The Zhitong Finance App learned that Haitong International released a research report saying that Shanghai responded positively. The implementation period for the new round of green smart home appliance consumption subsidy policies will be from March 30 to December 31, 2024. The subsidy amount will be 10%, up to a maximum of 1,000 yuan. The bank believes that the current level of ownership of major household appliances is already at a high level, and it is difficult for the policy to rely on the demand explosion brought about by the increase in ownership, but the policy is expected to marginally stimulate demand for renewal. On the main recommendation line, the bank believes that the revenue and profit performance of leading home appliances is steady, the valuation safety margin is high, and it focuses on high-quality individual stocks with stable fundamentals and their own alpha.

Haitong International's views are as follows:

The policy once again promoted equipment renewal and trade-in of consumer goods, and Shanghai responded positively.

Recently, the fourth meeting of the Central Committee on Finance and Economics emphasized that speeding up product upgrading is an important measure to promote high-quality development, and that a new round of large-scale equipment upgrades and consumer goods trade-in should be encouraged and guided. The Executive Meeting of the State Council reviewed and approved the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In”. Subsequently, Shanghai responded positively. The implementation period for a new round of green smart home appliance consumption subsidy policies will be implemented from March 30 to December 31, 2024. The subsidy amount will be 10%, up to a maximum of 1,000 yuan. Compared with the October '22 subsidy policy, kitchen appliances and dishwashers with low penetration rates and various small household appliances such as air purifiers, rice cookers, microwave ovens, induction cookers, electric fans, and water purifiers will be added.

The last round of household appliance consumption stimulus policies promoted a rapid increase in the number of household appliances owned.

The last round of large-scale household appliance consumption stimulus policies included moving home appliances to the countryside, trade-in, energy saving and benefiting the public. The policy continued from 2008 to 2012. The stimulus policy was accompanied by an increase in the number of white goods owned in rural areas and the explosion in demand for the renewal and replacement of black electricity, which greatly boosted sales within the industry. The number of household appliances increased rapidly, but the impact of the stimulus decreased year by year.

What is the difference in the general context of the current round of consumer electronics consumption stimulation?

Currently, the number of major household appliances is already at a high level. It is difficult for the policy to rely on the demand explosion brought about by the increase in ownership, but the policy is expected to marginally stimulate demand for renewal. Relatively speaking, the bank believes that the industry background of this round of household appliance consumption stimulus policies is very different from the previous round: 1) higher household appliance ownership means a larger stock market; 2) upgrade demand for higher-end products: new products in the domestic air, ice, washing, and color TV markets have obvious functional upgrades compared to earlier products. 3) Higher faucet concentration.

Investment advice: The bank believes that the trade-in policy will further promote demand for improved updates, and at the same time have a driving effect on optional household appliances that have a low penetration rate. On the main recommendation line, the bank believes that the revenue and profit performance of leading home appliances is steady, the valuation safety margin is high, and it focuses on high-quality individual stocks with stable fundamentals and their own α; 1) continues to recommend white electronics with stable undervaluation growth and high dividends, such as Midea Group (000333.SZ), Hisense Home Appliances (000921.SZ), Haier Smart Home (600690.SH), etc.; 2) Focus on targets with beta+α growth characteristics: Stone Technology (688169.SH), etc. 688398.SH 3) Focus on troubled reverse transformation companies, such as Winnie Mouse Electric (002959.SZ), Covos (603486.SH), etc.

Risk warning: Demand for terminals falls short of expectations, and overseas demand fluctuates.