A comprehensive policy package to stimulate smart home consumption is set to reshape the sector's growth trajectory. On September 14, eight government departments including the Ministry of Commerce jointly issued the Action Plan for Promoting Smart Home Consumption, which outlines measures across seven key areas: expanding the supply of quality smart home products, refining the smart home standards system, supporting smart home spending, developing elderly-friendly smart home solutions, streamlining the recycling service chain, optimizing community convenience services, and increasing fiscal and financial support. Notably, the policy authorizes local governments to determine product subsidy categories and standards based on regional conditions, while coordinating support for whole-home smart purchases and encouraging financial institutions to expand consumer loan support for smart home spending.
Industry analysts point out that this policy is not simply targeting a single category of home appliances but is designed to push smart home consumption upgrades across the entire chain from products to households, communities, services, and recycling. With AI, the Internet of Things (IoT), and home service robots penetrating deeper into daily life, smart homes are evolving from the early stage of individual device connectivity and remote control toward whole-home intelligence, proactive services, and AI-agent-driven smart living. The policy's reinforcement of subsidies, standards, application scenarios, and financial support is expected to accelerate the transition of smart homes from optional consumption to a core driver of household spending upgrades.
Looking at the specifics of the action plan, the government's support for the smart home industry demonstrates strong systemic coordination. On the supply side, the policy encourages manufacturers to intensify R&D in smart home products and supports home furnishing malls and shopping centers in establishing smart home experience centers, whole-home intelligence showrooms, and digital home model units. In parallel, it calls for faster cultivation of large-scale home renovation companies and platforms to offer personalized and diversified renovation packages, while vigorously developing customized, order-based, and appointment-based services. This signals that smart home consumption models are likely to shift further from single-product purchases toward integrated solutions. Previously, consumers buying smart TVs, smart refrigerators, smart air conditioners, or robot vacuums often made separate decisions, with potential ecosystem barriers between different brands. As the whole-home intelligence concept matures, what consumers purchase is expanding from an individual appliance to a complete home intelligence solution encompassing lighting, air conditioning, door locks, curtains, security, audio-visual systems, and kitchen and bathroom fittings. For home appliance companies, this shift implies significant upside potential in average order value, product mix, and service revenue.
Second, the policy explicitly calls for improving the intelligent grading and evaluation standards system for smart home products, accelerating the formulation and implementation of mandatory national standards for smart home interconnectivity, and advancing the integrated development of whole-home intelligence. Additionally, the policy promotes default IPv6 activation on home broadband network devices, improves household IPv6 connectivity rates, and sets basic smart product requirements for newly built fully decorated residential units. Industry observers believe that the refinement of interconnectivity standards could serve as essential infrastructure for large-scale whole-home intelligence deployment. If smart devices from different brands can connect, recognize, and collaborate more smoothly, consumer barriers to adopting smart home technology will be significantly lowered, helping to resolve the long-standing pain point of buying smart devices that cannot communicate with each other.
The policy's direct demand-side support is equally noteworthy. The action plan states that, following the 2026 consumer goods trade-in policy framework, local governments are authorized to determine subsidy categories and standards for smart home products based on regional realities, while also coordinating support for whole-home smart purchases. Compared with traditional home appliance trade-in schemes, this policy extends coverage to whole-home intelligence. This means consumers may not only receive subsidies for individual smart appliances but, subject to local policies, whole-home smart upgrades could also qualify for government support. For businesses, this is expected to lower the upfront cost for consumers to upgrade their homes with smart technology, boosting penetration of high-end smart products and integrated solution packages.
Smart homes have already become a key focus in expanding resident consumption. Earlier, eight departments including the Ministry of Commerce issued policies on AI-plus-consumption, explicitly promoting smart appliances, smart kitchen and bathroom products, and smart lighting, driving upgrades of consumer electronics and home furnishing products, and integrating AI with home services by accelerating the adoption of smart sweeping and mopping robots, smart refrigerators, and smart kitchen equipment. Viewed from this perspective, smart homes are not an isolated single consumer segment but rather benefit from multiple policy directions simultaneously, including consumer goods trade-in programs, AI-plus-consumption initiatives, digital home construction, elderly-friendly renovations, and quality housing development. Against the backdrop of declining new housing starts and pressure on traditional home furnishing consumption growth, intelligent upgrades are emerging as a critical lever for the home appliance and furnishing industries to find new growth avenues.
The timing of this smart home policy rollout coincides with AI's accelerating migration from the cloud to physical consumer scenarios. In the past, so-called smart homes largely meant controlling appliances via mobile apps, such as remotely turning on air conditioning, switching off lights, or using voice assistants to operate televisions. With advances in large language models, AI agents, computer vision, and robotics, the smart home landscape is undergoing dramatic transformation. Future smart homes may no longer require users to issue frequent commands but will instead understand household members' needs and coordinate across devices to complete tasks autonomously. For example, AI could pre-start air conditioning based on occupants' arrival times; refrigerators could recommend recipes after recognizing inventory levels; kitchen appliances could automatically coordinate according to cooking workflows; cameras could detect anomalies and trigger home security systems; and home service robots would take on cleaning, organizing, and companionship duties. Consequently, AI Agent plus IoT plus smart hardware is becoming a crucial direction for smart home industry upgrades.
Shenwan Hongyuan Securities notes that furniture manufacturing revenue reached RMB 612.5 billion in 2025, with a compound annual growth rate of 4.6% from 2011 to 2025, reflecting steady demand growth. Policy optimization is boosting the sector's beta, while the turn in real estate expectations could unlock purchasing power; home furnishing valuations are at lows with risks largely priced in. In the long run, existing home inventory provides support, and market consolidation continues, with companies rolling out new smart home products and industry leaders following AI trends to innovate, with feature iterations stimulating replacement demand. The brokerage is bullish on valuation recovery for home furnishing companies.
Among the related concept stocks, HAIER SMARTHOME (06690): CLSA issued a research report maintaining an outperform rating on the company, raising its target price from HK$25 to HK$26. Haier Smart Home's second-quarter sales grew 1.4% year-over-year. The brokerage raised its 2026-2028 net profit forecasts by 0-7% to reflect cost efficiencies from digital transformation and lifted revenue projections by approximately 2% on the back of HVAC business restructuring and overseas inventory replenishment.
MIDEA GROUP (00300): Jefferies issued a research note stating that following exchanges with Midea Group management, confidence has increased regarding accelerated second-half growth, sustainability of full-year guidance, and shareholder returns. The brokerage expects growth drivers to include increased domestic air conditioning market share, accelerated overseas appliance sales, and B2B business growth potentially outpacing the home appliance segment. Jefferies maintains a buy rating, raising its H-share target price from HK$115 to HK$124.
TCL ELECTRONICS (01070): The company previously released interim results for the six months ended June 30, 2026, reporting group revenue of HK$63.763 billion, up 16.4% year-over-year; net profit attributable to shareholders of HK$1.529 billion, up 40.2%; and gross profit of HK$10.904 billion, up 30.3%.