Jingu Wealth News | Citic Securities stated that the short-term concern-induced stock price decline has provided a comparatively good timing for mid-term configuration of home appliances. The bank believes that the three short-term concerns of home appliances (air conditioning base, raw material marine transportation fees, and overseas inventory replenishment) are disturbing the valuation of the home appliance sector in the short-term. However, considering 1) that the base number is not a growth issue and that there is still about 20% growth space for mid-term air conditioning sales volume, 2) raw materials fell back after a surge without demand support and marine transportation fees also dropped continuously after the peak of grabbing orders, and 3) the global competitive ability of the Chinese home appliance industry can support its continued increase in overseas market share. After the pandemic, major players are accelerating their pace of going global. If North America raises tariffs, the increased local average price of home appliances will partially offset the short-term weakening of their price competitiveness, and in the medium to long-term, it may accelerate the capacity for going global.
Recommended industry leaders to follow: White goods: Haier Smarthome (06690), Hisense Ha (00921), etc; Black goods: TCL Electronics (01070), etc.