Guolian Minsheng Securities: Household air conditioning sales both domestically and internationally weakened in September, pay attention to the company's operational aspects α

According to the Zhitong Finance APP, Guolian Minsheng Securities released a research report stating that due to base and policy impacts, the domestic and foreign sales of household air conditioners weakened in September. The performance of domestic sales leaders varied, with rhythm possibly being the main reason. Haier showed strong growth against the trend, and its alpha is worth paying attention to; export orders and production guidance are relatively positive, but the tariff negotiation process has faced many twists and turns. Short-term data may still be bottoming out, and leading companies are expanding strongly in emerging markets, with overseas production transfer continuing to advance. The recovery phase is expected to be better than linear industry expectations. Since Q3 2025, the white goods sector has performed weakly, and the current relative valuation has fallen to historical lows, indicating that the short-term pressure on domestic and foreign sales may have been fully priced in.

The main points of Guolian Minsheng Securities are as follows:

Industry Online released September air conditioner production and sales data

In September, the production of household air conditioners was 10.57 million units, down 13.48% year-on-year, and sales were 10.88 million units, down 10.24% year-on-year. Among them, domestic sales were 5.95 million units, down 2.52% year-on-year, and exports were 4.94 million units, down 18.06% year-on-year. The ending inventory was 14.26 million units, down 2.36% year-on-year. By manufacturer sales, GREE's sales were flat year-on-year (domestic sales +12.50%, exports -20.00%); Midea down 18.18% year-on-year (domestic sales -15.00%, exports -21.62%); Haier up 12.50% year-on-year (domestic sales +25.00%, exports -12.50%); Hisense down 13.95% year-on-year (domestic sales +3.03%, exports -24.53%); TCL down 15.53% year-on-year (domestic sales -35.00%, exports -10.84%).

Simultaneously, the base has risen, and domestic sales shipments are weakening

In September, domestic air conditioner shipments were down 3% year-on-year, with the base rising, which is in line with expectations. The local guidelines for replacing old with new in 2024 Q3 will be implemented, leading to a higher base driven by policy, with apparent deceleration. However, excluding the base, domestic sales in August and September were roughly flat compared to the same period in 2023/2019. In September, the online/offline retail volume of Aowei grew at a CAGR of +31%/+1% over two years, and the installation card of leading companies continued the trend from August, with stable domestic demand in the off-season. Looking ahead, Q4 2024 may be the peak of this policy pulse, with domestic sales shipments expected to increase by 24% year-on-year to a new high. The growth rate decline may be within market expectations, and the sector's Q3 performance expectations are stable, with the current relative valuation at historical lows, focusing on the resilience of leading companies' operations and their alpha in market share.

Diminishing rhythm fluctuations, focusing on operational alpha

In September, the domestic sales of Midea/GREE/Haier air conditioners were down 15%/+13%/+25% year-on-year, while Hisense/Aux were up +3%/+28%, with continued differentiation among leaders. Haier showed strong growth against the trend, while GREE's base was relatively low, accelerating month-on-month. The policy initiation window and the impact of summer breaks in the off-season production phase may not require excessive interpretation of monthly data fluctuations for manufacturers. In Q3 2025, Haier's domestic sales were up 37% year-on-year, with market share increasing by 3.7 percentage points year-on-year, and Q1/Q2 increasing by 0.1/0.7 percentage points year-on-year, making its alpha worth paying attention to. In September, Aowei monitored that the online/offline retail average prices of air conditioners were up 0.4%/-7.5% year-on-year, with volume growth under pressure leading to weak price performance; Midea's installation card decline may be in single digits, better than shipments, while Haier continued to grow rapidly Tariff fluctuations, short-term bottoming out of exports

In the current month, the export shipment volume of air conditioners decreased by 18% year-on-year and fell compared to the previous month, still in the process of bottoming out. Leading export orders may show improvement, with industry online data indicating a year-on-year decrease of 9.4%/-6.6% in air conditioner export production scheduling for October/November, with expectations for November being adjusted upward. If subsequent tariffs do not exceed expectations, there may still be marginal improvement in Q4. Since the mid-October rare earth export controls, trade negotiations have faced many setbacks, and the evolution still needs to be tracked; considering a year-on-year increase of 49% in air conditioner exports in Q4 2024, and the weakening of orders in Q2 2025, the export growth rate is expected to gradually converge towards the mid-single-digit center after digesting the base and policy pressures; leading white goods companies are expanding strongly in emerging markets, and the ongoing overseas production transfer is expected to perform better than linear expectations during the recovery phase.

On the targets

Reviewing the industry cycle, leading companies show resilience, maintaining high quality & high dividend attributes. We continue to recommend Haier Smart Home (600690.SH), Midea Group (000333.SZ), Hisense H.A. (000921.SZ), and GREE (000651.SZ).

Risk warning

Policy implementation may fall short of expectations; fluctuations in raw material prices and exchange rates; risks of tariffs and external demand falling short of expectations