Summary of the Home Appliance Industry Conference Call Industry Overview - The home appliance industry is experiencing a weak performance in the first half of 2025, ranking around 17th among Shenwan's primary sectors, primarily due to export uncertainties and the impact of the old-for-new policy, as well as high retail baselines from the previous year's fourth quarter [1][3][19]. Key Points and Arguments Performance by Sub-Sectors - White Goods: Weak performance with a return of approximately -3% as of June 5, 2025 [5]. - Black Goods: Strong performance noted, with significant improvement in profitability despite no substantial growth in sales volume [4][14]. - Small Appliances: Notable improvement in domestic sales revenue and profitability, particularly for TCL Electronics and Hisense [1][5]. - Kitchen Appliances and Lighting: Remained stable, with no significant changes reported [1]. Export and Market Dynamics - Home appliance exports saw a decline of about 8% in May 2025, with the U.S. market share dropping from 19% in 2024 to 8% in 2025 [4][13]. - Chinese home appliance companies are accelerating their expansion into emerging markets, which is expected to maintain single-digit growth in exports in the medium to long term [13]. Investment Strategies - The overall investment strategy for the home appliance industry in the second half of 2025 is focused on stability, despite the sector's weak performance [2]. - Public fund holdings in the home appliance sector decreased to 4.89% by the end of Q1 2025, with significant reductions in white goods holdings due to intense competition [6]. Future Outlook - The air conditioning sector is expected to rebound due to the old-for-new policy, despite some regions experiencing a temporary halt in subsidies [10]. - The domestic market is anticipated to gradually strengthen, influenced by last year's economic pressures and inventory clearance [8][10]. Subsidy Policies - The subsidy amount for the second half of 2025 is projected to be 138 billion, similar to the first half, but concerns exist regarding the impact of potential subsidy reductions [11]. - Historical data indicates that previous subsidy cycles led to significant increases in appliance shipments, but declines followed after subsidy reductions [12]. Competitive Landscape - TCL and Hisense have shown improved operational conditions since Q4 2024, with expectations of significant performance improvements in Q2 2025 [15]. - The small appliance sector, particularly vacuum cleaners, has seen strong competition, with companies like Roborock achieving substantial growth in sales [16][17]. Additional Important Insights - The kitchen small appliance market has shown signs of recovery since Q4 2024, with companies like Bear and Supor expected to see significant growth [18]. - The overall investment recommendation emphasizes focusing on leading companies like Midea, Hisense, and Haier, which have strong cyclical resilience [19]. This summary encapsulates the key insights and data from the conference call, providing a comprehensive overview of the home appliance industry's current state and future outlook.