Group 1 - The current domestic policy environment is in a vacuum, affecting terminal retail growth due to last year's high base from trade-in programs, but the company remains optimistic about dividend assets represented by leading white goods manufacturers [1] - In terms of external sales, driven by better-than-expected US real estate data, there is potential for stable demand in the US consumer market, with expectations for further interest rate cuts, which may sustain the heat in export chain transactions, particularly in representative export sectors like black and white goods [1] - Domestic sales showed good growth in the first half of the year due to national subsidies, but growth is gradually under pressure due to high base effects since October 2025; overall external sales performance remains strong despite disruptions from US tariffs, with emerging markets performing relatively well [1] Group 2 - Emerging markets are experiencing rapid growth and have significant potential, with the company projecting that external sales in the first half of 2026 will likely outperform domestic sales; opportunities in external markets can be analyzed from both market and product dimensions [2] - The product structure is continuously upgrading, with an increasing proportion of high-end products contributing to profit levels; the launch of new Mini LED products is expected to enhance market share and improve gross margins due to higher average selling prices [3] - The company is actively exploring new categories, with consumer demand shifting from basic functionality to new lifestyle satisfaction; innovations in niche products such as smart glasses, action cameras, drones, and UV printers are anticipated to rapidly release demand and create new growth drivers for home appliance companies [4]

Core Insights - The report maintains a positive outlook on the home appliance sector, emphasizing the potential for growth in both domestic and international markets, particularly in emerging markets and through the development of new product categories [3][5]. Group 1: Market Performance Overview - The home appliance sector has shown varied performance in 2025, with white goods yielding a total return of +1% but underperforming against the CSI 300 by -19% due to high base effects and market competition [11]. - Small appliances have performed well with a +12% return, indicating a shift from scale expansion to value creation, supported by new subsidy policies [11]. - The components sector has excelled with a +70% return, benefiting from investments in emerging technologies such as AI and robotics [11]. Group 2: Domestic and International Sales - Domestic sales have faced pressure due to tightening national subsidies, with expected growth rates for major appliances showing mixed results, while small appliances have fared better [5][38]. - Internationally, emerging markets have outperformed, with a notable recovery in export orders as tariff impacts begin to stabilize [41][42]. Group 3: Product Development and Innovation - The report highlights a continuous upgrade in product structure, with an increasing share of high-end products contributing to profit margins [5][44]. - New product categories such as smart glasses, drones, and UV printers are expected to create new growth opportunities, driven by consumer demand for innovative and personalized experiences [5][10]. Group 4: Investment Recommendations - The report suggests focusing on leading white goods companies as they represent assets with significant growth potential, particularly in the context of favorable U.S. market conditions and anticipated interest rate cuts [5][44]. - Specific companies recommended for investment include Haier Smart Home, Hisense, TCL Electronics, and Ecovacs, among others [5][44].