White goods 3Q26 Preview: Weak domestic growth against easier base a negative surprise, focus on overseas potential; Buy Midea

We revise down our 3Q26 revenue/net profit forecasts for coverage white goods companies by 3-11%/3-19% to incorporate weaker-than-expected domestic demand in 3Q that has also impaired our coverage companies' profitability, despite export resilience. We now expect weighted average yoy declines of -5%/-11% for revenue/net profits in 3Q26 (excluding one-off fair value gains, vs -1%/-8% yoy in 2Q26). Going into results, we expect investor focus to be centered around: 1) the domestic demand outlook in 4Q26 and onward, as well as initiatives to cope with weakened demand, 2) competition and pricing trends, 3) the overseas demand outlook and measures to further expand in overseas markets, 4) cost trends and measures to manage cost pressure, 5) new business line development, if any, and 6) potential shareholder return enhancement plans. AVC retail data in Sep showed a widening decline vs Aug despite a further easing base (AC down c.20% in Sep vs c.10% in Aug), a negative surprise. Proactive cha