May Appliance Domestic Demand Weak, Exports Improve, Bullish on Midea, Roborock, Ninebot

Overview

This report tracked the performance of domestic and external demand in China's appliance industry in May 2026. Core conclusion: Domestic demand remains weak under high base effects, both retail and shipments declined; initial 618 promotion performance was flat; however, exports showed positive signals, growth significantly improved sequentially and beat expectations, mainly benefiting from low bases and share gains of Chinese brands in overseas markets. Based on this, the report maintains Buy ratings for leading companies with strong overseas competitiveness and new business growth drivers (such as Midea Group, Roborock, Ninebot), believing their valuations are attractive and downside risk is limited.

Core views

Domestic Demand Side: May appliance domestic demand continued to face pressure. National Bureau of Statistics data shows May appliance and electronic product retail sales decreased YoY by 16%, similar to April's decline, despite facing higher base pressures. On the production side, May domestic AC factory shipment output decreased YoY by 15%, below market expectations, mainly driven by front-loaded demand last year and price hikes since April this year. Domestic shipments of washing machines and refrigerators also decreased by 6% and 4% respectively. Regarding the upcoming June, the report believes that due to the high base effect brought by the old-for-new trade-in policy in June of last year, base pressure may gradually ease from late June to July, but initial sales data of the 618 promotion were not optimistic, and some brands even adopted pricing strategies lower than Double 11 to stimulate demand. Exports and Overseas Markets: Export performance became a highlight. May overall appliance export growth accelerated to high double-digit growth, exceeding market and IOL expectations. Among them, AC export decline widened from -12% in April to only -4% in May. Exports of refrigerators and washing machines remained positive. This improvement came not only from base effects but also reflected continuous share gains of Chinese brands in overseas markets. In addition, leading indicators such as US pending home sales show recovery in sentiment in the US housing market, combined with sequential improvements in consumer confidence indices in Europe and America, providing support for subsequent exports. The report specifically points out that with the clarification of geopolitical details (such as US-Iran memorandum), demand visibility is expected to further improve. Sub-categories and Company Performance: In cleaning appliances, overseas RVC demand was strong. May overseas APP downloads increased YoY by 38%, Roborock download growth reached 54%, and market shares in Americas and Europe increased by 10 and 2 percentage points respectively. Ninebot's lawn mower robot downloads doubled growth. In the domestic online market, Roborock's sales decline on Tmall/Taobao platforms was smaller than the industry average, performing relatively better than Ecovacs. In major white goods, Haier and Hisense outperformed the industry in total shipment volume growth, while Midea and Gree lagged behind, but Midea achieved 26% high growth in refrigerator exports. Valuation and Stock Selection: The report continues to favor Midea Group (A/H), believing its shareholder returns provide downside protection, while overseas markets and emerging businesses provide upside space. At the same time, holds a constructive view on Ninebot, favoring its comprehensive product line (including domestic electric two-wheeler share growth, structural growth of lawn mowers, and overseas E2W potential), and current valuation is at historical lows. Roborock is also favored due to overseas share gains. In contrast, XGIMI and Appotronics are given Sell ratings due to fierce competition and weak demand.

Analysis framework

The report adopts a typical 'top-down' combined with 'bottom-up' analysis framework. First, judging the industry heat cycle turning point through macro data (real estate completion and sales, consumer confidence index) and high-frequency industry data (IOL shipments, customs export data, NBS retail data), distinguishing the asynchronous performance of domestic and external demand. Second, verifying micro-level brand competitiveness and market share changes using channel tracking data (such as Tmall/Taobao sales, Amazon sales, APP download volumes), especially targeting companies with strong outbound logic. Finally, combining valuation models (DCF or PE multiple method) with risk factors (raw material costs, tariffs, competitive landscape) to give individual stock ratings. This analysis method emphasizes finding stocks with alpha (excess return) capabilities when industry-wide beta is weak, i.e., companies that can offset domestic cyclical pressures through overseas expansion or new category innovation.

Methodology notes

• Industry/Industrial Analysis FrameworkSupply and Demand Framework

  Supply and Demand Framework

  The report analyzed the supply-demand mismatch in the appliance industry by comparing weak demand under high domestic bases with supply release under low overseas bases. This method helps investors understand why export-oriented companies can still grow when domestic demand is poor.

