2025-07-02 15:49Summary of Key Points from the Conference Call Industry Overview - The home appliance sector is experiencing a notable performance, particularly in the white goods segment, despite a decline in government subsidies affecting valuations [2][11] - The central government announced a new subsidy plan of approximately 130 billion, boosting market confidence [2] Core Insights and Arguments - White Goods Performance: The white goods segment showed strong sales demand in Q2, with leading companies like Midea and Haier experiencing significant growth in installation cards [1][2] - Subsidy Impact: The reduction in government subsidies has had a limited impact on performance, primarily affecting sentiment rather than actual results [3][11] - Market Dynamics: The shift in market style has led to a transition of funds from small-cap to large-cap stocks, contributing to the recent performance of the home appliance sector [2] - Sales Trends: Sales of small appliances have improved since Q4 of the previous year, with notable revenue growth for leading companies like Bear and Supor during the 618 shopping festival [1][4] Segment Performance - Major Appliances: The white goods segment is expected to maintain strong competitiveness, with leading companies achieving double-digit profit growth in Q2 [5] - Black Goods: The upgrade in product structure, particularly in high-end Mini LED TVs, has led to a significant increase in average prices for leading brands [3][4] - Small Appliances: The competitive landscape for small appliances has improved, with profit margins showing significant recovery [1][4][9] Valuation and Dividend Insights - Valuation Metrics: - Gree: Valuation around 7x, dividend yield approximately 7% [6] - Midea: Valuation around 12x, dividend yield including buybacks about 6% [6] - Haier: Valuation around 10x, dividend yield between 4-5% [6] - Market Performance: These valuation levels are expected to support market performance for these companies [6] Future Outlook - Market Expectations: The probability of continued government subsidies next year is high, although the marginal effect may weaken [5] - Export Dynamics: Leading white goods companies derive over half of their business from overseas markets, which may offset domestic fluctuations due to subsidy reductions [7][11] - Investment Recommendations: Companies with solid performance and elasticity, such as Hisense, Bear, and TCL, are recommended for investment [12] Additional Insights - Competitive Landscape: Stone Technology has emerged as a leading brand in the vacuum cleaner market, with expectations for profitability to improve in Q3 despite short-term pressures [10] - Sector Resilience: The home appliance sector is expected to maintain positive growth in annual or quarterly profits, even with potential short-term declines in retail sales [7]