Summary of Key Points
In the first half of 2026, three major home appliance companies—Haier Smart Home, Supor, and Boss Electric—all experienced a decline in both revenue and profit, primarily due to factors such as weak domestic consumption, overseas geopolitical conflicts, high raw material prices, and the appreciation of the RMB. The companies have tried to reduce costs and increase efficiency by streamlining their structures. Although there is still long-term demand in the industry, future growth opportunities may lie in the adoption of AI technology and the home appliance replacement cycle.
Why Is the Industry Facing Such Challenges?
The home appliance industry has had a difficult time this year, with several factors combining to create significant pressure:
- Domestic Market: The impact of policy changes has faded, and consumer willingness to buy has decreased. The previous trade-in programs have been largely utilized, and sales were particularly strong last year, making this year's figures look worse in comparison. Additionally, consumers have less disposable income, leading to a 9.9% year-on-year decline in retail sales across all categories, with the second quarter seeing a more severe drop (12.4%).
- Overseas Market: Geopolitical conflicts and currency appreciation have hindered sales in certain regions. The appreciation of the RMB has reduced the amount of revenue companies earn in local currencies, with Haier incurring a exchange loss of 700 million yuan in the first half of the year, compared to a profit of 880 million yuan last year.
- Costs: The prices of raw materials, such as copper and plastic, which are essential for manufacturing home appliances, have remained high, preventing companies from reducing their production costs.
Differences in Company Performance
Despite the overall decline, the three companies have varying situations:
- Haier Smart Home (leader in white goods): Overall performance was stable, with strong performance in overseas markets. Revenue decreased by only 2.8%, and the profit decline of 14% was mainly due to exchange losses (which decreased when excluding these factors). Highlights include growth in its European HVAC business, a 17% increase in revenue in South Asia, and double-digit growth in Southeast Asia. Domestic sales of major heating products also increased by 6.1%, although revenue from refrigerators and washing machines declined.
- Supor (kitchen appliances): Domestic sales were relatively stable, but exports performed poorly. Revenue decreased by 0.59%, and the domestic business even grew by 1.39%. However, exports fell by 4.72%. Profit declined by 7.7% due to poor performance in exports and higher raw material costs, as well as lower interest income from bank deposits.
- Boss Electric (kitchen appliances): This company faced the greatest challenges, with negative cash flow. Revenue dropped by 13.8%, and profit decreased by 18.8%. The operating cash flow was negative by 360 million yuan, indicating that the company did not earn enough from sales to cover its expenses. The main reasons for this were the reduction in government subsidies and the decline in the real estate market, which reduced demand for kitchen appliances. To stabilize investor confidence, the company distributed dividends of 5 yuan per 10 shares.
Corporate Measures to Cope with Challenges
To address these difficulties, the companies have taken the following steps:
- Haier Smart Home: The company merged related businesses and reorganized its management, combining refrigerator and washing machine operations into a single "major white goods division" and making changes to its executive team to improve efficiency.
- Supor: It acquired its wholly-owned subsidiary, Zhejiang Supor Rubber Products Co., Ltd., to streamline management and reduce costs.
- Boss Electric: Despite tight cash flow, the company still distributed dividends of 472 million yuan to demonstrate its financial strength.
Future Opportunities
Industry experts believe that while the short term is challenging, there are long-term prospects:
- Mismatch between Supply and Demand: Consumers are seeking more advanced and lifestyle-oriented home appliances, but the market has not yet provided these products. AI technology can be used to create more valuable products, such as smart thermostats and recipe-recommending ovens, rather than focusing on price competition.
- The Replacement Cycle is Approaching: Around 2029-2030, many households will need to replace their old appliances. Companies can focus on nine key areas, such as air purification, sleep assistance, and household cleaning, to shift from competing for existing demand to creating new value through collaboration with home improvement companies and real estate developers.
- AI as a Driver of Innovation: By utilizing AI, companies can develop more innovative products that meet consumer needs and differentiate themselves from competitors.
In summary, the home appliance industry is currently experiencing short-term difficulties, but there is potential for long-term growth. Companies that can adapt to changing consumer demands and innovate through technology and new business models will be able to overcome these challenges.