Core Insights - The smart device industry is experiencing significant growth driven by increasing consumer demand and advancements in technology, with the market size in China projected to grow from 5,133 billion yuan in 2018 to 17,157 billion yuan by 2024, representing a compound annual growth rate (CAGR) of 22.28% [1][14][15] - The industry is categorized into three main segments: smart home, smart wearables, and smart mobility, each with distinct applications and market dynamics [3][16][17] Industry Overview - Smart devices integrate hardware, software, and internet technologies, enabling them to perform tasks such as data collection and self-optimization [1][14] - The market is expected to reach 20,979 billion yuan by 2025, indicating continued growth and innovation in the sector [1][14] Industry Development Stages - The smart device industry in China has evolved through three phases: the initial stage (1990s to early 2000s), the development stage (2000 to 2015), and the explosive growth stage (2015 to present), with significant technological advancements and market expansion occurring in the latter two phases [6][8] Industry Policies - The Chinese government has implemented various policies to support the smart device industry, including initiatives to promote digital transformation and the development of smart products across multiple sectors [8][9] Industry Value Chain - The smart device industry value chain consists of upstream raw materials, hardware, and software systems; midstream manufacturing; and downstream applications in sectors such as healthcare, education, and transportation [10][11] Market Segmentation - The smart home market is characterized by diverse competition among traditional appliance manufacturers and tech companies, with a focus on integrated solutions and consumer experience [15] - The smart wearable segment includes products like smart glasses and smartwatches, with significant growth potential driven by consumer acceptance and technological advancements [16][17] - The smart mobility sector, particularly smart cars, is rapidly expanding, with the market size projected to grow from 777 billion yuan in 2020 to 2,152 billion yuan by 2024, reflecting a CAGR of 29% [17][18] Competitive Landscape - The smart device industry is marked by an ecosystem of competition, with leading companies leveraging core technologies and brand advantages to create comprehensive solutions across various applications [18][19] Future Trends - The industry is expected to see innovations in human-computer interaction, moving towards more natural and multi-modal interfaces [21] - There will be a shift from single-product intelligence to integrated scene intelligence, enhancing cross-device collaboration and user experience [22] - Smart devices will increasingly focus on personalized health management, evolving into digital health assistants capable of providing tailored recommendations [24]

Market Performance - The small home appliance sector increased by 0.5% compared to the previous trading day, with Lek Electric leading the gains [1] - The Shanghai Composite Index closed at 4116.94, up 0.08%, while the Shenzhen Component Index closed at 14255.12, up 0.7% [1] Individual Stock Performance - Lek Electric (603355) closed at 36.60, up 4.30%, with a trading volume of 52,700 shares and a transaction value of 190 million [1] - Other notable performers include: - Fuhua Co. (603219) at 18.15, up 2.60% [1] - Hongzhi Technology (920926) at 17.98, up 1.87% [1] - Liren Technology (001259) at 32.41, up 1.34% [1] - Xiaoneng Electric (002959) at 45.18, up 1.21% [1] - Ecovacs (603486) at 83.39, up 1.01% [1] Capital Flow Analysis - The small home appliance sector experienced a net outflow of 29.33 million from institutional investors and 43.37 million from retail investors, while retail investors saw a net inflow of 72.71 million [2] - Notable capital flows for specific stocks include: - Stone Technology (688169) had a net inflow of 24.03 million from institutional investors [3] - Lek Electric (603355) saw a net inflow of 19.94 million from institutional investors [3] - Fuhua Co. (603219) had a net inflow of 11.04 million from institutional investors [3]

