Orient Securities has released a research report stating that escalating geopolitical conflicts are increasing raw material costs and Europe route freight expenses for the home appliance industry. Major appliance groups with higher operational efficiency and more resilient global supply chains demonstrate stronger risk resistance. With AWE 2026 approaching, technological iterations in the TV industry warrant attention. The main views of Orient Securities are as follows:
Geopolitical tensions in the Middle East have intensified, leading to rising raw material and Europe route freight costs for the home appliance sector. On February 28, 2026, the United States and Israel launched military strikes against Iran, subsequently triggering large-scale retaliation from Iran and a sharp escalation of the situation in the Middle East. As a result, the Europe route container shipping index surged by 14% on the morning of March 2, causing a short-term spike in freight costs. The conflict has also driven up oil prices, with ICE Brent crude rising nearly 6% on March 2, directly increasing costs for plastics, packaging, and chemical raw materials.
Production schedule data for March 2026 for the three major appliance categories has been released. According to industry online data, total planned production for air conditioners, refrigerators, and washing machines in March is 39.11 million units, down 4% compared to actual production from the previous year. By product category, planned production for household air conditioners is 23.34 million units, a year-on-year decrease of 6.1%; refrigerator production is planned at 8.43 million units, up 1.6% year-on-year; and washing machine production is planned at 7.43 million units, down 3.4% year-on-year. The further narrowing of production plans for household air conditioners and washing machines in March is primarily due to three factors: demand being pulled forward by the timing of the Spring Festival, marginal weakening of subsidy policy effects, and channel destocking. It is expected that as base effects diminish and subsidy policies are sequentially renewed, production schedules may recover in the second quarter.
AWE 2026 is set to take place in Shanghai from March 12 to 15. As one of the world's top three consumer electronics and home appliance exhibitions, TV display technologies will be prominently featured to enhance influence. Hisense Vision is expected to highlight its new four-color RGB-MiniLED products, which add a fourth color chip to the traditional three-color system, significantly improving color gamut and color accuracy. TCL Electronics is anticipated to expand its technological coverage, becoming a brand that pursues both SQD-MiniLED and RGB-MiniLED technology routes. Skyworth announced a strategic partnership with Panasonic on February 23, whereby Skyworth will fully oversee the production, sales, marketing, and channel expansion of Panasonic brand TVs globally. It is possible that products featuring OLED technology may be showcased.
Investment recommendations and targets are as follows: Theme 1: Leading companies with higher operational efficiency demonstrate more stable performance during cost increase cycles. Combined with relatively high dividend yields, they can be considered as primary choices for stable allocation. Related targets: Haier Smart Home, Hisense Vision. Theme 2: Overseas expansion remains a long-term theme, with potential for valuation shifts in 2026. Related targets: Roborock, Leye Electrical. Theme 3: With AWE 2026 approaching, technological iterations in the TV industry deserve attention. Related target: TCL Electronics.
Risks include uncertainty regarding the continuity of trade-in subsidy policies, recurring tariff disruptions, and further cost increases due to escalating geopolitical conflicts.