Guolian Minsheng Securities: Domestic sales rebound while overseas sales face setbacks, maintaining a "recommended" rating for the home appliance industry.

Guolian Minsheng Securities released a research report stating that the improvement of home appliances is expected, and they maintain a "recommended" rating. In March, domestic air conditioner sales rebounded, continuing to improve month-on-month and better than production expectations; Middle East exports are facing high uncertainties due to geopolitical conflicts, and the repair process may encounter short-term setbacks. The year-on-year total air conditioner sales for the month were -2%, narrowing from the declines in January and February. Going forward, with rising costs and weak demand stability, the concentration of domestic sales is increasing, and the outlook is cautiously optimistic. As the peak season for domestic sales approaches, the sales prosperity is worth monitoring. The leading companies have diversified their overseas operations and the momentum for brand expansion is strong, with no change in the mid- to long-term alpha. Currently, the relative valuation of white goods is at historical lows, with stable growth and high dividends. Key viewpoints of Guolian Minsheng Securities: - Industry data for March air conditioner sales - In March, domestic air conditioner shipments increased by 6% year-on-year, surpassing expectations and improving from January and February. The sales performance in March was better than the previous months. - The market performance of air conditioners has been weak since the beginning of the year, with retail sales volume declining by 18% in March and a cumulative decline of 13% in the first quarter. This could be related to the expected rise in costs and inventory preparations in peak season. - Leading companies like Midea, Gree, and Haier saw significant increases in domestic sales in March. Market share increased for these companies, outperforming the industry. - Geopolitical disruptions are affecting exports, with a 10% decline in March. However, there is hope for recovery as the situation stabilizes. Risks include a significant increase in raw material costs and uncertainties in tariffs and external demand.