Group 1: AI Model Developments - DeepSeek's new model "MODEL1" is reported to be an efficient inference model with lower memory usage, suitable for edge devices and cost-sensitive scenarios, and optimized for long sequence tasks [1] - DeepSeek is expected to launch its next-generation flagship AI model, DeepSeek V4, during the Lunar New Year in mid-February, which is anticipated to significantly enhance code capabilities and potentially surpass leading products like GPT and Claude [1][2] Group 2: AI Industry Growth in China - China's intelligent computing power has reached 1590 EFLOPS, with a rapid emergence of high-quality industry data sets, positioning domestic large models to lead the global open-source ecosystem [3] - By 2025, the number of AI companies in China is projected to exceed 6000, with the core industry scale expected to surpass 1.2 trillion RMB [3] Group 3: AI Sector Investment Insights - The AI industry can be divided into three main segments: foundational layer (hardware computing power), technical layer (large models and algorithm frameworks), and application layer (vertical solutions across industries) [4] - The technical layer is expected to see significant demand and policy support, particularly in semiconductor fields, driven by capital expenditure from the foundational layer and domestic substitution strategies [5] Group 4: Market Performance and Trends - The AI application sector has become a primary focus for investment at the start of 2026, with a year-to-date increase of 19%, leading the A-share market [7] - The CES 2026 event provided insights into the future direction of AI applications, with hardware increasingly penetrating daily life through various forms, including smart glasses and wearable devices [7]

Market Overview - The small home appliance sector experienced a decline of 0.94% on January 20, with Lek Electric leading the drop [1] - The Shanghai Composite Index closed at 4113.65, down 0.01%, while the Shenzhen Component Index closed at 14155.63, down 0.97% [1] Stock Performance - Notable gainers in the small home appliance sector included: - Beiyikang (Code: 6610Z6) with a closing price of 46.45, up 4.74% and a trading volume of 34,000 shares, totaling 154 million yuan [1] - ST Dehao (Code: 002005) closed at 3.13, up 3.64% with a trading volume of 303,400 shares, totaling approximately 93.59 million yuan [1] - Major decliners included: - Lek Electric (Code: 603355) closed at 35.09, down 2.91% with a trading volume of 52,800 shares, totaling 186 million yuan [2] - Stone Technology (Code: 688169) closed at 152.33, down 2.60% with a trading volume of 52,700 shares, totaling 812 million yuan [2] Capital Flow - The small home appliance sector saw a net outflow of 140 million yuan from institutional investors, while retail investors experienced a net inflow of 56.31 million yuan [2] - Key stocks in terms of capital flow included: - Aikan Health (Code: 300272) with a net inflow of 17.69 million yuan from institutional investors, but a net outflow of 34.55 million yuan from retail investors [3] - Biyi Co. (Code: 603215) had a net inflow of 14.55 million yuan from institutional investors, with a net outflow of 29.66 million yuan from retail investors [3]

Core Viewpoint - Stone Technology is expected to maintain high growth in Q4 2025 despite intense competition and a high base, but profitability may be under pressure due to changes in product structure and global competition [1] Group 1: Company Performance - The company has established a leading position globally, which provides a foundation for expected performance elasticity [1] - Projected net profit attributable to the parent company for 2025, 2026, and 2027 is estimated to be 1.4 billion, 2.32 billion, and 3.27 billion yuan respectively [1] Group 2: Valuation Metrics - The corresponding price-to-earnings (PE) ratios for the company based on the closing price on January 19, 2026, are projected to be 29, 17, and 12 times for the years 2025, 2026, and 2027 respectively [1] Group 3: Strategic Focus - The company is advised to focus on subsequent product layout and cost reduction and efficiency improvement pace [1] - New product categories, such as lawn mowers, are expected to contribute incremental growth [1]

Core Viewpoint - Stone Technology's stock has experienced a decline in recent trading sessions, with a current market capitalization of 39.708 billion yuan and a year-to-date price increase of only 0.78% [1] Group 1: Stock Performance - On January 20, Stone Technology's stock fell by 2.01%, trading at 153.25 yuan per share with a turnover of 493 million yuan and a turnover rate of 1.23% [1] - The stock has seen a decline of 3.33% over the past five trading days, 2.53% over the past 20 days, and 17.78% over the past 60 days [1] Group 2: Financial Performance - For the period from January to September 2025, Stone Technology reported a revenue of 12.066 billion yuan, representing a year-on-year growth of 72.22%, while the net profit attributable to shareholders decreased by 29.51% to 1.038 billion yuan [2] Group 3: Shareholder Information - As of September 30, 2025, the number of shareholders for Stone Technology was 15,900, a decrease of 8.77% from the previous period, with an average of 16,251 circulating shares per shareholder, an increase of 9.76% [2] - The company has distributed a total of 1.463 billion yuan in dividends since its A-share listing, with 1.052 billion yuan distributed over the past three years [3] Group 4: Institutional Holdings - As of September 30, 2025, Hong Kong Central Clearing Limited was the second-largest circulating shareholder, holding 14.5491 million shares, an increase of 4.4262 million shares from the previous period [3] - The top ten circulating shareholders include various ETFs, with notable changes in holdings among them, such as a decrease in shares held by E Fund's ETFs and an increase in shares held by Huatai-PineBridge's ETF [3]

