Industrial Securities released a research report projecting that in 2026, domestic home appliance sales may face pressure due to subsidy reductions and high base effects, with a trend of lower performance in the first half and recovery later in the year. Starting from Q2 2026, exports are expected to benefit from lower base effects, easing tariff impacts, anticipated Fed rate cuts, recovering demand in Europe and the U.S., and strong growth in emerging markets, making export prospects brighter than domestic sales. The investment focus is on leading home appliance exporters with strong overseas momentum, solid valuations, and stable dividends. Recommendations include white goods leaders Midea Group (000333.SZ) and Haier Smart Home (600690.SH), black goods leaders Hisense Visual (600060.SH) and TCL Electronics (01070.HK), and robotic vacuum leader Roborock (688169.SH). Key insights from Industrial Securities are as follows:
**Home Appliance Review: Divergent Domestic Performance, Overall Resilience** 1) **Costs**: Since 2025, raw material prices have fluctuated upward, while shipping costs have declined, keeping overall cost pressures manageable. 2) **Real Estate**: Policy optimizations have supported a mild recovery in post-cycle kitchen appliance valuations and fundamentals. 3) **Domestic Demand**: Subsidies boosted home appliance retail sales, outperforming broader consumption trends. However, due to higher base effects and policy timing, domestic sales growth in 2025 was stronger in the first half before slowing. 4) **Exports**: Tariff disruptions and high base effects led to a temporary slowdown in export growth since Q2 2025. However, leading companies demonstrated resilience through global diversification and emerging market contributions.
**Dividend Appeal**: With moderate payouts and low valuations, the home appliance sector offers attractive dividend yields, averaging 3.2%—ranking fourth among 31 primary industries. Despite stable absolute returns in 2025, relative performance lagged.
**Outlook for 2026**: Domestic sales may remain pressured in H1 due to base effects, while exports are expected to outperform. Top picks include leading exporters with strong dividend profiles.
**White Goods**: Established leaders are accelerating overseas expansion. Domestic sales in 2025 were buoyed by subsidies but slowed in H2 due to policy tapering and base effects. In 2026, growth may rebound in H2, supported by potential subsidy extensions. Exports are poised for stronger performance from Q2 onward, aided by lower tariffs and emerging market penetration.
**Black Goods**: Domestic TV markets continue premiumization, with RGB Mini LED products driving new profit growth. Overseas, events like the World Cup could boost demand, while Chinese brands enhance marketing and local distribution to capture market share. Panel price stability further supports margins.
**Small Appliances**: Domestic demand hinges on subsidies and macroeconomic conditions, while export risks persist due to geopolitical tensions. However, China’s dominant supply chain position and tariff absorption capabilities may consolidate market share among top manufacturers.
**Robotic Vacuums**: Domestic penetration could accelerate if subsidies continue in 2026, improving profitability. Market share is expected to concentrate further among top brands. Overseas, steady growth is anticipated, though competition among Chinese brands intensifies.
**Risks**: Sharp rises in raw material costs, weaker-than-expected demand, heightened competition, and policy uncertainties.
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