23 September 2025 Equity Research Report Anker Innovations (300866 CH) Equities Buy: Manageable impacts from potential tariff probe US House urges Anker probe over tariffs: The House China committee has called on the US Department of Commerce to investigate Anker for alleged unfair pricing and illegal tariff evasion (Bloomberg, 22 September 2025), with Anker's share price down 8% on the day. The proposed probe alleges that: (1) Anker received subsidies from the Chinese government, allowing the company to ga ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Consumer Appliances Sector - **Current Sentiment**: Investors are cautious about the white goods sector, anticipating a downcycle due to recent policy changes and high retail sales bases [2][3] Core Insights - **Investor Sentiment**: - Interest in high-growth niche categories like robot vacuum cleaners, action cameras, and camera drones [2] - Mixed feedback on Roborock, with some investors optimistic about its operational performance management (OPM) recovery [4] - Concerns about the white goods sector's performance, with expectations of declining retail sales starting September 2025 [3] - **Company-Specific Insights**: - **Midea**: Seen as a potential buy on dips due to attractive shareholder returns projected at low-to-mid-teens percentage in 2026, alongside a strong execution track record [3] - **Gree**: Expected to face significant share losses in the air conditioning market due to pricing competition, despite a 7% dividend yield providing some support [3] - **Roborock**: Positive outlook due to strategic downsizing of loss-making products and easing competition, although skepticism remains about OPM improvement in Q3 2025 [4] - **Arashi (Insta360)**: Gaining investor interest for its growth potential in the We-Media Era, particularly with its camera drone product [4] Investment Recommendations - **Top Picks**: - **Roborock** and **Arashi** are favored for their growth potential in the robotic vacuum cleaner and action camera segments, respectively [5] - **Midea** and **Haier** are preferred for their overseas growth potential and resilience against new entrants [5] - **Gree** is rated as a sell due to its domestic focus and competitive pressures [5] Risks Identified - **Home Appliances Sector**: Risks include a downturn in the property market affecting demand, high raw material prices, and global supply chain constraints [7] - **Robotic Vacuum Cleaner Sector**: Risks involve intensifying competition, raw material price increases, and foreign exchange losses [8] - **Small Appliances Sector**: Risks include economic downturns leading to weak consumption and price competition [8] Additional Insights - **Market Dynamics**: The competitive landscape is expected to intensify, particularly with Midea's focus on market share over profitability and the entry of new competitors [5] - **Investor Caution**: Overall, there is a cautious outlook on the appliance sector, with expectations of a post-subsidy downcycle from Q3 2025 to 2027 [5]