To be honest, the old saying that has hit the screens in many investment groups recently – “If the RMB falls below 7.3, export stocks will take off.”
But there is an information gap that needs to be corrected first: Not only did the RMB not fall this year, but it soared to around 6.8.
On April 14, 2026, the offshore RMB reached 6.8119 intraday, setting a new high since March 2023.
In the past April, the spot exchange rate of RMB against the US dollar rose from 6.9081 to 6.8335, an increase of 746 basis points in one month, and the cumulative appreciation of the central parity rate exceeded 2.3%.
Doing the math, from 7.43 last year to breaking through 6.81 now, the RMB has appreciated by more than 8% in more than a year.
If you still hold on to the old logic of “depreciation is good for export stocks” and do short-term business, you may find that the textile stocks in your hand have been falling.
This incident makes people think – The impact of exchange rate on the profits of export companies is a hundred times more complicated than “gain when the value depreciates and losses when the value rises”.
Today, from a different perspective, let’s talk about the real situation of export leaders and the logic worthy of attention during the RMB appreciation cycle.
The core is not to guess the direction of the exchange rate, but to clearly understand the differentiated response capabilities of the three types of enterprises.
Where did the background of appreciation come from?
It is not because of how strong China is, but because the US dollar is too weak
It has been observed that the wave of appreciation in 2026 actually has little to do with the fundamentals of the domestic economy.
There are three driving forces behind this: The weakening of the US dollar, centralized foreign exchange settlement, and central parity control.
Let’s talk about the US dollar first.
Expectations for the Federal Reserve to cut interest rates have not subsided. The U.S. dollar index fell below 100 last year and is still hovering at a low level after the start of the year.
Moreover, the Trump administration’s intervention in the Federal Reserve’s independence and the rising geopolitical situation in the Middle East have undermined global capital’s confidence in U.S. dollar assets.
The weakening of the U.S. dollar has driven the passive appreciation of all non-U.S. currencies, and the RMB is just one of them.
Second, companies focus on settlement of foreign exchange at the end of the year.
In 2025, China’s trade surplus will exceed US$1.19 trillion, setting a historical record. A large foreign trade surplus means that there will be a large demand for the return of overseas funds.
So many U.S. dollars have to be exchanged for RMB, which objectively creates a push for RMB appreciation.
The third and most interesting point is that the central bank’s regulatory direction has changed.
At the Politburo meeting at the end of April 2026, for the first time nearly a year later, it was clearly stated again that “the RMB exchange rate should be basically stable at a reasonable and balanced level.”
But pay attention to the background of this statement: before it was said that “stabilizing the exchange rate” was to prevent unilateral devaluation, this time it has become to prevent excessive appreciation.
Just on February 27, the central bank directly lowered the foreign exchange risk reserve ratio from 20% to 0%, aiming to encourage companies to purchase forward foreign exchange and increase demand for U.S. dollars to moderate the rapid appreciation.
To put it bluntly: It’s not that the RMB has to appreciate, but that the U.S. dollar is too weak. In addition, last year’s exports were so good that the RMB rose too much passively. Instead, the central bank began to “press the brakes”.
The truth about the exchange rate of three export stocks: the appreciation books are completely different
But if the exchange rate logic only stays at the level of the market game, it will not be implemented.
What is really informative is looking at the financial statements of specific companies –The proportion of overseas revenue and hedging strategies determine whether appreciation is a “stab in the knife” or a “scratching of an itch”.
Let’s first look at Haier Smart Home, the leader in white goods.
Its overseas revenue in 2025 will reach 154.545 billion yuan, accounting for more than 50% of total revenue for the first time. The growth rate of overseas business is faster than that of domestic business – domestic growth of 3.07% and overseas growth of 8.15%.
Overseas assets are 150.675 billion yuan, accounting for more than 50% of total assets.
To be honest, according to the crudest logic, if the overseas exposure is 50%, appreciation will have the greatest impact on its profits.
But the problem is – looking at its reports, overseas performance has not collapsed.
The overall net profit attributable to the parent company in 2025 will be 19.553 billion yuan, a year-on-year increase of 4.39%.
Why?
Two reasons: First, its overseas business is mainly concentrated in the Americas, Europe, and Southeast Asia. It uses a multi-currency income and liability portfolio, which naturally hedges part of the exchange rate fluctuations; second, Haier makes high-premium brands overseas (Casarte Import Exhibition, GE Home Appliances, etc.), has pricing power, and can partially absorb exchange losses through product iteration.
Research by Tianfeng Securities also confirms this. Dabai Electric Co., Ltd., which has a well-established hedging strategy, has not suffered any significant damage in the two rounds of RMB appreciation cycles in history.
The situation of Midea Group is more interesting.
Overseas revenue in 2025 will be 195.9 billion yuan, a year-on-year increase of 16%, and ToB business is also growing rapidly.
After the first quarter results of 2026 were released, many people began to panic when they saw that non-net profits had dropped by 14% year-on-year.
But if you look closely, you will find that it is not a decline in operations at all – the research report of Guoyuan Securities clearly points out that a large part of non-recurring profits and losses comes from “investment income/gain on fair value changes caused by hedging”, which is essentially Midea’s normal profit adjustment in order to maintain the “neutral principle of overseas business exchange rates”.
