Founder Securities Co.,Ltd. has released a research report highlighting that the home appliance industry is seeing a trend where strong players grow stronger. Kitchen appliance leaders are benefiting from structural supply-side cleanup and policy-driven elimination of low-end capacity. These top companies are leveraging their production and distribution advantages to solidify market share while awaiting a demand recovery that could unlock earnings potential. Currently, the kitchen appliance sector's concentration ratio still lags behind that of white goods, offering significant room for market share expansion among leading players.

The key viewpoints from Founder Securities Co.,Ltd. are as follows:

Supply Side: Accelerated Cleanup, Sharp Rise in Concentration for Kitchen Appliance Leaders
Between 2020 and 2025, the offline sales CR2 for range hoods and gas stoves surged by 17.7 percentage points and 21.4 percentage points, respectively, while the CR5 increased by 14.3 percentage points and 16.7 percentage points. As of July 2026, the number of medium-sized and large kitchen appliance companies had fallen to just 90% and 86% of their peaks in 2023. The three-year elimination rate for newly established firms rose from 5.8% in 2013 to 8.8% in 2023. With the implementation of new national standards for gas stoves and range hoods in 2026, the elimination of low-end, marginal players is expected to accelerate further.

Demand Side: Industry Stabilizing at a Bottom, Major Renovation Cycle Approaching
In 2026, first-tier cities are witnessing an early recovery in both the volume and pricing of second-hand homes. Referring to a 12-year kitchen renovation cycle, the previous peak in commercial housing deliveries in 2013 (10.6 million units, up 15.1%) is expected to drive renovation demand in 2025 under the influence of national subsidies. A new wave of replacement demand is forecasted to begin around 2028. Can kitchen appliance leaders replicate the recent performance of consumer building materials? From Q4 2025 to Q1 2026, sectors like other decorative materials and other structural materials, which are primarily composed of consumer building materials stocks, rose by 12.2% and 23.3%, respectively.

Consumer building materials and kitchen appliances share several similarities: 1) Supply-side cleanup is underway, with a sharp decline in the number of producers. For instance, the number of plywood companies fell from 12,550 in 2021 to 5,010 in 2025, a drop of 60.1%. 2) After structural improvement, leading companies have shifted to stabilizing prices and protecting margins, implementing multiple collective price increases, with anti-internal competition becoming an industry consensus. 3) Valuations are at historic lows. As of July 20, the P/E ratios of 老板电器 and 华帝股份 were only 12.1 times and 13.7 times, respectively, placing them in the 7.7% and 29.4% percentiles of their ten-year valuation ranges. The average P/B ratio for kitchen appliances has already fallen below the pre-Q4 2025 rally level for consumer building materials. Companies like 日出东方, 万和电气, and 华帝股份 have P/B ratios approaching book value, making them value traps worth watching.

Risk Warnings
Risks include intensified market competition, demand falling short of expectations, rising raw material costs, and fluctuations in macroeconomic policies.