Core Viewpoints - The home appliance sector is expected to show steady growth in domestic sales despite the diminishing effects of national subsidies, with a return to stable growth anticipated in the second half of 2025 [3][25] - The valuation of the home appliance industry remains at a low level, with the industry index PE (TTM) at 14.45X, placing it at the 39.0 percentile since 2020 [13] - The report maintains an "outperform" rating for the home appliance sector, highlighting the resilience of major appliances and the recovery of small appliances [1][3] Summary by Sections 1. Overall Market Performance - In the first half of 2025, the home appliance sector slightly underperformed the market, with the sector index down 1.2% compared to the Shanghai and Shenzhen 300 index, which remained stable [10] - The home appliance sector's valuation is at a five-year low, with significant growth in home appliance components, which saw a rise of over 17% [10][11] 2. White Goods - Domestic sales of white goods benefited from national subsidy policies, showing strong resilience, with a projected steady growth in the second half of 2025 despite a slowdown in growth rates [4][19] - Major brands like Midea, Haier, Gree, and Hisense are recommended for investment due to their strong market positions and global production capabilities [4][17] 3. Black Goods - The black goods segment, particularly televisions, is experiencing stable demand with a shift towards Mini LED technology and decreasing panel prices, which are expected to enhance profitability for leading companies [40][44] - The domestic retail volume of televisions increased by 1.8% in the first half of 2025, with retail revenue growing by 7.5% [44] 4. Kitchen Appliances - The kitchen appliance sector is seeing a recovery in demand, particularly for traditional cooking appliances, driven by national subsidies, with retail sales of range hoods and gas stoves showing significant growth [53][54] - The overall demand for kitchen appliances is expected to stabilize as the effects of national subsidies wane, with a focus on the recovery of the real estate market to support future growth [55][57] 5. Small Appliances - The small appliance market, particularly kitchen appliances, is witnessing a notable recovery, with retail sales reaching 31.9 billion yuan, a year-on-year increase of 9.3% [65] - The demand for new cleaning products, such as robotic vacuum cleaners, has surged, with sales increasing by over 40% due to national subsidies [68][66] 6. Technology Integration - Leading home appliance companies are focusing on their strengths and expanding into emerging application areas, such as smart home technology and AI products, which are expected to drive long-term growth [4][28]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Viewpoints - The report emphasizes that Haier Smart Home is leveraging AI technology to enhance its strategic, product, and ecological frameworks, leading the industry towards a smart home future [2][3][10]. Strategic Aspects - AI is aiding the company in deepening digital transformation and improving operational efficiency, with a shift to online marketing, AI-driven service matching, and smart logistics reducing costs [11][13]. - The company has upgraded its R&D, manufacturing, and order systems using AI, resulting in a 20% reduction in R&D cycles, a 30% increase in production efficiency, and a 13% improvement in order response times [11][15][16]. Product Development - Haier is transitioning from "assisting with chores" to a vision of "unmanned chores," introducing the "AI Eye" series of appliances that autonomously manage cooking and laundry tasks [17][20]. - The "AI Eye" technology enables appliances to recognize and respond to user needs, enhancing user experience and operational efficiency [20][21]. Ecological Development - The "Smart Home Brain" has been upgraded to incorporate AI perception, voice, and visual capabilities, aiming to create a more intuitive home environment [36][38]. - The company is expanding its smart home solutions through its "Three Wings Bird" brand, which covers smart appliances, customized home solutions, and comprehensive home control [31][35]. Investment Recommendations - The report suggests that Haier Smart Home is well-positioned to capitalize on AI-driven opportunities, with projected net profits of 21.44 billion, 24.29 billion, and 26.76 billion yuan for 2025-2027, corresponding to P/E ratios of 11.5, 10.1, and 9.2 times [43].