Caitong: The growth of emerging markets in household appliances is fast and has great potential. We continue to be optimistic about the export sector.

Caitong released a research report stating that there is currently a vacuum period in domestic policies, and the growth of terminal retail is still affected by the base effect of last year's replacement of old appliances with new ones. The bank still favors dividend-generating assets represented by leading companies in the white goods sector. On the export side, driven by better-than-expected U.S. real estate data, the bank believes that this may bring stable demand in the U.S. consumer market, and with further expectations of interest rate cuts, the heat in export chain transactions may continue, continuing to favor representative export sectors such as black and white goods. Caitong's main points are as follows: Review of the household appliance industry situation In terms of domestic sales, growth was good in the first half of the year driven by domestic subsidies, but growth has gradually come under pressure since October 2025 due to the high base of domestic subsidies; on the export side, despite disruptions in export orders due to U.S. tariffs, overall export growth has been strong, with emerging markets performing relatively well. Emerging markets have fast growth potential and increasing brand influence Taking into account the situation of both domestic and export sales of household appliances, the bank believes that export performance in the first half of 2026 may still be better than domestic sales. Opportunities in the export market can be considered from two dimensions: market and product. Looking at different regions, emerging markets have good growth rates and great market potential. Looking at different product categories, the growth rate of self-owned brands going abroad is fast, gradually increasing their influence. Continuous upgrade of product structure, increase in contribution of high-end products to profit level With the launch of new products in the spring of 2025, the Mini LED category has gradually regained market share, with RGB Mini LED products further improving color gamut compared to traditional Mini LED, and higher average unit prices. The bank believes that with the promotion of RGB Mini LED product lines and the launch of corresponding products overseas, the logic of further increase in gross profit margin will be strengthened. Actively laying out new tracks, new product categories open up new growth opportunities As consumers continue to pursue immersive free-form experiences, personalized recording and expression, and efficiency and convenience improvements, new product categories in household appliances will transform from basic functional needs to satisfy a completely new lifestyle. The demand for innovative products in specific scenarios such as smart glasses, action cameras, drones, UV printers, and other new product categories will quickly emerge, opening up new growth opportunities for household appliance companies. Risk warning: Domestic subsidy allocation lower than expected, export growth pace lower than expected, U.S.-China tariffs fluctuate, impact of raw material prices.