GF SEC: Home appliance domestic sales weak in the short term; focus on leading players' long-term stable operation certainty.

GF SEC released a research report stating that white goods performance is steady, with stable ROE and high dividend advantages, and is expected to benefit from the trade-in policy stimulus. Black goods leaders enjoy a triple resonance of product iteration dividends, improved domestic competitive landscape, and overseas share expansion. The logic of improving the competitive landscape in the cleaning appliance sector continues, and the elasticity of profit margin recovery in 2026 is viewed favorably. The two-wheeler industry is seeing improved domestic sales plus rapid progress in expanding into Southeast Asia. GF SEC's main viewpoints are as follows: Market Review Since October 1 (October 1~October 16), the home appliance sector has outperformed the Shanghai Composite Index by 3.06pct. By sub-sector, white goods (up 3.91%) have performed best since the beginning of the month, followed by kitchen and bathroom appliances (down -3.84%) and small household appliances (down -5.51%). White goods: According to AVC data, since October, online retail sales of air conditioners, refrigerators, and washing machines were -19.67%, -13.17%, and -12.95% YoY respectively; offline retail sales of air conditioners, refrigerators, and washing machines were -21.01%, -16.39%, and -14.52% YoY respectively. Black Goods The online penetration rate of Mini LED declined slightly YoY, with share divergence among leading brands. Based on the latest weekly data for October (26W40-41, 2026.09.28-2026.10.11), the online Mini LED sales penetration rate was 36.24%, -0.85pct YoY and +5.24pct MoM. The online retail volume shares of Redmi/Hisense/Vidda/TCL/Skyworth/FFALCON/Changhong were 11.46% /24.08% /8.85% /17.16% /11.05% /5.24% /2.76%, up +1.62/+2.28/+1.23/-0.74/+0.73/-1.28/-0.27pct YoY respectively. Small Household Appliances Since October 2026 (2026.09.28-2026.10.11), online sales in the robot vacuum industry were -26% YoY, with Ecovacs Robotics/Roborock/Narwal down -17%/-31%/-51% YoY respectively, and shares of 35%/34%/7%/8%, up +3.6pct/-2.4pct/+0.3pct/-4.2pct YoY respectively. Online sales in the wet-dry vacuum industry during the same period were -23% YoY, with Tineco/Roborock down -35%/+13% YoY respectively, and shares of 33%/37%, -6.1pct/+11.7pct YoY respectively. Risk warnings: rising raw material prices; significant exchange rate fluctuations; weakening industry demand; intensifying industry competition.