Text by | Tanglang Observation

Author | Yu Yi

How hot is the A-share market this year? Recently, the Shanghai Stock Exchange disclosed the latest data on new A-share accounts. As of the end of May, the cumulative number of new A-share accounts since 2026 has reached 17.2968 million, a year-on-year increase of 57.94%.

This means that a large amount of new capital is looking for suitable investment directions. For investors, white horse stocks with solid fundamentals and sustained cash inflow capabilities are suitable for long-term tracking. The three major giants in the home appliance industry—Midea Group, Gree Electric Appliances, and Haier Smart Home—fall into this category of foundational assets.

However, when faced with these three options, each with its own strengths, how should one allocate? To sum up, in the short term, Midea Group still benefits from efficiency dividends, Gree Electric Appliances stands out with its high dividends for defensive value, and when it comes to the ability to navigate through cycles, Haier Smart Home's long-termism may be the best choice.

Two Major Incremental Spaces: Long-term Potential for Home Appliance Leaders

Why are home appliance leaders worth investing in? The answer lies in the two major incremental spaces they face.

The first is the growth potential of Chinese home appliance companies in the global market. According to research by Changjiang Securities, the annual sales volumes of air conditioners, refrigerators, and washing machines globally are expected to increase by 177%, 40%, and 52% respectively compared to 2024. In 2025, China's home appliance exports to emerging markets are expected to increase by 8 percentage points year-on-year. With the deepening of trade under the "Belt and Road" initiative, the proportion of overseas revenue for leading companies is expected to continue to rise, becoming one of the most certain growth engines.

The second is the domestic high-end and smart market. According to data from the "2025 China High-end Home Appliance Market Trends and Innovation Insights," from January to September 2025, the growth rate of retail sales of high-end home appliances reached 12.3%, significantly higher than the overall market. In terms of smart homes, it is expected that the Chinese market will exceed RMB 800 billion in 2026, with a current penetration rate of only 23%, far lower than the over 45% in the UK and the US, indicating vast development potential.

Overall, overseas growth and high-end smart markets constitute the dual drivers for home appliance leaders in the next 5-10 years.

Efficiency, Dividends, and Long-term Vision: Each Giant Has Its Own Strategy

With such clear growth logic, how should one choose among the three giants? Midea Group, Gree Electric Appliances, and Haier Smart Home have each taken efficiency, dividends, and long-term strategic layout (layout) as their core focus, forging unique value paths.

Midea Group's efficiency story can be traced back to 2012 when it proposed the core strategy of "efficiency-driven," which remains one of its four main business axes today. For Midea, efficiency is not just a slogan. Despite a late start in layout (laying out) the high-end brand COLMO, Midea, together with Toshiba, has now achieved retail sales exceeding RMB 17 billion; its transition to own-brand products overseas has also quickly surpassed 45%. Meanwhile, its TOB business has become a new growth pole, with annual revenue reaching RMB 122.8 billion, a year-on-year increase of 17.5%.

Although Gree Electric Appliances has experienced some fluctuations in revenue and profit, its total dividends for the whole year of 2025 reached RMB 22.341 billion, accounting for 100% of the total profit distribution. Additionally, since 2020, it has repurchased and canceled 6.89% of its shares with a cumulative amount of RMB 30 billion, demonstrating its commitment to shareholder returns. Currently, Gree's price-to-earnings ratio is only about 6-7 times, making it an undervalued player in the home appliance industry.

Haier Smart Home's high growth rate, driven by its long-term strategic layout (layout), is mainly reflected in its compound annual profit growth rate of 17.11% over the past five years, the highest among the three major companies. Its three main drivers of long-term development are: first, the results of its global brand creation. Haier Smart Home is one of the earliest Chinese companies to venture overseas for brand creation, with overseas revenue now accounting for over 51%; second, its high-end layout (layout). Casarte has reshaped the industry rules for domestic high-end home appliances in 20 years and has maintained its leading position in the high-end market for 10 consecutive years; third, its smartization. As the earliest Chinese company to explore smart homes, Haier Smart Home has now been certified by Euromonitor International as the "No. 1 Company in Global Smart Home Sales."

Of course, the three giants are not without their shortcomings. For example, Midea Group is continuously expanding in the global market and may face adjustments due to external factors such as overseas trade protectionism; Gree Electric Appliances struggles with a single revenue structure; and Haier Smart Home faces short-term performance pressures due to factors such as high overseas tariffs and exchange rate fluctuations. However, these shortcomings are more like phased (phased) challenges or structural issues that can be improved, and the core competitiveness and long-term value of these three companies remain intact.

Summary

The global expansion and high-end smartization of the home appliance industry provide fertile ground for long-term growth for these three leading companies. Gree Electric Appliances is generous with dividends; Midea Group stands out with its efficiency, offering valuable management experience; and Haier Smart Home adheres to a long-term vision of global brand creation, providing a model for Chinese companies.

*All images in this article are sourced from the internet.