Industry Overview - The U.S. HVAC market is experiencing strong multi-year growth driven by rising energy efficiency demands, smart technology adoption, construction booms, and government funding initiatives [1] - The Federal Reserve's consecutive rate cuts from September to December 2025 have further catalyzed favorable market trends, boosting project initiations [2] Company Analysis: Comfort Systems USA (FIX) - Comfort Systems is benefiting from robust demand trends in the Technology sector, with this sector contributing 42% of total revenues in 2025, up from 32% a year ago [5] - As of September 30, 2025, Comfort Systems reported a record backlog of $9.38 billion, reflecting year-over-year increases of 65.1% [6] - The company is focused on large-scale projects and has made recent acquisitions to enhance its market presence, expected to deliver over $200 million in incremental annual revenues [8] - Comfort Systems continues to post record margins and cash flow, driven by disciplined project selection and productivity gains [7] Company Analysis: Carrier Global Corporation (CARR) - Carrier is experiencing strong performance in the Commercial HVAC segment, particularly in the Americas, with a growing backlog supported by capacity investments [9] - The company is on track to double its annual data center revenues to around $1 billion, with backlog visibility extending into 2027-2028 [10] - Despite strengths in commercial systems, Carrier faces challenges in the North American residential HVAC market, leading to production adjustments and restructuring actions [13] - Internationally, Carrier benefits from strong demand driven by electrification and decarbonization policies, particularly in Europe and Asia [12] Stock Performance & Valuation - Comfort Systems has outperformed Carrier in share price performance over the past six months and has consistently traded above Carrier on a forward P/E ratio basis [14][15] - The Zacks Consensus Estimate indicates an 80.2% year-over-year growth in FIX's 2025 EPS, while CARR's 2025 EPS is expected to improve by only 3.1% [19][20] Conclusion - The U.S. HVAC market is positioned for sustained growth, with Comfort Systems showing strong execution and visibility, particularly in technology-driven projects [24][25] - FIX stock is better positioned for incremental growth and earnings upside, while CARR stock reflects a more balanced risk-reward profile due to its current challenges [26]

Financial Data and Key Metrics Changes - Total sales volume reached 350,000 units, representing a 37% year-over-year increase [7] - Revenue reached RMB 1,260 million, a year-over-year growth of 3534% [8] - Gross margin stood at 20.1%, up 3.1 percentage points year-over-year [8][38] - Net profit was RMB 5.9 million, compared to a net loss of RMB 25 million for the same period last year [40] Business Line Data and Key Metrics Changes - In the China market, sales volume surged by 54% to 318,000 units, with revenue growth from scooters at 45% year-over-year [8][10] - Overseas market sales volume declined by 35% to 31,000 units, primarily due to US tariffs and competition in Europe [8][24] - ASP in China increased by 11% compared to Q1, returning close to 2024 annual levels [11] Market Data and Key Metrics Changes - The US market saw a 17% decline in sales, while the Asian market delivered a 21% year-over-year increase [27][28] - The European market faced significant headwinds due to intensified price competition [28] Company Strategy and Development Direction - The company is focusing on product portfolio optimization and cost reduction through product platformization [9] - New product lines are being developed to comply with upcoming regulations for electric bicycles [14][15] - The company plans to expand its retail footprint, adding over 1,000 stores in 2025 [30][62] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about performance in both China and overseas markets in the second half of the year [29] - Anticipation of a demand surge in Q4 due to new regulations affecting electric bicycles [30] - The company expects to maintain a healthy gross margin and stable ASP throughout the second half of the year [31] Other Important Information - The company achieved significant sales during promotional events, including RMB 1,060 million in GMV during the six eighteen shopping campaign [20] - The company has expanded its online presence significantly, contributing to 77% of total sales volume [23] Q&A Session Summary Question: Reasons for the increase in unit price and gross profit margin in Q2 - The increase in ASP was due to product mix improvement, particularly with the introduction of upgraded models [45][46] Question: Outlook for sales volume next year for domestic electric two-wheeled vehicles - Management is cautious but preparing for potential demand shifts due to regulatory changes [50][52] Question: Expectations for the overseas market recovery - Management confirmed a positive outlook for growth in the overseas market, particularly in electric two-wheelers [58][60] Question: Plans for expanding the dealer network in China - The company plans to continue expanding its dealer network, targeting around 4,700 stores by the end of the year [62][63] Question: Will revenue growth outpace volume growth in the next quarter? - Management indicated that revenue growth is expected to be in line with volume growth, but ASP may be lower due to seasonal trends [71][72]