Orient: Ice wash exports maintain high prosperity, while domestic sales of white goods are expected to improve month-on-month.

Orient released a research report stating that the trend of decline in domestic sales of white goods continues under a high base, with the overall performance in Q2 meeting expectations. The decline in air conditioning exports has narrowed marginally, while exports of refrigerators and washing machines remain strong, and this trend is likely to continue. The firm believes that the overall rhythm for white goods this year is expected to be low in the first half and high in the second half, with month-on-month growth likely to improve in the coming months. In addition, the exports of refrigerators and washing machines benefit from sustained high growth in overseas demand, policies, and market dividends. Major brands generally show growth in exports, and the overseas demand sentiment is expected to continue, with market share continuing to concentrate toward major brands that are suitable for the overseas market. Orients main points are as follows: Domestic air conditioning sales decline narrows, refrigerator and washing machine domestic sales remain relatively stable. According to data from Industry Online, in June, the domestic sales of air conditioners reached 11.402 million units, down 7.4% year-on-year, a significant improvement from the year-on-year decline of 15.0% in May, mainly benefiting from the 618 promotional event, which helped reduce online inventory; some companies began to restock. In June, domestic refrigerator sales were 3.439 million units, a year-on-year decrease of 4.2%; washing machine sales were 2.660 million units, a year-on-year decrease of 9.6%. In terms of brands, in the household air conditioner industry, Midea and Gree are at the forefront of domestic sales rankings. In June, Mideas domestic sales reached 3.200 million units, with a market share of 28.1%; Gree sold 2.400 million units domestically, down 26.2% year-on-year, with a market share of 21.0%. Haier, Aux, Hisense, Changhong, and TCL follow closely behind, but overall, domestic sales performance across brands still shows differentiation. In the refrigerator sector, Haier's domestic sales were 1.250 million units, down 0.8% year-on-year; Midea sold 620,000 units, up 10.7%, showing an upward trend against the grain. In the washing machine sector, Haier's domestic sales were 1.135 million units, down 7.8% year-on-year; Midea sold 730,000 units, up 14.1%. The firm believes that the overall rhythm of white goods is expected to be low in the first half of the year and high in the latter half, with month-on-month growth likely to improve. Export differentiation in white goods, with air conditioning exports still in a declining channel, while overseas high temperatures promote localized destocking. According to data from Industry Online, in June, air conditioning exports were 6.794 million units, down 7.1% year-on-year and down 10.4% month-on-month, mainly affected by the gradual onset of the off-season, but overall benefited from tariff easing and high temperatures in Europe. In terms of brands, Midea exported 1.800 million units; TCL exported 1.000 million units, down 18.0% year-on-year. Among them, Haier, Changhong, and Chigo all achieved counter-cyclical growth, with Haier exporting 490,000 units, up 22.5% year-on-year; Changhong exported 380,000 units, up 72.7% year-on-year; Chigo exported 80,000 units, up 166.7% year-on-year. The firm believes that as the destocking effects in various overseas regions gradually become evident, localized high temperatures and restocking demands will continue to have a positive impact on air conditioning exports, which are expected to see marginal recovery. Refrigerator and washing machine exports continue to grow rapidly, maintaining around 20% growth rate in June. According to data from Industry Online, in June, refrigerator exports were 5.403 million units, up 17.0% year-on-year; washing machine exports were 4.868 million units, up 20.2% year-on-year. The overall positive trend in refrigerators and washing machines is mainly due to strong demand from emerging overseas markets. The high growth in refrigerator exports stems from the marginal decline in tariffs and the release of overseas restocking demand, while the high growth in washing machine exports benefits from the strong domestic demand in Europe, the demographic dividend in Africa, and improvements in infrastructure and logistics. In terms of brands, in the refrigerator export sector, Oma and Hisense exported 1.172 million units and 1.041 million units, up 30.1% and 30.5% year-on-year, respectively, steadily rising. In addition, the top seven brands in refrigerator exports, including Midea, Meiling, Haier, TCL, and Konka, all continued to show year-on-year growth in June. In the washing machine sector, Haier and Midea exported 1.160 million units and 832,000 units, up 23.7% and 7.3% year-on-year, respectively, reinforcing their leading advantage. Hisense maintained significant year-on-year growth, exporting 606,000 units, up 89.0% year-on-year. The firm believes that exports of refrigerators and washing machines benefit from sustained high growth in overseas demand, policies, and market dividends, with major brands generally increasing their exports. The overseas demand sentiment is expected to continue, with market share continuing to concentrate toward major brands that are compatible with the overseas market. Risk warning There is uncertainty regarding the sustainability of the old-for-new subsidy policy, tariff fluctuations, and raw material cost volatility.