Shopping for Better Growth Potential

Research evidence excerpt

Shopping for Better Growth Potential

IdeaMexpect more pressure on Gree's growth outlook, in particular with more aggressive

expansion from new entrants.

• Robam: Robam's focus is on major kitchen appliances, such as range-hoods and

dishwashers. Its corporate strategy with regard to expansion of its product

categories and innovation has been conservative. Hence, there is increasing risk in

the long run of losing market share to major appliance companies that offer

comprehensive product offerings and an AI ecosystem. Near term, the company is

still in the transition stage of moving from a focus on new home demand to

existing home demand (including replacement and secondary home purchases),

and is being dragged by the property down-cycle.

Small appliance and cleaning appliance companies

We prefer robotic cleaner companies over other small kitchen players. Low penetration

rate, shorter (than major appliances) product cycles are all favorable for AI technology

adoption and product development. Cleaning appliances companies will eventually

become humanoid solution providers and makers, but with much more stable cash flow

relative to pure-humanoid companies. We expect sales of cleaning appliances to see

inflection with positive YOY growth in 4Q26 on a normalized comp base as the effect of

trade-in subsidies fades.

• Ecovacs: Ecovacs's strategy of building a cleaning appliances ecosystem (floor

cleaning, window cleaning, swimming pool cleaning etc) supports market share

gains via cross-selling and consumer stickiness. It has investments in various

emerging technology companies, which could create synergies with robotic

cleaners product development, including embodied AI technologies. We expect the

RVC with roller mop function to become a mainstream product in the cleaning