Orient Securities Company Limited has released a research report stating that the air conditioning compressor industry continued to face pressure in June, with high downstream finished goods inventory constraining upstream production scheduling. The new national standard for refrigerators has officially taken effect, and vacuum insulation panel (VIP) materials perfectly align with the dual requirements for energy efficiency and volume efficiency under the new standard, which is expected to accelerate their adoption rate. The long-term upgrade logic for refrigerator compressors remains unchanged. The main views of Orient Securities Company Limited are as follows:
Air Conditioning Compressors: Domestic Production Scheduling Remains Under Pressure, Downstream Inventory Reduction Weighs on Upstream Sentiment
In June, the air conditioning compressor industry continued to face a pressured environment, with high inventory levels of downstream finished goods restricting upstream production plans. According to industry data, the Chinese household air conditioning market is sluggish, with weakening volume and pricing; sales in April fell 9.2% year-over-year. Due to weak end-user demand and pressure from costs and distributor channel inventory, leading brands have scaled back production plans, with cumulative reductions exceeding 2 million units for June compared to earlier schedules, accelerating the industry's shift into a production control and inventory reduction cycle. Specifically, domestic production scheduling fell 23.3% year-over-year, while export scheduling fell 20.8%. The approaching 618 shopping festival has been unable to reverse this contraction trend, with simultaneous significant declines in both domestic and export scheduling highlighting the industry's pressure. Data for rotary compressors, a key component, reflects the industry's weakness. Industry data shows rotary compressor production in April was 26.998 million units, down 10.7% year-over-year, while sales were 28.747 million units, down 5.6% year-over-year. From a corporate perspective, most companies are adopting a conservative "produce-to-order" strategy considering raw material costs and demand. From a demand perspective, declining sales of downstream finished goods, market saturation, and uncertain overseas demand are dragging on market demand. Sales are expected to continue their downward trend, and the inflection point for industry recovery remains to be seen.
Refrigerator Compressors: New Energy Efficiency Standard Takes Effect in June, Upstream Demand Faces Temporary Disruption, But Long-Term Upgrade Logic Remains Intact
The finished refrigerator segment is significantly impacted by the implementation of the new energy efficiency standard. Industry data indicates total refrigerator production scheduling for June was 7.83 million units, representing a 4.0% year-over-year decline in actual performance. Domestic sales scheduling fell 13.6% year-over-year, mainly due to the new standard suppressing production pace and a weakening pull effect from replacement policies. Export resilience is relatively stronger, with export scheduling up 2.4% year-over-year. From the compressor perspective, the fully-enclosed piston compressor industry showed growth in Q1 2026, driven by European restocking demand, slight US tariff reductions, demand growth in emerging markets, and pre-production in response to rising raw material prices. Compressor production increased in Q1, with domestic sales volume up 4.1% year-over-year, and the export growth rate slightly exceeding domestic growth, with exports up 6.5% year-over-year. The global fully-enclosed piston compressor industry entered a period of structural adjustment in 2025, with production growing 1% to 340 million units, a significant slowdown compared to the 12% high growth in 2024. Industry forecasts anticipate a production decline in 2026. On the policy front, the new national standard GB 12021.2-2025 "Maximum allowable values of the energy consumption and energy efficiency grades for household refrigerators" officially took effect on June 1, 2026, raising the overall energy efficiency threshold by 30%-40% compared to the old version. The new standard incorporates "volume utilization rate" into the assessment system for the first time, requiring an increase in the refrigerator's effective internal volume without expanding its external dimensions. Under this standard, systemic technological breakthroughs are required in compressors, insulation materials, refrigeration systems, and control logic. This marks the refrigerator compressor industry's gradual transition from short-term production scheduling disruptions to a medium-to-long-term structural transformation driven by technological upgrades.
New Refrigerator Standard Implementation Expected to Accelerate VIP Adoption; Focus on Beneficiary Timing for Zaisheng Technology and Saite New Materials
With the new refrigerator energy efficiency standard officially effective from June 1, the resulting demand for material upgrades is accelerating. The new standard significantly tightens the energy consumption limits for each efficiency grade. Taking a 500-liter side-by-side refrigerator as an example, the daily energy consumption for a Grade 1 efficiency product has dropped from 0.92 kWh to 0.55 kWh, a reduction of 40%. Simultaneously, the new volume utilization rate requirement has been incorporated into the baseline energy consumption formula. In this context, VIP, due to its superior insulation performance, thinner profile, and better energy consumption reduction effects, perfectly aligns with the new standard's dual requirements for energy savings and volume efficiency. Current national subsidies focus on Grade 1 efficiency products, promoting the consumption of low-energy-consumption refrigerators, further strengthening downstream finished goods manufacturers' willingness to adopt VIP materials. Zaisheng Technology and Saite New Materials are leading domestic companies in the vacuum insulation panel industry. Under the new standard, the performance advantages of VIP materials are highly aligned with the new regulations. Their penetration rate in refrigerator production is expected to increase, and the timing of benefits for the industry chain is anticipated to gradually manifest in orders and financial performance in the second half of 2026.
Key Risk Factors
Risks include uncertainties regarding the continuity of replacement subsidy policies, fluctuations in raw material costs, and potential slower-than-expected implementation progress of the new national standard.