According to a strategic research report from GLMS SEC, the timing of the Spring Festival holiday contributed to steady overall growth in domestic and overseas sales in January. The combined market share of the top two domestic white goods manufacturers increased year-on-year, while online market shares for robotic vacuum cleaners from Roborock and Ecovacs saw an uptick. For the January-February cumulative period, based on February production schedules from industry data, the decline in air conditioner sales, both domestic and export, is expected to narrow. Retail sales trends for refrigerators and washing machines showed improvement compared to the fourth quarter of 2025, and average selling prices for color televisions maintained a steady increase. Looking ahead, the tone set by the recent government meetings emphasizes strong efforts to boost consumption. Subsidies for key product categories are expected to continue throughout the year, providing a floor for domestic sales volume and pricing, with potential for sequential quarterly improvement year-on-year. Improvements in export tariffs and interest rate environments overseas are likely to lead to a turning point for external demand ahead of domestic demand. Overall, the sector is expected to see a bottoming out and upward trend in both domestic and export sales by 2026. Leading companies demonstrate strong operational resilience, robust momentum in overseas brand expansion, and support from production capacity layouts in emerging markets, positioning them to potentially outperform the sector during periods of weak market beta. The sector's current relative valuation is at a historically low percentile. While expectations are gradually improving, fundamentals are still in a early stage, suggesting room for valuation upside. The bank forecasts that the fundamental trend for home appliances in 2026 will involve consolidation in domestic demand and a bottoming-out improvement in overseas demand, resulting in generally stable overall performance. As a transition year for national subsidy policies, significant fundamental elasticity may be difficult to anticipate. Despite generally modest fundamental elasticity, historical performance during similar phases has been relatively strong, characterized by 'fundamentals on the left side, expectations on the right side,' with dividend narratives providing stylistic support, as seen in 2019 and 2024. Market performance tends to concentrate at the beginning and end of the year. Therefore, the home appliance sector's performance in 2026 may be promising for two main reasons. First, fundamental expectations are poised to improve, supported by easing trade frictions, positive overseas interest rate cut expectations, potential positive surprises from the overseas expansion of appliance companies, and domestic demand drivers such as innovation and category expansion. Second, the sector exhibits elasticity after style rotations; its relative underperformance in the second half of 2025 has already exceeded the tech sector's run in the 2014 to first half of 2015 period. Current sector positioning appears adequately adjusted, and leading appliance companies show strong competitiveness in terms of dividend yield, valuation, and growth metrics. Regarding specific investment targets, recommendations are as follows: First, white goods leaders with outstanding cost-performance advantages such as Midea Group, Haier Smart Home, Hisense Home Appliances, and Gree Electric Appliances. Second, color TV leader Hisense Visual Technology, which boasts leading comprehensive strength and steadily increasing market share and profit margins; TCL Electronics is also worth attention. Third, cleaning appliance leaders Roborock and Ecovacs, which benefit from high growth momentum both domestically and internationally. Fourth, kitchen appliance leaders such as Robam, Supor, and Bear Electric Appliance, which are expanding their growth boundaries through product scenario extension and internationalization efforts.