In other words, in order to lock you in a relatively stable profit box, the company has made a complete set of forward exchange locks. The profit fluctuations shown in the books are mostly caused by accounting processing.
This is a defensive posture, not for foreign exchange speculation, but to preserve the certainty of core business.
Shenzhou International in the textile industry is a typical example of “uncontrollable impact” in the appreciation cycle.
In 2025, Shenzhou’s revenue was 30.994 billion yuan, an increase of 8.1%, but the net profit attributable to the parent company fell to 5.825 billion yuan, a year-on-year decrease of 6.7%.
Two reasons are directly stated in the annual report: one is that there was an equity transfer income of 331 million yuan last year, and the other is that “the exchange rate of RMB against the US dollar increased, resulting in an exchange loss of approximately 256 million yuan.”
Shenzhou’s overseas sales account for 76.2%. Its overseas production capacity is mainly in Vietnam and Cambodia. The U.S. dollars earned shrink when converted back into RMB.
Moreover, its customers are big brands such as Nike and Adidas, and the bargaining power is concentrated in the hands of the brands, making it difficult to transmit fabric price increases.
Therefore, in the event of appreciation, exchange losses will be truly reflected in net profits.
Institutions have big differences in words, but in practice, they believe in these three lines.
The biggest fear in exchange rate analysis is that “whoever you listen to will not be right in the end for the stock.”
At present, the forecasts of major institutions are like a split – Huatai Securities is optimistic that the RMB will continue to appreciate, and is targeting 6.82 by the end of the year; Oriental Jincheng said that the whole year of 2026 will fluctuate in both directions around 7.0 to 7.2, and there will even be some depreciation pressure; Morgan Stanley predicts that after peaking at 6.85, it will return to 7.0 by the end of the year, and accelerate to 6.8 next year.
What should we do if there are such big differences?
Instead of focusing on points, it’s better to focus on three dimensions.
The first is to look at the hedging exposure coverage ratio.
Since 2026, there have been more than 260 foreign exchange hedging announcements by listed companies.
When a company locks a large proportion of its overseas U.S. dollar revenue in the next six to 12 months at an exchange rate, to put it bluntly, short-term performance has no direct relationship with the spot exchange rate.
At this time, appreciation is a protective umbrella to lock in costs.
The second is to look at gross profit margin and pricing power.
If the gross profit margin is below 20% all year round, then a one or two point fluctuation in the exchange rate is a life-or-death line.
But like Haier, its overseas gross profit margin has not collapsed because it is taking a differentiated brand route.
Midea has already raised the price of air conditioners at the beginning of the year, which is actually the best manifestation of its hedging ability.
The third is to look at the layout of overseas production areas.
The model that relies solely on domestic production and re-export is the most vulnerable to injury.
The ones that are truly resistant are companies that already have production capacity overseas – such as Shenzhou’s Vietnam and Cambodia bases, Haier’s global factories and Midea’s 43 overseas manufacturing bases.
They pay wages, purchase raw materials, and do sales in local currencies, which naturally reduces their sensitivity to the RMB exchange rate.
Let’s talk about a very practical phenomenon: in 2025, leading home appliance companies such as Midea, Gree, and Haier will frequently repurchase and cancel tens of billions of shares.
Midea plans to repurchase up to 13 billion yuan and cancel all of it, which is equivalent to a disguised dividend rate of close to 8%. In fact, it is “using the money of major shareholders to lock the income rights in the hands of shareholders.”
This type of operation is somewhat more robust than betting on the direction of the exchange rate.
How do ordinary investors track exchange rates and shareholdings?
Three practical notes
Finally, let’s talk about something down-to-earth – as an ordinary investor, you cannot regard exchange rate judgment as a forecast bet, but you must not operate blindly.
I will do three things in my daily tracking:
First, add “foreign exchange forward transaction volume” to the daily table.
The increase in foreign exchange forward contracts released by a company often means that it is actively locking foreign exchange and has a cautious attitude.
At present, the central bank has lowered the risk reserve ratio to 0%, and the cost of forward foreign exchange sales has dropped sharply. In the future, more outstanding small and medium-sized enterprises will join the foreign exchange lock team.
Second, don’t just look at the single value of RMB against the U.S. dollar. International settlement business has already been diversified—Midea and Haier use local currencies for settlement in the Eurozone and Southeast Asia, and some cross-border RMB settlement platforms are also accelerating their penetration.
Paying attention to the source of currency on the “Foreign Sales Revenue Structure” page of the company’s annual report is far more effective than reading Trump’s Twitter.
The third is to look at the CFETS basket currency index.
This round of appreciation in 2026 is against the U.S. dollar, but the overall basket of currencies will depreciate slightly compared to last year. However, export competitiveness against the euro has not been lost.
This means that the true profits of some companies whose overseas customers are mainly located in Europe and Southeast Asia are overestimated.
By the way, I have been thinking about a question recently – a large number of companies with trade surplus are facing short-term exchange pains in the context of appreciation. A large number of US dollars are retained in overseas accounts and dare not settle exchanges. When the appreciation expectations are slightly reversed, will there be a secondary impact of the “peak of settlement of exchanges”?
This matter is worthy of continuous observation, and you are welcome to chat about your opinions and actual cases encountered in the comment area.
