Group 1: White Goods Sector - Investment in the white goods sector primarily focuses on the stability of company performance, with a steady increase in dividend rates and valuation uplift due to declining risk-free interest rates [1] - The black goods sector presents investment opportunities mainly due to performance elasticity against the backdrop of enhanced global competitiveness [1] - Investment opportunities in clean appliances arise from the deep integration of the industry since Q3 2023, leading to opportunities for leading companies [1] - The penetration of AI and embodied robotics technology is expected to introduce attractive new smart products for certain companies [1] Group 2: U.S. Federal Reserve and Interest Rates - The U.S. Federal Reserve is expected to potentially restart interest rate cuts in October, following a cautious stance in the June meeting where inflation and unemployment rate forecasts were raised while growth expectations were lowered [2] - The main obstacles to rate cuts are uncertainties surrounding tariffs and inflation, particularly how tariffs will impact inflation over time and magnitude [2] - Evidence of tariff impacts on inflation is anticipated in the inflation reports from June to August, which could influence the Fed's decision to cut rates in October if core goods do not significantly transmit inflation to services [2] Group 3: Medical Aesthetics Industry - The medical aesthetics industry in China has significant market potential, driven by increased awareness and an aging customer base, with injection-related products expected to grow faster than the overall industry due to supply-side drivers [3] - Product evolution and iteration create development opportunities, with new certificate scarcity building product dividends and a potential U-shaped market evolution as long-term approvals increase [3] - Competitive factors are shifting from products to a comprehensive capability in marketing, market presence, and management, with leading companies likely to maintain their advantage through operational excellence [3] - Two investment themes are proposed: focusing on product iteration and breakthroughs, and emphasizing the comprehensive capabilities of leading medical aesthetics companies [3]

Investment Rating - The report recommends investment in the home appliance sector, particularly in companies with stable performance and increasing dividend rates [8]. Core Viewpoints - The home appliance industry is expected to benefit from long-term stability due to its essential nature and competitive advantages globally, despite facing short-term pressures from market competition and external factors like tariffs [7][8]. - The report highlights the importance of government subsidy policies, particularly the "old-for-new" program, which is anticipated to continue supporting consumer demand in 2024 and 2025 [7][8]. - The report identifies key investment opportunities in the white goods sector, emphasizing the significance of companies' performance stability and dividend yield in the current low-risk interest rate environment [7][8]. Summary by Sections 1. Industry Performance Review - The home appliance sector has outperformed the market since 2023, with the SW home appliance index showing increases of 3.8% in 2023, 25.4% in 2024, and 1.93% in 2025 YTD [7][12]. - The sector's performance is attributed to the essential nature of large appliances and the benefits from government subsidy policies [7][12]. 2. Domestic Sales Supported by Policies - The "old-for-new" policy has effectively stimulated the market, with retail sales expected to grow significantly due to government support [42][44]. - The retail market for home appliances is projected to reach CNY 1,030.7 billion in 2024, a year-on-year increase of 12.3% [42]. 3. Overseas Market Dynamics - The report notes a shift in the global supply chain, with Chinese home appliance companies expected to benefit from increased order concentration in the U.S. market by 2026 [7][8]. - Exports of home appliances are projected to grow by 3.8% in 2023 and 14.1% in 2024, with significant increases in air conditioning exports [7][8]. 4. White Goods Market Insights - The air conditioning market is expected to remain strong in 2024, driven by government subsidies, although competition in the online market is intensifying [7][8]. - The report emphasizes the importance of product upgrades in the refrigerator and washing machine segments, which are expected to maintain stable sales due to their essential nature [7][8]. 5. Investment Recommendations - The report recommends investing in leading companies such as Midea Group, Haier Smart Home, Hisense Visual, and Gree Electric, focusing on their stable earnings and high dividend yields [8]. - The black goods sector presents opportunities due to improved global competitiveness, while the cleaning appliance segment is highlighted for its growth potential following industry consolidation [7][8].