The geopolitical conflict in the Orient has led to rising costs. AWE will pay close attention to the iteration of black electricity technology.

Orient released a research report stating that geopolitical conflicts are intensifying, leading to an increase in raw material costs and European freight costs in the home appliance industry. White goods groups with higher operating efficiency and better global supply chain resilience have stronger risk resistance. With AWE2026 approaching, attention should be paid to technological iteration in the black electric industry. Key points from Orient's report: Geopolitical conflicts in the Middle East are escalating, causing raw material costs and European freight costs in the home appliance industry to rise. On February 28, 2026, the United States and Israel launched military strikes against Iran, leading to a large-scale retaliation from Iran and a sharp escalation in the situation in the Middle East. As a result, on March 2, the European line shipping index surged by 14%, leading to a short-term increase in European freight costs; the conflict pushed up oil prices, with ICE Brent crude rising by nearly 6% on March 2, directly raising the costs of plastics, packaging, and chemical raw materials. Production data for the three major white goods in March 2026 has been released. According to Industry Online, a total of 39.11 million units of white goods were produced in March, a decrease of 4% compared to last year's production performance. By product, air conditioning production in March reached 23.34 million units, down by 6.1% year-on-year; refrigerator production reached 8.43 million units, up by 1.6% year-on-year, and washing machine production reached 7.43 million units, down by 3.4% year-on-year. The production planning for air conditioning and washing machines in March was further narrowed due to the combined effect of pre-holiday demand, weakening subsidy policy effects, and channel destocking caused by the Spring Festival mistiming. It is expected that with the weakening of the base effect and the orderly continuation of subsidy policies, production in Q2 is expected to pick up. As AWE2026 approaches, attention should be paid to the competition in high-end Miniled technology. AWE2026 will be held in Shanghai on March 12-15 as one of the three major international consumer electronics and home appliance exhibitions, with a focus on TV display technology to enhance its influence. Hisense Visual Technology is expected to showcase a new product with four-color RGB-Miniled that adds a fourth color chip to the traditional three-color system, significantly improving color gamut and accuracy; TCL ELECTRONICS is expected to increase its technical coverage by offering both SQD-Miniled and RGBMiniled technologies. Skyworth announced a strategic partnership with Panasonic on February 23, with Skyworth fully responsible for the production, sales, marketing, and channel expansion of Panasonic-branded TVs in the global market, and is expected to exhibit OLED technology products. Investment recommendations and investment targets: Theme 1: Leading companies with higher operating efficiency and stable performance during cost escalation cycles, combined with higher dividend yields, can be preferred for conservative allocation, with related targets being Haier Smart Home and Hisense Visual Technology. Theme 2: Going global remains a long-term theme, with a potential valuation switch in 2026, with related targets being Beijing Roborock Technology and Kingclean Electric. Theme 3: With AWE2026 approaching, attention should be paid to technological iteration in the black electric industry, with TCL ELECTRONICS being a related target. Risk Warning: The sustainability of the old-for-new subsidy policy is uncertain, tariff disturbances may persist, and further cost increases may result from escalating geopolitical conflicts.