China Merchants Securities's Mid-Term Strategy for the Home Appliance Industry: Resonance of Technological Growth, Dividend, Asset Support

The Zhitong Finance App learned that China Merchants Securities released a research report saying that the AI technology market dominated the first half of 2026, the marginal effects of domestic subsidies on consumer demand for home appliances declined, the cost side was constrained by rising prices of bulk raw materials, and at the same time faced upward pressure on the RMB, showing that the overall performance sector was under pressure. Looking ahead to the second half of the year, the bank suggests preparing for both: the theme of scientific and technological growth resonates, and dividend assets underpin defense.

The main views of China Merchants Securities are as follows:

The home appliance industry outperformed the market in the first half of 2026

As of June 30, the home appliance sector had a rise and fall of +4%, ranking 16th in the industry. The bank concluded that the main factors were due to multiple factors such as growth style preferences (increased share of TMT transactions), declining domestic sales and subsidies (shortage of subsidy funds in some regions after 618 in 2025), and the outbreak of the overseas US-Iran war (rising prices of bulk raw materials).

Technological growth: display glass+3D printing+two-wheelers+household storage

Focusing on the direction of the interim report exceeding expectations, the bank proposed focusing on TCL Electronics, Hisense Vision in the display field, upstream panel/glass-based board BOE, TCL Technology, and the cutting edge of advanced card position AI packaging technology. In January-April, customs exports of 3D printing increased 100% year-on-year. For the first time, desktop 3D printers entered the “15th Five-Year Plan” to expand consumption, and the time has come for 3D printers to break the circle. Two-wheeler overseas companies, represented by Taotao and Chunfeng, continued to lead the development of the industry in the first half of the year. Domestic demand faced a painful period when the new national standard was implemented, and it is expected that electric oil cutting will accelerate. In terms of household storage, demand for European balcony energy storage is exploding, driven by the UK's liberalization of installation restrictions and the withdrawal of the Dutch net metering policy. The Strait of Hormuz affects European household energy bills, and balcony energy storage potential is expected to be released at an accelerated pace.

Dividend assets: Internationalization has entered a harvest period, capital expenditure is declining, and interest in dividends is rising

The increase in the systematic valuation of home appliance dividend assets is essentially an improvement in transaction cash flow (stable competitive pattern, declining capital expenditure), a decline in long-term risk-free interest rates (increased willingness to pay dividends), and an improvement in ROE profits (manufacturing overseas). As peripheral warfare resumes and the technology market enters the second half of the market, fluctuations increase, and it is expected that part of the market's capital will change its style and layout dividend asset defense. The domestic competition pattern for home appliances is stabilizing, the overseas production capacity layout is improving, large-scale mergers and acquisitions are declining, the overall capital expenditure of leading white and black electronics companies has entered a downward cycle, and the international layout has entered a harvest period. With the help of long-term free cash flow improvements, companies can increase the payment of shareholders' dividends and buy back stocks, in line with the market's pursuit of certainty in dividend rates and returns.

Investment advice: Seize that the interim results exceed expectations and look forward to a return in value

1) The direction of technological growth is recommended for TCL Electronics/Hisense Video/Glass-based TCL Technology; 3D printing, creative three-dimensional, focusing on Scanning Technology and Jialian Technology; two-wheeler Taotao Vehicle Industry/Chunfeng Power; Household Storage Anke Innovation/Huabao Xinneng; Tool Quanfeng Holdings/Chuangke Industrial/Superstar Technology. 2) Dividend assets. We recommend Baidian's leading Midea Group/Gree Electronics/Haier Smart Home, Civil Electrician Bull Group, and Small Home Appliance Supor.

Risk warning: rising costs of upstream raw materials, sharp appreciation of RMB, export trade frictions.