Investment Rating - The report assigns an "Overweight" rating for the home appliance industry, maintaining the previous rating of "Overweight" [1]. Core Insights - The tightening regulation on e-commerce platform competition is expected to significantly improve the cost structure for small home appliance companies, thereby enhancing their profitability [2]. Summary by Sections 1. Profit Pressure from Platform Fees - The home appliance industry has faced profit pressure due to high platform traffic fees, leading to a survival crisis for small appliance brands. The core factor affecting profit margins is the sales expense ratio. The demand for durable consumer goods like home appliances has not yet recovered to high growth levels due to a slow recovery in consumer demand and ongoing impacts from previous real estate pressures. The rise of new channels, particularly Douyin, has reduced the market share of traditional platforms like Tmall and JD, leading to increased competition among platforms and a fragmented distribution channel [5][7]. 2. Regulatory Improvements for Brand Survival - The regulatory scrutiny on e-commerce platform practices has intensified, particularly since the second half of 2024. The State Administration for Market Regulation has addressed issues such as unfair refund policies that squeeze merchant survival space and promote low-quality competition. In 2024, the agency conducted a special rectification campaign, uncovering 3,042 cases of illegal charges against businesses, resulting in the return of 1.36 billion yuan to affected companies. The regulatory environment is expected to improve the survival conditions for brands operating on these platforms [10][12]. 3. Optimizing E-commerce Platform Rules - E-commerce platforms are gradually implementing favorable policies for merchants, which is anticipated to improve profit margins for brands in 2025. For instance, the Douyin platform introduced a refund and fee subsidy policy in February 2025, allowing merchants to receive automatic refunds for promotional fees in cases of full refunds to consumers. This shift towards more transparent and fair rules aims to reduce the burden on small merchants and enhance their operational efficiency [14][16]. 4. Investment Recommendations - After four years of intense competition, the report suggests that the tightening of e-commerce platform regulations is likely to improve the cost structure for small appliance companies, thus enhancing their profitability. Recommended stocks include Feike Electric, Derma, Bear Electric, Xinbao, Supor, Beiding, Ecovacs, and Roborock [17][18].