Property headwinds weighed on second-quarter demand, with earnings forecasts for the three companies cut by 1% to 4%

Overview

The report updates operating and valuation views on Chinese property value chain companies in kitchen appliances, civil electrical products and home furnishings. Due to weak consumer sentiment, continued pressure in the property market, and preliminary results from custom furniture companies that were below expectations, Goldman Sachs believes related demand in 2Q 2026 was weaker than expected. As a result, it lowered 2026E-2028E earnings forecasts for Hangzhou Robam Appliances, Gongniu Group and Jason Furniture Hangzhou Co. by 1% to 4%, and adjusted target prices by 0% to 3%. Despite short-term fundamental pressure, the three companies' long-term investment theses, valuation methodologies and ratings were unchanged.

Core views

Hangzhou Robam Appliances, leveraging its leading position in the high-end range hood and gas stove markets, as well as its brand and channel capabilities, is expected to continue gaining share in categories such as dishwashers, built-in ovens and integrated stoves, and its valuation is below its average P/E over the past five years. Gongniu Group has significant share advantages in sockets and wall switches, with LED lighting and smart home as next-stage growth drivers, but its EV charging business depends on whether automakers separate sales of charging equipment, so risk-reward is relatively balanced. Jason Furniture Hangzhou Co. is the leader in China's traditional sofa market, with broad product and brand coverage, and is expected to continue outperforming the industry; however, domestic business will be affected by a high base and weak property market, and 2026E growth may slow.

Analysis framework

The report first adjusts 2026E-2028E earnings forecasts based on 2Q 2026 demand performance and preliminary results in the value chain, then uses an exit P/E methodology based on 2028E EPS to estimate 12-month target prices, discounted back to 2027E. Company assessments also incorporate market share, brand and channels, product expansion, domestic and overseas demand, competitive landscape and cost risks.

Methodology notes

• Earnings forecastsIncremental fundamental revisions

  Adjust forward EPS based on the latest demand and preliminary results

  Based on weaker-than-expected property value chain demand in 2Q 2026, Goldman Sachs lowered the three companies' 2026E-2028E earnings forecasts by 1% to 4%, but the original text did not provide detailed old and new EPS figures for each year.

• Valuation methodsExit P/E discounting methodology

  Apply a target P/E to 2028E EPS and discount to 2027E

  Hangzhou Robam Appliances uses a 14x exit P/E and a 9.5% cost of equity; Gongniu Group uses a 20x exit P/E and a 9.5% cost of equity; Jason Furniture Hangzhou Co. uses a 14x exit P/E and a 9.8% cost of equity.

• Multi-factor analysisGoldman Sachs factor profile

  Compare stocks across growth, financial returns and valuation multiple dimensions

  The growth dimension references forward sales, EBITDA and EPS growth; the financial return dimension references ROE, ROCE and CROCI; and the valuation dimension references P/E, P/B and enterprise value multiples, among others. The composite percentile is derived by averaging growth, financial return and inverse valuation percentiles. The report did not disclose the specific factor percentiles for the three companies.

Asset mapping & comparison

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

• Hangzhou Robam Appliances (002508.SZ)

  Directly covered kitchen appliance company

  Strengths

  It holds a dominant position in China's high-end range hood and gas stove markets, has strong brand, product and channel management capabilities, and is expanding into high-growth categories such as dishwashers, built-in ovens and integrated stoves; its current valuation is below its average P/E over the past five years.

  Weaknesses

  Core demand is related to the property cycle, an increase in the developer channel mix may dilute operating margin, and growth in new categories still depends on successful R&D and product launches.

  Comparison

  Compared with mass-market competitors such as Vatti and Supor, the company's high-end brand positioning is more prominent, but it faces stronger competition in lower-tier cities and online channels.

  Risks

  Intensifying competition in the mass market, developer channels dragging on margins, and failures in launching new products such as dishwashers, steam ovens and integrated range hoods.

• Gongniu Group (603195.SS)

  Directly covered civil electrical products and smart home company

  Strengths

  It has approximately 60% and 20% sales market shares in sockets and wall switches, respectively, with a leading position, relatively high ROE and the ability to extend into LED lighting and smart home.

