Home appliance stocks have seen the highest gains. As of publication, they have risen by 7.38% to HKD 26.2, 5.09% to HKD 5.16, 4.67% to HKD 25.75, and 3.6% to HKD 2.88, respectively.$HISENSE HA (00921.HK)$It rose 5.12% to HKD 25.65;$TCL ELECTRONICS (01070.HK)$It rose 6.92% to HKD 5.25;$HAIER SMARTHOME (06690.HK)$It rose 5.28% to HKD 25.9;$SKYWORTH GROUP (00751.HK)$It rose 3.96% to HKD 2.89.
On the issue, several departments including the National Development and Reform Commission (NDRC) have recently released a series of measures, which would put into place over CNY 300 billion of ultra-long-term special government bonds to support large-scale equipment upgrades and replacement of consumer goods. Among them, subsidies will be provided to individual consumers to replace their old refrigerators, washing machines, TV, air conditioners, computers, water heaters, household stoves, range hoods and other 8 types of household appliances with those meeting 2nd or above energy or water efficiency standards. The subsidy standard is 15% of the product sale price, and an additional subsidy of 5% of the product sale price will be given to those who purchase products meeting 1st or above energy or water efficiency standards.
Huaxi Securities pointed out that the current valuation of home appliances is at the bottom, and once subsidies are implemented, there is hope for a rebound in domestic sales. The sector's fundamentals and valuations are expected to improve, with leading companies to benefit the most. The current home appliances market is a stock-updating market, but the phenomenon of over-age service is quite common, and it is expected that the subsidies will directly stimulate the demand for home appliance updates. Bocom Intl. expressed that this round of support is stronger than that in 2009. Since the first round of supportive policies for home appliances have been implemented for about 10-15 years, which is consistent with the replacement cycle of traditional white goods and kitchen appliances, there are a large amount of replacement needs waiting to be released in the market.