Investment Rating - The report maintains a positive outlook on the home appliance industry, particularly for the white goods sector, indicating a "Buy" recommendation for key players like Midea, Haier, and Gree [4][8]. Core Insights - The home appliance sector is benefiting from real estate policies and the "trade-in" program, leading to a sustained growth trend in domestic sales [6][14]. - The report highlights three main investment themes: white goods, export opportunities, and core components, with a focus on companies that are expected to outperform in these areas [8][17]. Summary by Sections 1. Domestic Sales Growth - From January to August 2025, the air conditioning industry produced 149.32 million units, a 6% year-on-year increase, with sales reaching 152.57 million units, up 7%, and domestic sales growing by 9% [6][14]. - The refrigerator and washing machine sectors also saw domestic sales growth of 4% and 6%, respectively, during the same period [6][14]. 2. White Goods and Components - The report notes that the average price of white goods is increasing due to the trade-in program, with air conditioning prices expected to rise further [27]. - Key companies are projected to show varied performance in Q3 2025, with Midea expected to see a 3% revenue increase and an 8% rise in profits, while Gree anticipates flat revenue and profit [28][29]. 3. Kitchen Appliances - The kitchen appliance sector is experiencing a recovery driven by real estate and trade-in policies, with significant growth in online sales for range hoods and gas stoves [6][14]. - Major players like Robam and Vatti are expected to see mixed results, with Robam projecting a 2% revenue increase but a 7% decline in profits [6][14]. 4. Small Appliances - The small appliance sector is benefiting from domestic trade-in policies, with companies like Supor and Joyoung expected to see revenue growth of 3% and a profit turnaround, respectively [6][14]. - The report highlights significant growth for companies like Stone Technology, which anticipates an 80% revenue increase [6][14]. 5. New Displays and Lighting - The emerging display sector is at a turning point, with companies like Hisense and Xiaomi expected to report revenue growth of 8% and 15%, respectively [6][14]. - The lighting industry is anticipated to see gradual improvements as market conditions stabilize [6][14]. 6. Investment Highlights - The report emphasizes the attractiveness of the white goods sector due to its low valuation, high dividends, and stable growth potential, recommending a combination of leading companies [8][17]. - Export opportunities are highlighted for companies like Ousheng Electric and Dechang, which are expected to benefit from increased orders and stable profitability [8][17]. 7. Trade-in Policy Impact - The trade-in policy has been expanded to include 12 categories of appliances, significantly boosting sales and consumer interest [17][18]. - The report notes that the trade-in program has already led to over 62 million units sold in 2024, generating nearly 270 billion yuan in consumption [17][18].

Investment Rating - The report maintains a "Positive" outlook on the home appliance industry for the mid-2025 performance forecast [3] Core Insights - The home appliance sector is expected to benefit from domestic sales policies and the "old-for-new" program, which is driving demand for major appliances and kitchen appliances [4][5] - The air conditioning industry saw a cumulative production of 101.54 million units from January to May 2025, representing an 8% year-on-year increase, while sales reached 103.49 million units, up 9% year-on-year [4][17] - The report identifies three main investment themes: 1. **White Goods**: The reversal of real estate policies and the "old-for-new" program are expected to catalyze growth in the white goods sector, which is characterized by low valuations, high dividends, and stable growth [5][6] 2. **Exports**: Companies like Ousheng Electric are recommended due to stable income growth driven by large customer orders, while Dechang shares are highlighted for their expanding automotive parts business [6] 3. **Core Components**: The report suggests that the demand for core components will exceed expectations due to the strong performance of white goods, recommending companies like Huaxiang and Shun'an Environment for their competitive advantages [6] Summary by Sections 1. Air Conditioning and Major Appliances - The air conditioning sector is experiencing high growth in exports, with a 11% year-on-year increase in external sales from January to May 2025 [4][17] - The "old-for-new" policy is expected to enhance the average price of white goods, with major companies like Midea and Gree projected to see revenue growth of 8% and 5% respectively in Q2 2025 [4][29] 2. Kitchen Appliances - The kitchen appliance market is recovering due to real estate policies and the "old-for-new" program, with online sales of range hoods and gas stoves increasing by 17.5% and 16.5% respectively [40] - Companies like Boss Appliances are maintaining strong market shares in the kitchen appliance sector, with expected revenue growth of 5% in Q2 2025 [41] 3. Small Appliances - The small appliance sector is benefiting from high growth in domestic sales and exports, with companies like Supor and Joyoung expected to see revenue increases of 5% and 120% respectively in Q2 2025 [4][41] - The "old-for-new" policy is set to include small appliances, which is anticipated to significantly boost sales [5][20] 4. New Displays and Lighting - The emerging display market is at a turning point, with companies like Hisense and Jimi Technology expected to see revenue growth of 5% in Q2 2025 [4][5] 5. Investment Highlights - The report emphasizes the potential for a rebound in the home appliance sector driven by favorable policies and market conditions, recommending a combination of leading companies such as Midea, Haier, and Gree for investment [5][6]