(Photo courtesy of Hero)
The home appliance index has been in a row for six consecutive years, hitting a two-year high -
On April 18, the A-share Wind Home Appliances Index (886035) rose for six consecutive trading days, hitting a new high since February 2022. It rose 1.65% on the day to close at 9446.13 points. It is worth mentioning that on the same day, there were 5 stocks in the index of Delmar, Lianyu Shares, Chunguang Technology, Aopu Home Furnishing, and Jinhai Hi-Tech, of which Chunguang Technology had five boards.
Judging from the increase in the past 60 days, Omar Electric, Changhong Meiling, and Hisense Home Appliances ranked among the top three in the sector, with 59.44%, 53.55% and 53.32% respectively.
From the perspective of industry fundamentals, data from the General Administration of Customs shows that China exported 318.8 million household appliances in March 2024, a year-on-year increase of 1.9%. From January to March, a total of 950.78 million units were exported, a year-on-year increase of 23.7%. Specifically, the cumulative export data from January to March was 18.64 million air conditioners, a year-on-year increase of 11.2%, refrigerators 17.79 million units, a year-on-year increase of 34.4%, and washing machines 38.08 million units, a year-on-year increase of 30.0%.
In addition to exports, domestic sales from the high-frequency data since April, Minsheng Securities research report shows that the demand for consumer home appliances is improving. From April 1 to 7, the online and offline retail sales of all categories of home appliances increased by 36.6% and 10.1% year-on-year respectively. In terms of production scheduling data, air conditioners, refrigerators, and washing machines increased by 22.7%, 14.2%, and 2.0% year-on-year respectively in April.
In terms of performance, the current industry annual reports have been disclosed one after another, and the performance of many leading home appliances has grown beautifully, and the net profit has increased by more than double digits year-on-year.
The industry boom is expected to continue, focusing on three main investment lines //
In addition, the catalyst from the policy side is worth paying attention to. On April 12, the Ministry of Commerce and 14 other departments issued the "Action Plan for Promoting the Trade-in of Consumer Goods" to organize the trade-in of automobiles and home appliances and the "renewal" of home decoration, kitchen and bathroom nationwide. It is proposed that "by increasing policy guidance and support, we will strive to further increase the market share of high-efficiency and energy-saving household appliances by 2025, increase the recycling volume of waste household appliances by 15% compared with 2023, and increase the recycling volume of waste household appliances by 30% by 2027 compared with 2023." ”
By reviewing the rise and fall of the household appliance sector during the implementation of the past three rounds of household appliance subsidy policies, Debang Securities pointed out that during the implementation of the three rounds of policies from December 2007 to June 2013, the Shenwan household appliance sector rose by 22.5%, ranking second in the industry, significantly outperforming the market. The agency further pointed out that the central and local governments have attached great importance to the current round of consumer goods trade-in policy, and many places have responded positively and clearly proposed to increase the trade-in efforts, which is expected to drive a new round of improvement in the fundamentals of the home appliance industry and is also expected to boost the valuation level of the home appliance sector. At present, it is still in the early stage of this round of policies, and it is recommended to focus on policy-driven plate opportunities.
Galaxy Securities believes that with the gradual expansion of domestic demand and consumption promotion policies in the future, domestic demand for household appliances is expected to be supported, superimposed on the gradual removal of overseas inventories, the improvement of exports is expected to continue, the prosperity of the household appliance industry is expected to continue to recover, and the current valuation of the sector still has a margin of safety. It is recommended to pay attention to three main lines of investment: (1) white electric faucets that are expected to benefit from the improvement of domestic and foreign sales, (2) kitchen faucets that are expected to benefit from the optimization of the industry pattern, and (3) clean electrical appliances that actively promote channel expansion and accelerate the launch of new products.
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