  Weaknesses

  The potential of EV-related business depends on whether automakers split out charging equipment sales, and the upside of the target price relative to the current price is limited.

  Comparison

  Compared with single-category socket companies, the company has a more diversified product portfolio, but new growth businesses still need validation, leaving risk-reward relatively balanced.

  Risks

  Macro demand weaker than expected, intensified competition, channel expansion or new product launches falling short of expectations, and rising raw material costs.

• Jason Furniture Hangzhou Co. (603816.SS)

  Directly covered upholstered furniture company

  Strengths

  It ranks first in China's traditional sofa market, with brand and product coverage from high-end to mass market, relatively comprehensive categories and styles, and diversification advantages in domestic and overseas markets.

  Weaknesses

  Domestic business is weighed down by a high base and the property market, 2026E growth is expected to slow, and growth has become more dependent on the resilience of overseas markets.

  Comparison

  With a broader product portfolio and overseas presence, the company is expected to continue outperforming the industry, but short-term domestic demand pressure limits valuation upside.

  Risks

  Slower economic growth, integration of acquired companies falling short of expectations, product or channel expansion below expectations, rising raw material and transportation costs, and intensifying competition.

Key data

• Earnings forecast adjustment2026E-2028E lowered by 1% to 4%Covers Hangzhou Robam Appliances, Gongniu Group and Jason Furniture Hangzhou Co.
• Target price adjustmentLowered by 0% to 3%Investment theses, valuation methodologies and ratings remain unchanged.
• Hangzhou Robam Appliances target priceRmb19.512-month target price; 14x 2028E EPS exit P/E, discounted to 2027E at a 9.5% cost of equity.
• Gongniu Group target priceRmb4412-month target price; 20x 2028E EPS exit P/E, discounted to 2027E at a 9.5% cost of equity.
• Jason Furniture Hangzhou Co. target priceRmb3112-month target price; 14x 2028E EPS exit P/E, discounted to 2027E at a 9.8% cost of equity.
• Gongniu Group market shareApproximately 60% in sockets and approximately 20% in wall switchesBased on 2021 sales.
• Pricing date2026-08-04The report explicitly states that price data are as of this date.

Impact & implications

This adjustment indicates that the property downturn has continued to transmit to demand for kitchen appliances, furniture and home products, and short-term earnings expectations still face downward revision pressure. Because ratings and long-term theses are unchanged, investment differentiation mainly depends on whether companies can offset weak domestic property demand through market share gains, new category expansion and overseas growth. Based on the prices listed in the report, Hangzhou Robam Appliances and Jason Furniture Hangzhou Co. have higher target price upside, but realization requires property demand to stabilize and product expansion to meet expectations; Gongniu Group's target price upside is relatively limited, consistent with the Neutral view.

Risks

• Continued weakness in the property market further suppresses demand for kitchen appliances, furniture and home products.
• Consumer confidence recovers more slowly than expected, leading to further downward revisions to earnings forecasts.
• Intensified industry competition may weaken market share, revenue growth and margins.
• New product launches, category expansion or channel development fall short of expectations.
• Rising raw material and transportation costs erode corporate profitability.
• Jason Furniture Hangzhou Co.'s acquisition integration and overseas growth fall short of expectations.
• Target prices are based on assumptions for forward EPS, exit P/E and cost of equity, and changes in these parameters may significantly affect valuations.

What to watch

• Whether property sales, deliveries and home renovation demand stabilize in the second half of 2026.
• Differences between the three companies' subsequent official results and the revised-down 2026E-2028E earnings forecasts.
• Hangzhou Robam Appliances' new product performance and share gains in dishwashers, built-in ovens and integrated stoves.
• Progress in Gongniu Group's LED lighting, smart home and EV charging businesses.
• The extent of the slowdown in Jason Furniture Hangzhou Co.'s domestic business and whether overseas growth can provide an effective hedge.
• The impact of channel structure, raw material costs, transportation costs and industry promotional competition on margins.
• Whether target prices, ratings or valuation multiples are adjusted again after further changes in demand.