China consumer durables going global: HVAC, white goods and robotic vacuum cleaners Report Interpretation

Overview

Goldman Sachs examines how Chinese consumer-durables companies can expand internationally across HVAC, refrigerators and washing machines, and robotic vacuum cleaners. The report argues that larger overseas revenue pools, rising Chinese supplier share and, in many cases, better profitability make global expansion a central long-term theme.

Core views

Goldman Sachs frames overseas expansion as a key theme for its covered Chinese consumer-appliance and electronics companies. The institution argues that growing international exposure creates an additional revenue stream and can improve overall profitability. Its analysis assesses addressable market size, prospective market share and implied overseas-business valuation for HVAC, white goods and robotic vacuum cleaners. For HVAC, Goldman Sachs forecasts ex-China TAM to increase from US$149bn in 2026E to US$228bn in 2035E, or roughly 5% revenue CAGR. It identifies residential-air-conditioner penetration in emerging Asian and Latin American markets, and climate-change-driven adoption in Europe, as key demand drivers. New commercial applications—including AI data-center cooling, industrial uses and agriculture—are expected to add demand, primarily in developed markets. Chinese manufacturers' combined ex-China HVAC share is forecast to rise from 12% in 2026E to 20% in 2035E. Midea's share is projected to grow from 7% to 11%, supported first by Europe and then by ASEAN, Middle East and Latin American expansion; Gree's share is projected to reach 3%, reflecting Goldman Sachs' more conservative view because the company remains domestically focused and its overseas push has not meaningfully accelerated. Overseas HVAC revenue is forecast to rise from US$11.4bn to US$24.7bn for Midea and from US$3.5bn to US$7.7bn for Gree between 2026E and 2035E. Using each company's 2025 overseas-HVAC revenue mix to allocate current market capitalization, Goldman Sachs estimates overseas HVAC values of US$15.4bn for Midea and US$4.2bn for Gree, implying 1.4x and 1.2x P/S, respectively, on 2035E overseas HVAC revenue discounted back to 2026E. For white goods, comprising refrigerators and washing machines, ex-China TAM is projected to rise from US$137bn in 2026E to US$208bn in 2035E, also about 5% CAGR. The report expects emerging-market penetration to drive growth, while developed-market demand remains comparatively stable on replacement demand. Chinese suppliers' aggregate ex-China share is forecast to climb from 23% to 32%. Haier's share is expected to increase from 14% to 16%, led mainly by non-US markets because it is already among the leading US players. Midea's share is forecast to increase from 5% to 8%, driven by both developed and emerging markets where its current shares are low. Goldman Sachs forecasts overseas white-goods revenue for Haier to rise from US$10.7bn in 2026E to US$19.4bn in 2035E, and for Midea from US$6.6bn to US$17.0bn. It estimates the current market-cap portions attributable to overseas white goods at US$7.5bn for Haier and US$7.8bn for Midea, corresponding to 0.9x and 1.0x P/S on forecast 2035E overseas white-goods revenue discounted back to 2026E. For RVCs, Goldman Sachs expects the fastest market growth: ex-China TAM is forecast to expand from US$6.4bn in 2026E to US$13bn in 2035E, about 8% CAGR. The report attributes this to still-early-stage product adoption; even in relatively developed markets such as the Nordics, Germany and the US, adoption is estimated at only around 20%. Chinese companies' combined ex-China share is projected to rise from 63% to 82%. Roborock's share is forecast to grow from 24% to 33%, supported by expansion into channels such as Costco and Walmart in the US, offline retail in Western Europe, and new markets including emerging Europe and Benelux, alongside its competitive product offering. Ecovacs' share is forecast to increase from 16% to 23%, but by less than Roborock's because Goldman Sachs sees weaker product and brand recognition. Overseas RVC revenue is forecast to increase from US$1.8bn to US$4.8bn for Roborock and from US$1.0bn to US$2.3bn for Ecovacs from 2026E to 2035E. Estimated overseas-business values are US$2.7bn and US$1.3bn, respectively, implying 1.3x and 1.2x P/S on forecast 2035E overseas RVC revenue. At the company level, Goldman Sachs is Buy-rated on Midea, with 12-month A/H target prices of Rmb103/HK$119, and on Haier, with A/H targets of Rmb29/HK$31. Both valuations use an exit P/E approach applied to 2028E EPS and discounted back to 2027E using a 9.5% cost of equity: 16x for Midea and 13x for Haier. Gree is Neutral, with a 12-month Rmb41 target based on a 10x exit multiple on 2028E EPS discounted to 2027E at a 9.5% cost of equity. Roborock is Buy with a 12-month Rmb190 target, based on a 17x exit P/E on 2028E EPS and the same discounting convention. Ecovacs is Sell with a 12-month Rmb56 target, based on a 16x exit multiple on 2028E EPS discounted to 2027E at a 9.5% cost of equity.

Analysis framework

The report sizes ex-China TAM for each subsector through 2035, identifies demand and penetration drivers, forecasts Chinese companies' market-share gains, converts these into overseas revenue projections, and compares implied overseas-business valuations using P/S. For individual stocks, it applies exit P/E multiples to 2028E EPS and discounts the resulting values back to 2027E using a 9.5% cost of equity.

