According to Zhitong Finance APP, Guolian Minsheng Securities released a research report stating that air conditioner domestic sales grew double-digit in July while export sales remained weak, in line with market expectations. Driven by policies and high temperatures, domestic air conditioner sales volume for the 2025 cooling year increased 11% year-over-year to 110 million units, reaching a historical high. Over the past decade, industry prosperity periods included 2017 (real estate + hot summer) and 2023-2024 (post-pandemic recovery + policy support), with domestic sales declines exceeding 10% only occurring in 2015 (destocking) and 2020 (pandemic). Without inventory accumulation or demand shocks, base effects remain limited. The cooling year concluded with strong domestic sales performance. Despite ongoing uncertainties regarding overseas tariffs and geopolitical tensions, leading companies continue advancing production transfers, with long-term overseas expansion logic unchanged. Major white goods manufacturers maintain high quality and high dividend yields, deserving attention for investment value.

Guolian Minsheng Securities' main viewpoints are as follows:

Industry Online released July air conditioner production and sales data. Household air conditioner production reached 16.12 million units in the month, down 0.01% year-over-year, while sales totaled 16.44 million units, up 1.58% year-over-year. Domestic sales reached 10.58 million units, up 14.34% year-over-year, while exports totaled 5.85 million units, down 15.47% year-over-year. End-of-period inventory stood at 14.72 million units, down 7.47% year-over-year.

By company sales volume: Gree declined 4.05% year-over-year (domestic sales flat, exports down 15.00%); Midea fell 7.37% year-over-year (domestic sales up 1.69%, exports down 22.22%); Haier surged 27.59% year-over-year (domestic sales up 57.89%, exports down 30.00%); Hisense increased 19.58% year-over-year (domestic sales up 62.50%, exports down 11.93%); Changhong declined 15.91% year-over-year (domestic sales down 2.00%, exports down 34.21%); TCL remained flat year-over-year (domestic sales up 68.00%, exports down 14.78%).

**Domestic Sales Momentum Continues, Cooling Year Ends Prosperously**

July 2025 air conditioner domestic shipments maintained double-digit growth with stable month-over-month growth rates. Considering July 2024's 21% year-over-year domestic sales decline, excluding base effects, current month domestic sales showed approximately 3% CAGR compared to the same period in 2019. High temperatures during peak season drove March-July domestic sales volume to 4% CAGR compared to both 2019 and 2023, demonstrating stable trends. From the retail perspective, leading companies' installation cards continued rapid growth in July, with AVC monitoring showing air conditioner online/offline retail volume up 32%/37% year-over-year respectively, with retail outpacing shipments.

Looking ahead, August-December 2024 air conditioner domestic sales increased 13% year-over-year. Starting from September, higher base comparisons may weaken apparent growth rates. Historically, March-July domestic sales account for approximately 53% of annual volume over the past decade, with peak season performance providing positive guidance for annual growth.

**Downplaying Short-term Volatility, Leading Companies Show Stable Trends**

July air conditioner domestic sales for Midea/Gree/Haier increased 2%/remained flat/surged 58% year-over-year respectively, while Hisense/Changhong/Aux grew 63%/declined 2%/increased 53% respectively. Leading companies remained primarily stable, with Haier and Hisense performing well. Since May, Industry Online monitoring showed significant month-to-month volatility in leading companies' relative growth rates. Midea's domestic sales growth rates relative to the industry were +30/+10 percentage points in May/June respectively, with volatility possibly attributed to timing differences. The company's July installation cards grew 15% on a stable base, with terminal prosperity continuing. Midea's cumulative May-July domestic sales volume increased 24% year-over-year, compared to 15% for the industry during the same period, suggesting monthly data shouldn't be over-interpreted.

Among second-tier companies, Haier and Hisense accelerated month-over-month, while Changhong underperformed. July AVC monitoring showed Xiaomi air conditioner online retail volume up 5% year-over-year.

**Export Sales Remain Weak, Digesting Tariff Impact**

Monthly air conditioner export shipments declined 15% year-over-year, remaining stable month-over-month, with tariff impact continuing. On August 12, China and the US announced a continued 90-day suspension of implementing 24% additional tariffs, with future developments requiring ongoing monitoring. Given front-loaded shipment effects and high 2024H2 base comparisons, exports may converge toward historical averages after digesting short-term volatility.

During peak season prosperity, white goods underperformed the broader market from May-July 2025, with domestic and export policy expectation disruptions possibly fully priced in. Leading companies' emerging market layouts are advanced, with potentially limited tariff exposure. Overseas production transfers continue progressing, with the recovery phase potentially exceeding linear expectations.

July Midea/Gree exports declined 22%/15% year-over-year respectively, showing little difference from industry trends. Hisense/Haier/Changhong fell 12%/30%/34% respectively.

**Investment Recommendations**

The firm recommends Midea Group (000333.SZ), Haier Smart Home (600690.SH), Gree Electric (000651.SZ), and Hisense Home Appliances (000921.SZ).

**Risk Warnings**

Policy implementation falling short of expectations; raw material price and exchange rate volatility; tariff and external demand risks below expectations.