Home appliance stocks in Hong Kong experienced a collective decline. At the time of writing, Hisense Home Appliances (00921) fell 5.96% to HKD 19.73, Haier Smart Home (06690) dropped 5.12% to HKD 20.76, Midea Group (00300) decreased 4.06% to HKD 78, and Skyworth Group (00751) was down 1.82% to HKD 6.47.

The decline follows the release of April production data for major white goods by industry tracker Industry Online. Total scheduled production for white goods in April reached 37.64 million units, a 3.6% decrease compared to actual production from the same period last year, with all three major categories facing pressure in domestic sales. Specifically, scheduled domestic production for household air conditioners was 12.7 million units, down 0.5% year-on-year; refrigerators were 3.41 million units, down 8.2%; and washing machines were 4.1 million units, down 2.4%.

According to Guojin Securities, the weakness in domestic sales is primarily due to diminishing effects of policy stimulus, sluggish end-user demand, and high channel inventory. Manufacturers are actively controlling production to manage risks. Furthermore, high and fluctuating raw material costs are further constraining companies' willingness to increase production.

Huachuang Securities previously noted in a report that raw material costs have a significant negative correlation with gross profit margins. However, leading white goods companies typically experience smaller fluctuations in their gross margins compared to other appliance manufacturers.