Investment Rating - The report maintains a "Buy" rating for the consumer discretionary sector, highlighting structural investment opportunities [5][10]. Core Insights - The report indicates that in December, the total retail sales of consumer goods increased by 0.9% year-on-year to 4.5 trillion yuan, with a month-on-month decline of 0.4 percentage points, primarily due to high base effects from durable goods like automobiles and home appliances [7][9]. - The report emphasizes the importance of the new round of trade-in policies for 2026, which focus on core home appliance categories and expand into new categories like smart glasses and products for the elderly, supporting demand in these segments [7]. - The report suggests that consumer sentiment remains strong, particularly in sectors like emotional consumption, technology consumption, and undervalued high-dividend stocks, recommending a focus on domestic brands and global brand expansion [10]. Summary by Sections Retail Sales Performance - In December, retail sales of food and beverages grew by 2.2% and 0.7% respectively, with urban and rural retail sales increasing by 0.7% and 1.7% year-on-year [8]. - Online retail sales of physical goods in December increased by 0.8% year-on-year, with a total annual growth of 5.2%, accounting for 26.1% of total retail sales [8]. Consumer Categories - The report notes a structural differentiation in consumer categories, with home appliances, building materials, and furniture experiencing declines of 18.7%, 11.8%, and 2.2% respectively due to high base effects and trade-in policy impacts [9]. - Conversely, communication equipment saw a significant increase of 20.9% year-on-year, while emotional and self-care products like sports and entertainment goods and cosmetics grew by 9.0% and 8.8% respectively [9]. Investment Recommendations - The report identifies four main investment themes: 1. Rise of domestic brands and global brand expansion, recommending companies like Pop Mart, Shangmei, and Anta Sports [10]. 2. Technology consumption empowered by AI, recommending companies like Midea Group and Haier Smart Home [10]. 3. Emotional consumption, recommending companies like Gu Ming and Yum China [10]. 4. Undervalued high-dividend blue-chip leaders, recommending companies like Li Ning and Shenzhou International [10]. Company-Specific Insights - For Smoore International (6969 HK), the report forecasts a revenue of 10.21 billion yuan for Q1-3 2025, with a year-on-year growth of 21.8%, and maintains a "Buy" rating with a target price of 27.00 HKD [48]. - For Juzhibio (2367 HK), the report highlights the approval of a new collagen product, projecting significant sales potential and maintaining a "Buy" rating with a target price of 85.00 HKD [49]. - For Pop Mart (9992 HK), the report notes a revenue increase of 245-250% in Q3 2025, driven by strong performance in both domestic and international markets, maintaining a "Buy" rating with an updated target price of 410 HKD [51].

Investment Rating - The report maintains an "Outperform the Market" rating for the home appliance industry [5][6][12]. Core Views - The home appliance sector is expected to recover in 2026, driven by the continuation of national subsidies and stabilization of exports, suggesting a positive outlook for leading white goods companies [1][12][18]. - December retail performance for home appliances showed signs of bottoming out, with significant declines in major appliances but a relatively stable performance in small appliances [1][19]. - The report highlights the resilience of leading companies in the home appliance sector, with a focus on white goods, which are expected to maintain steady growth despite high base effects [12][13]. Summary by Sections 1. Key Recommendations - Recommended companies include Midea Group, Haier Smart Home, TCL Smart Home, Gree Electric Appliances, and Hisense Home Appliances for white goods; Hisense Visual for black goods; and Roborock, Bear Electric, and Ecovacs for small appliances [4][12][13]. 2. December Retail Performance - In December, the retail sales of major appliances saw declines exceeding 20%, while small appliances showed slightly better demand, with air fryers experiencing growth [1][19]. - The offline sales channels for major appliances faced declines of over 40%, while kitchen small appliances remained relatively stable [1][19]. 3. Export Performance - In December, China's home appliance exports decreased by 8.1% year-on-year, with air conditioners facing a significant decline of 20.7% [2][37]. - Other categories like refrigerators and washing machines showed modest growth, indicating a mixed performance across different product lines [2][37]. 4. U.S. Market Insights - U.S. retail sales for home appliances showed a slight increase of 0.8% in November, indicating a gradual return to stable growth despite challenges such as tariffs and inflation [3][43]. - The inventory levels in U.S. appliance stores are returning to normal, suggesting improved market conditions [3][43]. 5. Company Earnings Forecasts - The report provides earnings forecasts for key companies, indicating expected EPS growth for Midea Group, Gree Electric Appliances, and Haier Smart Home, among others, with all rated as "Outperform the Market" [5][76].

