Goldman Sachs expects that the mainland's December home appliance data will continue to face high base pressure, with improvement expected next year

Goldman Sachs released a report indicating that the appliance data in mainland China for November further slowed down, with both retail sales and factory shipment growth falling below previous expectations. The National Bureau of Statistics reported that the year-on-year decline in retail sales of appliances and electronic products expanded to 19% (compared to a 15% decline in October), seemingly affected by the early launch of "Double 11" and a high base effect; the year-on-year decline in domestic factory shipments of air conditioners also widened to -40%.

Looking ahead, the bank expects to continue facing growth pressure from the high base effect in December but anticipates improvement in 2026, as the policy of replacing old consumer goods with new ones is likely to continue.

Goldman Sachs remains optimistic about Midea Group (00300.HK), which has a "Buy" rating, due to its diversified revenue growth drivers, including domestic/overseas appliances/HVAC and the rapidly growing B2B business, its strong position in the industrial value chain, and the leading profitability that comes with it, as well as shareholder returns that outperform the market.

Goldman Sachs is also optimistic about Hisense H.A. (00921.HK), which has a "Buy" rating, due to its growth potential from increasing brand share in overseas markets and the potential for margin expansion in the medium to long term.

Goldman Sachs' investment ratings and target prices for appliances are listed as follows:

Stock | Investment Rating | Target Price (HKD)

Midea Group (00300.HK) | Buy | 103

Haier Smart Home (06690.HK) | Buy | 32

Hisense H.A. (00921.HK) | Buy | 27