G Sachs Anticipates Continued High Base Pressure on CN Appliance Data in December, with Expected Improvement Next Year

The analyst rating from Goldman Sachs is based on the expectation that despite the current slowdown in China's appliance market, there may be improvement in 2026 due to the likely continuation of the consumer good trade-in policy. This outlook leads Goldman Sachs to maintain a bullish stance on MIDEA GROUP and HISENSE HA, both of which hold a Buy rating. The report highlights the challenges faced in November, including a significant year-over-year decline in retail sales and factory shipments, but suggests that the long-term prospects could be more favorable.

CMBI has issued an Equalweight rating for China's 2026 discretionary consumption sector due to a cautious outlook influenced by several headwinds. These include the retreat of national and delivery subsidies, a slowdown in export momentum, and job reductions linked to the widespread application of AI. While the broker anticipates overall retail sales growth to be around 3.5%, slightly slower than the previous year's 4%, they also recognize some positive factors such as the delayed Spring Festival, extended holidays, potential recovery in the real estate sector, and a thriving stock market. However, they expect stock prices in the discretionary consumption sector to face pressure in the first half of 2026, with a potential rebound in the second half. The report categorizes investment opportunities into different types of consumption, favoring survival, compensatory, and hedging/defensive consumption, while being less optimistic about large-scale consumption.