Rating: Stronger than the market (maintained)

Over the past ten years, China's home appliance industry has made great progress. In terms of sales volume, domestic core home appliances have won mainstream recognition and met the demand for functional consumption. On the brand side, premium products continue to emerge and perform well. In the global market, appliance companies have evolved from learners to leaders. We have seen a strong global expansion of domestic appliances, with major categories ranking at the top of Amazon's sales rankings. However, as the growth rate of the domestic appliance market gradually slows down, we expect to see improvements in quality rather than volume growth. We believe the drivers of demand are: 1) personal consumption levels have increased as consumers increasingly seek quality of life; 2) as housework time decreases, people increasingly need help from smart products; and 3) demographic changes: the safety and convenience of household appliances has become necessary, the elderly and children often stay at home, while breadwinners work outside the home.

Smart home devices will usher in a boom

A smart home requires the entire home to be intelligent. In 2020, China's smart home device market was RMB 435.4 billion, with a compound annual growth rate of 20% over the past four years. We expect that by 2050, the market size will exceed 800 billion yuan, of which smart home appliances will account for the largest share, at 282.2 billion yuan. In 2020, the smart home market saw the functionality of different device scenarios, mainly due to improvements in comparability, AIOT, wireless communication technology, and cost reductions. Aftermarket, open source ecosystem cooperation, and technology enablement models are key areas for future development.

The next decade: the Internet of Things opens a new era of smart home appliances

WE SEE TWO MAJOR DIRECTIONS THAT THE SMART HOME MARKET COULD GROW: 1) SUPERIOR PRICE AUTOMOUS BASED ON PRODUCT INTELLIGENT; and 2) SUPERIOR LOW-FREQUENCY HOME APPLIANCE Frequency Interests Ones via Supply Chain Collaborations.

Our view

Smart home appliance trends are one of the keys ones to watch, as it moves from sales volume growth to quality improvements. We Are Facing About Smart Home Appliance Development for the Long Term. We believe that catalysts such as software and hardware challenges, cost savings and strong demand will drive smart home appliance growth. Rising appliances of home appliances and supply chain synergy would ensure the passage of this new era for the home appliance industry.

Falling below: Consumer demand falling below; IOT falling below falling; high falling in raw material falling; and smart home appliance falling below falling Below is a must.

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