Research from CITIC SEC indicates that the Chinese home appliance sector experienced overall demand fluctuations in the first half of 2026. Domestic sales were impacted by a high base of comparison and weather conditions, while external factors such as costs and exchange rates intensified differentiation within the export segment. However, leading companies are expected to maintain resilient performance in the second quarter and the first half of the year.
Looking ahead to the second half of 2026, the firm believes industry opportunities will increasingly stem from long-term trends and the ability of companies to adapt. Three primary investment themes have been identified: first, black-appliance leaders leveraging global channels and integrating overseas acquisitions to consistently increase market share; second, white-appliance leaders accelerating their global footprint in production, distribution, and branding to open new avenues for growth; and third, the liquid cooling demand entering a phase of rapid expansion, with industry leaders positioned to benefit first.
Analysis of 16 major international appliance companies for the second quarter of 2026 reveals a 4.8% year-on-year increase in aggregate revenue. The small appliance and HVAC sectors grew by 10.3% and 7.5% respectively, while refrigeration/washing and lighting/water heater segments declined by 1.7% and 2.7%. Profitability faced pressure from rising raw material and tariff costs, with overall gross margins falling by 1.4 percentage points year-on-year. Net profit margins decreased by 1.3 percentage points, despite active cost-cutting and efficiency measures. Inventory levels were down 1% year-on-year but up 3.3% sequentially, with HVAC inventory growth of 5% and 4.4% respectively aligning with commercial business expansion.
North American commercial demand remained robust in Q2, driven by strong data center orders. Johnson Controls and Trane Technologies saw a 37% and 43% year-on-year increase in orders in the Americas. Carrier Global's global commercial HVAC orders grew by roughly 65%, with data center orders surging over 300%. Lennox International's building climate solutions revenue grew 15% organically, while Daikin's applied HVAC revenue in the Americas rose 29%, supported by data center demand and capacity improvements. The overall trend shows that project-based HVAC demand, fueled by North American data center and infrastructure investment, is growing faster than revenue, providing strong forward visibility.
In the North American residential sector, Q2 demand showed sequential improvement but remained under pressure year-on-year, with mixed results across companies. Carrier's residential and light commercial sales in North America increased by 9% and 10% respectively. Lennox's residential revenue fell 7% and unit sales dropped 12%, a significant improvement from the 21% decline in Q1. Daikin's North American residential revenue rose 12%, with residential ducted system sales up 18%, driven by channel expansion and market share gains. In the major appliance segment, the market contracted by about 3% in Q2. Whirlpool reported a 1.5% decline in North American revenue, while Electrolux saw a 2.9% drop in organic revenue. On pricing, Lennox benefited from a 3% contribution from price and mix. Whirlpool implemented a price increase of over 10% in Q2, with a further 4% rise in July. Electrolux raised prices by 5% to 20% in Q2, turning pricing contribution positive, primarily to offset higher tariffs and raw material costs.
European HVAC demand showed improvement in Q2, while major appliance demand remained broadly stable. Hot weather and energy-efficiency replacement needs supported residential HVAC. Carrier's European residential and light commercial sales grew by high single digits. Daikin's light commercial and variable refrigerant volume (VRV) sales in Europe increased by 7% and 9% respectively, while heat pump sales grew 7%. In major appliances, the European market was flat year-on-year. Electrolux reported 4.5% organic revenue growth in Europe, Middle East, Africa, and Asia, driven by volume, product mix, and market share gains.
Demand in Asia-Pacific remained steady in Q2, while Latin America showed resilience. The Middle East faced disruptions from geopolitical factors. Johnson Controls' Asia-Pacific revenue and orders grew 15% and 12% year-on-year. Trane Technologies' Asia-Pacific revenue and orders rose 10% and 31% respectively. Daikin's revenue in Asia and Oceania increased 17% and 28% respectively, with strong performances in India, Thailand, and Australia. In Latin America, Electrolux saw 4.5% organic revenue growth, driven by Brazilian volume. Whirlpool's Latin American revenue grew 7.8%, but declined 1.7% on a forex-adjusted basis, as Brazilian volume growth did not fully offset price and mix headwinds. The Middle East was impacted by project delays, extended logistics cycles, and geopolitical tensions, which weighed on the HVAC businesses of Trane and Daikin.
Key risks to the outlook include weaker-than-expected demand in Europe and emerging markets, tariff policy fluctuations, lower downstream demand, intensifying competition, significant volatility in raw material costs, and potential data distortion from third-party sources.
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