Methodology notes

• Industry AnalysisSupply-demand framework

  Ex-China market sizing, penetration assumptions and market-share forecasts

  Goldman Sachs estimates each subsector's overseas addressable market and links growth to adoption, replacement demand and new applications, then forecasts the share captured by Chinese suppliers.

• Industry AnalysisPenetration-Rate S-Curve

  Penetration-led demand growth

  The report treats low penetration in emerging markets and in RVC adoption as a source of future market expansion.

• Valuation methodsP/E and PEG Valuation

  Discounted exit P/E valuation

  For the covered companies, Goldman Sachs applies an exit P/E multiple to 2028E EPS and discounts the resulting value back to 2027E at a 9.5% cost of equity.

• Valuation methodsPS valuation

  Implied overseas-business P/S valuation

  The report allocates current market value using overseas revenue mix and compares that implied value with forecast overseas revenue.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Midea Group (000333.SZ/00300.HK)

  Covered beneficiary of overseas HVAC and white-goods expansion

  Strengths

  Forecast overseas HVAC revenue rises from US$11.4bn in 2026E to US$24.7bn in 2035E; overseas white-goods revenue rises from US$6.6bn to US$17.0bn.

  Comparison

  Expected to expand HVAC share through Europe and then ASEAN, Middle East and Latin America; white-goods share is expected to rise from a low base in both developed and emerging markets.

  Risks

  Weaker global white-goods demand, higher materials costs, premiumization execution risk and greater low-to-mid-end competition.

• Haier Smart Home Co. (600690.SH/06690.HK)

  Covered beneficiary of overseas white-goods growth

  Strengths

  Forecast overseas white-goods revenue rises from US$10.7bn in 2026E to US$19.4bn in 2035E.

  Comparison

  Already among leading US players; future share gains are expected primarily from non-US markets.

  Risks

  Weaker global demand, rising raw-material costs, less effective marketing and channel-expense savings, and failure to integrate Candy or realize acquisition synergies.

• Gree Electric Appliances Inc. (000651.SZ)

  Covered HVAC exporter

  Strengths

  Forecast overseas HVAC revenue rises from US$3.5bn in 2026E to US$7.7bn in 2035E.

  Weaknesses

  The report takes a conservative view because Gree remains domestically focused and overseas expansion has not shown meaningful acceleration.

  Comparison

  Its projected HVAC share reaches 3% in 2035E, below Midea's projected 11%.

  Risks

  Demand sensitivity to macro conditions, property markets and stimulus; steel and copper costs; channel inventory; and diversification execution.

• Beijing Roborock Technology (688169.SH)

  Covered beneficiary of overseas RVC penetration and channel expansion

  Strengths

  Forecast overseas RVC revenue rises from US$1.8bn in 2026E to US$4.8bn in 2035E; the report cites competitive product offerings and new channel and market expansion.

  Comparison

  Its ex-China RVC share is forecast to rise from 24% to 33%, exceeding Ecovacs' projected 16% to 23% increase.

  Risks

  Intensifying competition, slower product launches or category expansion, heavier marketing spending, weaker consumer confidence and potential higher US tariffs.

• Ecovacs Robotics Co. (603486.SH)

  Covered RVC company

  Strengths

  Forecast overseas RVC revenue rises from US$1.0bn in 2026E to US$2.3bn in 2035E.

  Weaknesses

  The report sees weaker product and brand recognition than Roborock, limiting expected overseas share gains.

  Comparison

  Its projected ex-China RVC share rises from 16% to 23%, versus Roborock's 24% to 33%.

  Risks

  Faster demand recovery, stronger product development or expansion, and easing competition are identified as upside risks.

Key data

• Ex-China HVAC TAMUS$149bn in 2026E to US$228bn in 2035EApproximately 5% revenue CAGR
• Chinese players' ex-China HVAC share12% in 2026E to 20% in 2035EMidea: 7% to 11%; Gree projected to reach 3%
• Ex-China white-goods TAMUS$137bn in 2026E to US$208bn in 2035EApproximately 5% revenue CAGR
• Chinese players' ex-China white-goods share23% in 2026E to 32% in 2035EHaier: 14% to 16%; Midea: 5% to 8%
• Ex-China RVC TAMUS$6.4bn in 2026E to US$13bn in 2035EApproximately 8% revenue CAGR
• Chinese players' ex-China RVC share63% in 2026E to 82% in 2035ERoborock: 24% to 33%; Ecovacs: 16% to 23%

Impact & implications

The report argues that overseas market expansion can become a meaningful long-term revenue and valuation driver for Chinese consumer-durables companies. Its preferred exposures are Midea, Haier and Roborock, while its more cautious views reflect Gree's slower international progress and Ecovacs' relatively weaker product and brand positioning.

Risks

• Global macro weakness could disrupt white-goods demand.
• Higher raw-material costs could pressure product margins, including steel and copper costs for Gree.
• Midea faces premiumization-execution risk and greater low-to-mid-end competition.
• Haier faces risk around marketing and channel-cost savings and Candy integration synergies.
• Roborock faces competition, slower product launches or category expansion, higher branding investment, weaker consumer confidence and potential US tariff pressure.
• Ecovacs could benefit from faster demand recovery, stronger product development or easing competition.