Core Viewpoint - Beijing Stone Technology Co., Ltd. has successfully completed the overseas issuance and listing filing process, planning to issue no more than 33.108 million overseas ordinary shares, targeting the Hong Kong Stock Exchange as part of its "A+H" dual listing strategy [1] Group 1: Company Overview - Stone Technology is a leader in the global robotic vacuum cleaner market, holding a 21.7% market share as of the first three quarters of 2025 [3] - The company has achieved significant overseas expansion, with a 40% market share on Amazon in the U.S., a 42% overall market share in Europe, and a 500% sales surge for a single product in Japan during the promotional season [3] - As of June 2025, Stone Technology has established a sales network covering 170 countries and regions, serving over 20 million households, with overseas revenue accounting for 53.6% of total revenue [3] Group 2: Financial Performance - For the reporting period, the company's operating revenue reached 4.163 billion, a year-on-year increase of 60.71%, while the total profit decreased by 4.91% to 371 million [4] - The net profit attributable to shareholders was 360 million, reflecting a 2.51% increase, but the net profit after deducting non-recurring gains and losses saw a 3.05% increase to 334 million [4] - The company reported a negative net cash flow from operating activities of -1.059 billion, marking a significant decline compared to the previous year [4] Group 3: Strategic Initiatives - The chairman stated that the overseas listing aims to establish an international capital platform to attract long-term international funds and optimize the shareholder structure [4] - The planned fundraising will focus on international market expansion, core technology research and development, and operational capital supplementation to align with the company's expansion needs [4] - Stone Technology is awaiting final approval from the Hong Kong Securities and Futures Commission and the Hong Kong Stock Exchange, with the specific listing time depending on market conditions [5]

Investment Rating - The industry investment rating is "Overweight" [4][11]. Core Insights - The report highlights favorable real estate policies and Meta's plan to increase smart glasses production to 20 million units by the end of 2026, indicating a strong market demand [2][3]. - Several home appliance companies have released their performance forecasts for 2025, showing a mix of growth and decline in net profits [2][3]. Summary by Sections Investment Recommendations - The report suggests that national subsidies are expected to transition smoothly, with leading black and white appliance companies demonstrating stable operations and high dividends, making them cost-effective investments. Recommended companies include: - Midea Group (2025 PE: 13.2X) - Haier Smart Home (2025 PE: 11.4X) - TCL Electronics (2025 PE: 10.8X) - Hisense Visual (2025 PE: 12.0X) [4][5]. - The core driver for smart home appliances is overseas expansion, with recommendations for leading robot vacuum companies: - Roborock (2025 PE: 20.8X) - Ecovacs (2025 PE: 22.7X) [4][5]. - Companies with stable performance and upward potential include: - Ninebot (2025 PE: 19.1X) - Anfu Technology (2025 PE: 53.2X) - Hailong Cold Chain (2025 PE: 15.2X) - Beiding Co. (2025 PE: 31.2X) [4][5]. - Appliance companies are diversifying into new areas, with recommendations for: - Rongtai Health (2025 PE: 21.1X) - Wanlong Magnetic Plastic (2025 PE: 21.9X) [4][5]. Performance Forecasts - Stone Technology expects a net profit of no less than 1.34 billion, a 31% decline year-on-year for 2025. - Beiding Co. anticipates a revenue of 950 million, a 26% increase year-on-year, with a net profit of 111 million, up 59.1% year-on-year. - Dechang Co. forecasts a net profit between 160 to 200 million, a decline of 51% to 61% year-on-year, with a non-recurring net profit forecasted between 145 to 185 million, down 53% to 63% year-on-year [2][4].