• Industry/Industrial Analysis FrameworkUpstream-Midstream-Downstream Industry Chain Transmission

  Upstream-Midstream-Downstream Industry Chain Transmission

  The report focuses on the benefit of stable upstream raw materials (copper, aluminum) prices to midstream manufacturing costs, and the lagging impact of downstream real estate sales data on appliance demand, reflecting a full industry chain perspective analysis logic.

• Valuation MethodPE/PEG valuation

  PE/PEG Valuation

  The report uses Forward P/E as the main valuation anchor, combined with growth rate (implicit PEG logic) to evaluate the valuation rationality of high-growth targets such as Ninebot and Roborock, pointing out they are at historical lows.

Asset mapping & comparison

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

• Midea Group (0300.HK)

  Benefit: Overseas market share gain, emerging business growth, shareholder returns provide downside protection

  Strengths

  Perfect global layout, rich product line, stable dividends

  Weaknesses

  Large decrease in domestic AC shipments (-35%)

  Comparison

  Better export performance than Gree; More attractive valuation than Haier

  Risks

  Weak global macro demand, rising raw material costs, execution risk of premium strategy

• Roborock (688169.SS)

  Benefit: Strong overseas vacuum demand, continuous market share gains

  Strengths

  Overseas APP download growth faster than industry, significant US and Europe share increase

  Weaknesses

  Domestic online sales still face industry-wide decline pressure

  Comparison

  Stronger overseas growth momentum than Ecovacs, performs better than industry

  Risks

  Intensified overseas competition, tariff risks, exchange rate volatility

• Ninebot (689009.SS)

  Benefit: Explosive growth of lawn mowers, domestic electric two-wheeler share increase

  Strengths

  High new category growth potential, valuation at historical lows

  Weaknesses

  Execution uncertainty in new business expansion

  Comparison

  Stronger tech attributes and growth elasticity compared to traditional home appliance companies

  Risks

  New product launches slower than expected, intensified overseas competition, tariff impacts

• Hisense Home Appliances (002508.SZ)

  Benefit: Central air conditioning business stabilizes, revenue and profit sequential recovery

  Strengths

  Haier-Hisense joint venture performs steadily, dividend yield provides protection

  Weaknesses

  Domestic AC export decline (-17%), highly correlated with real estate

  Comparison

  Higher commercial AC proportion compared to pure white goods companies, less affected by real estate cycles

  Risks

  Further real estate market slowdown, intensified domestic competition

Key data

• May Domestic AC Factory Output Shipments YoY-15%Further deterioration compared to -7% in April, below expectations
• May Appliance Retail Sales YoY-16%Flat decline from April, continuous weakness under high base
• May AC Exports YoY-4%Significantly narrowed from -12% in April, better than expected
• May Overseas Robot Vacuum APP Downloads YoY+38%Accelerated from +34% in April, showing strong overseas demand
• Roborock May Overseas Downloads YoY+54%Faster than industry average, rising US and Europe market share
• Midea Group Target Price (H-Shares)HKD 113.00Based on 16x 2028E EPS, implying 34% upside
• Roborock Target PriceCNY 170.00Implies 75% upside
• Ninebot Target PriceCNY 62.00Implies 83% upside

Impact & implications

The report believes that although the domestic appliance sector still faces pressure from insufficient domestic demand and property dragging in the short term, the resilience of the export chain provides earnings buffer and a second growth curve for leading enterprises. For investors, focus should be paid to companies whose overseas market share continues to rise and possess explosion potential for new categories (such as lawn mowers, electric two-wheelers). Midea Group, Roborock, and Ninebot are considered quality targets that can traverse domestic cyclical fluctuations due to their global layout and diversified product matrix. Conversely, companies relying purely on domestic demand and lacking differentiated competitive advantages may face greater valuation downward risk.

Risks

• Weak global macro economy leads to appliance demand falling below expectations
• Rising raw material (copper, aluminum, etc.) costs erode profit margins
• Geopolitical tensions lead to increased tariffs or anti-dumping duties
• Further slowdown in domestic real estate market drags down related appliance demand
• Intensified industry competition, especially price wars in mid-to-low-end segments

What to watch

• Actual recovery situation after base effect eases for domestic appliance sales from late June to July
• Impact of signing of US-Iran Memorandum on overseas demand visibility
• Impact of major raw material price trends on gross margins
• Final sales data and pricing strategy changes for top brands during the latter stage of the 618 promotion