Home appliance stocks are maintaining their upward trajectory.

At the time of writing, shares of Midea Group (00300) have risen by 3.51% to HK$85.5. JS Global Life (01691) is up 3.03% at HK$1.36, while Haier SmartHome (06690) has gained 1.5%, trading at HK$20.28.

The sector's momentum is being driven by news of a severe heatwave sweeping across Europe, with many regions experiencing record-breaking temperatures. Analysis points out that historically, Europe's air conditioner penetration has been constrained by factors such as building regulations, labor costs, and electricity expenses.

Midea's launch of its PortaSplit portable split air conditioner, which has gained recognition from European consumers, is seen as demonstrating the competitive strength of Chinese white goods manufacturers. The expansion of Chinese white goods brands into overseas markets is still in its early stages, presenting significant growth potential.

In a research note, Citigroup stated that the increasing frequency of extreme heat events in Europe is acting as a structural driver, potentially initiating a multi-year cycle of rising air conditioner adoption. The bank noted that the current household air conditioner penetration rate in Europe is only about 20%, far below the approximately 90% seen in the United States and Japan.

Within the Chinese home appliance sector, Citigroup maintains its preference for Midea Group, followed by Haier SmartHome and Gree Electric Appliances.