recommendations for companies like Ousheng Electric and Dechang Co. due to stable profitability and order growth [2]. - Core components, with a focus on companies like Huaxiang Co. and Shun'an Environment, which are positioned to benefit from increased demand in the white goods sector [2].