China Securities Co., Ltd.: The home appliance and smart hardware sectors are shifting from "domestic stock competition" to "global expansion + growth of new technology categories."

China Securities Co., Ltd. released a research report stating that the home appliances and smart hardware sectors are shifting from "domestic stock competition" to "global expansion + growth in new technology categories," with investment strategies balancing stable value and emerging growth. Among traditional home appliances, the leading white goods companies benefit from a stable structure, operational efficiency improvements, overseas expansion, and high dividends, reinforcing their dividend-like attributes; black goods rely on structural upgrades such as large sizes and Mini LED, along with an increase in global market share, which is expected to raise their profit margins; the capital expenditures and depreciation peaks in the panel industry are gradually passing, entering a period of profit and cash flow release. Growth areas focus on clean appliances, smart imaging, consumer-grade 3D printing, and AI NAS, which are expected to drive industry growth due to low penetration rates, technological iterations, and expanding overseas demand. Leaders with advantages in R&D, supply chains, and global channels are expected to gain market share. The main points from China Securities Co., Ltd. are as follows: The home appliance sector appears straightforward but actually employs various research methodologies: white goods are currently more of a stable consumer product, with the market focusing on dividend yields; kitchen appliances are a typical post-real estate cycle industry that is closely related to real estate policy and demand; new and emerging sub-industries require greater attention on space, technological evolution, and structural changes in research aspects. Focus regions: from domestic to international. Previous research on home appliances has established a deep understanding framework regarding domestic products and channels; however, future industry growth will primarily arise from overseas markets. The overseas market is relatively distant for domestic investors, and tracking systems are still underdeveloped, but it is indeed a key focus for future research. White goods: steady growth, high dividends, and low valuations make them a model of value stocks. The domestic market is gradually nearing its ceiling, but there is still room for structural improvement. The competitive landscape of the industry is stable, with the three major white goods firms maintaining an unshakeable position domestically; in recent years, they have been continuously improving efficiency through DTC transformation. Future growth in the white goods industry will mainly center on the ongoing expansion in overseas markets, becoming a crucial source of growth. Black goods: a mature home electronics sector driven by high-end structural upgrades and global expansion. The domestic market exhibits significant stock characteristics and is less related to real estate; growth mainly relies on structural upgrades of high-end models like large sizes, Mini LED, and AI smart interactions to raise average prices. Emerging overseas markets offer substantial growth potential, serving as the industrys core growth engine in the medium to long term. Industry leaders Hisense Visual Technology and TCL ELECTRONICS build barriers through self-researched complete machines, localized global production, multi-regional channels, DTC brand operations, and sports marketing, continuously capturing market share from local overseas brands. Competition in the industry has shifted from simple low-price competition to comprehensive comparisons based on product intelligence, localized overseas operations, and home interconnectivity capabilities, with domestic leaders continuously consolidating global market share and profit margins steadily rising with the advancement of high-end products and overseas expansion. 3D Printing: an emerging manufacturing sub-industry characterized by both technological growth and ongoing payment attributes. With continuous upgrades in multi-color capabilities, speed, and material systems, application scenarios are expanding towards consumer-grade manufacturing. Leading companies accumulate users through hardware sales and form sustained revenue based on consumables, software, and content ecosystems, showing strong extendibility in their business models. Clean Appliances: a growth-oriented home electronics industry characterized by technology-driven advancements, improved penetration rates, and rapid structural changes. Technologies such as LDS, AI recognition, robotic arms, and self-cleaning base stations are continually evolving, consistently enhancing product experiences and expanding usage scenarios. Current domestic and international penetration rates still have significant room for improvement, and leading brands are expanding their market share through advantages in R&D, supply chain, channels, and branding. Industry competition is transitioning from price orientation to competition based on technology and globalization capabilities, with further concentration expected in the market structure. Smart Imaging: a growth-oriented smart hardware track driven by portable imaging and flight control technology, expanding overseas outdoor demand and accelerating industry concentration. Technologies such as anti-shake algorithms, panoramic imaging, low-altitude flight control, and AI intelligent editing are continually iterating, expanding diverse usage scenarios for sports recording, outdoor aerial photography, and vlog creation. There is still significant room for improvement in the outdoor consumption penetration rates both domestically and internationally, and leading manufacturers continue to capture market share through self-researched imaging, complete supply chains, and global channel advantages. Competition in the industry has shifted from hardware parameters to comprehensive comparisons based on self-researched technology, content ecosystems, and localized overseas operations, with leading firms continuously increasing their share. Complete hardware serves as the entry point for traffic, while accessories and editing memberships generate long-term value-added income, with the overseas market being the core source of growth for the sector. NAS: a high-growth smart hardware sector empowered by AI, transitioning from storage hardware to a household digital hub. Home NAS has comprehensive advantages but faces core barriers such as products, markets, and awareness, leading to low penetration rates. AI thoroughly addresses the development bottlenecks of traditional NAS, transforming NAS from niche geek devices into smart digital hubs for the general public, achieving exponential growth in user base. Global AI NAS sales are expected to grow from 60,000 units in 2024 to 6.69 million units in 2035, with a CAGR of 54%, and penetration rates are expected to exceed 60%. The competitive landscape for AI NAS is about to enter an accelerated restructuring phase. Risk warning: 1. Macroeconomic growth is slower than expected; home appliance products are durable consumer goods closely tied to resident income expectations. If macroeconomic growth slows down, it may greatly impact industry sales. 2. Significant fluctuations in raw material prices: the raw material costs account for a substantial portion of home appliance companies' operating costs. If commodity prices rise again, profitability in the sector will weaken. 3. Risks in overseas markets: uncertainties have increased in overseas environments in recent years. Home appliance leaders have a high proportion of exports; if external demand declines, their performance will be adversely impacted. 4. Intensified market competition: in a weak market environment, industry competition becomes more intense, with some companies facing the risk of market share loss and low-price competition dragging down profitability.