Goldman Sachs: Xiaomi Corporation-W enters the Chinese air conditioning market, Midea Group is expected to be the most resilient

Zhitong
2025.09.16 08:18
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Goldman Sachs released a research report stating that the Chinese air conditioning market remains attractive in multiple aspects: high market consolidation and leaders with high profitability, supply-demand balance, and core profitability strategies of leaders. The competition between Xiaomi Corporation and industry leaders is related to the overall efficiency of the industry value chain from supply chain, manufacturing to distribution network. The firm expects competition to strengthen industry efficiency and potentially narrow the profit pool. The firm maintains a "Buy" rating on Midea Group, Haier Smart Home, Hisense Home Appliances, and Xiaomi, while downgrading Gree Electric's rating from "Buy" to "Neutral," based on weakened demand and intensified competition leading to a deteriorating growth outlook, but forecasts a dividend yield of 7 cents to provide valuation support. The firm expects Midea to be the most resilient manufacturer, leveraging its globally leading production advantages and continuously improving distribution efficiency to potentially increase market share. Gree's profitability is expected to be the most affected among peers, considering the company's reliance on the Chinese market. The firm anticipates that Xiaomi will become a leading player in second-tier cities, with a mid-term market share expected to rise to about 10%, benefiting from its distribution network, product ecosystem, and improved production capacity. Further market share increases will depend on its strategies for mid-to-high-end products and offline channels

According to the Zhitong Finance APP, Goldman Sachs released a research report stating that the Chinese air conditioning market remains attractive in multiple aspects: high market consolidation and high profitability of leaders, supply-demand balance, and core profitability strategies of leaders. The competition between Xiaomi Corporation-W (01810) and industry leaders is related to the overall efficiency of the industry value chain from supply chain, manufacturing to distribution network. The bank expects competition to strengthen industry efficiency and potentially narrow the profit pool. The bank maintains a "Buy" rating on Midea Group (00300), Haier Smart Home (06690), Hisense Home Appliances (00921), and Xiaomi, while downgrading Gree Electric (000651.SZ) from "Buy" to "Neutral," based on weakened demand and intensified competition leading to a deteriorating growth outlook, but forecasts a dividend yield of 7% to provide valuation support.

The bank expects Midea to be the most resilient manufacturer, leveraging its globally leading production advantages and continuously improving distribution efficiency to potentially increase market share. Gree's profitability is expected to be the most affected among peers, considering the company's reliance on the Chinese market. The bank anticipates that Xiaomi will become a leading player in second-tier cities, with a mid-term market share expected to rise to around 10%, benefiting from its distribution network, product ecosystem, and improved production capacity. Further market share increases will depend on its strategy for mid-to-high-end products and offline channels

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