Goldman Sachs Forecasts Weak China White Goods Growth in Q3, Keeps Buy Rating on Midea Group (00300)

Stock News14:10

Goldman Sachs has released a research report revising down its revenue and net profit forecasts for the white goods companies it covers for the third quarter of 2026, with cuts ranging from 3% to 11% for revenue and 3% to 19% for net profit.

These adjustments reflect weaker-than-expected domestic demand in the third quarter, which, despite resilient export performance, has also weighed on the profitability of the covered companies.

The bank now expects the weighted average year-on-year decline in third-quarter 2026 revenue and net profit (excluding one-off fair value gains) to be 5% and 11% respectively, compared with 1% and 8% in the second quarter of 2026.

Ahead of the earnings releases, Goldman Sachs anticipates that investor focus will center on six key areas: first, the domestic demand outlook for the fourth quarter of 2026 and beyond, along with measures to address weak demand; second, competitive dynamics and pricing trends; third, overseas demand prospects and steps to further expand into international markets; fourth, cost trends and measures to cope with cost pressures; fifth, the development of new business lines; and sixth, potential plans to enhance shareholder returns.

The report notes that Midea Group Co.,Ltd. (00300) demonstrated a degree of resilience in the third quarter, benefiting from healthy growth in overseas home appliance and 2B businesses, and is expected to outperform among the white goods companies covered.

The bank expects that the group's proactive adjustment of its domestic channel strategy will help further reduce channel inventory and dealer burdens, which should support an increase in retail market share.

Goldman Sachs maintains a Buy rating on Midea Group Co.,Ltd. (00300), with an H-share target price of HK$113 and an A-share target price of RMB98 for Midea Group Co.,Ltd. (000333.SZ).

In addition, Goldman Sachs has lowered its earnings per share forecasts for Hisense Home Appliances (00921) for 2026 to 2028 by 3% to 7%, maintaining an H-share target price of HK$26 and an A-share target price of RMB29 for Hisense Home Appliances (000921.SZ), with a Buy rating.

Goldman Sachs has also cut its earnings per share forecasts for Gree Electric Appliances (000651.SZ) for 2026 to 2028 by 2% each year, maintaining a target price of RMB41 and a Neutral rating.

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