The Zhitong Finance App learned that Huaxi Securities released a research report saying that according to sorting, most provinces launched policies around the end of August. Referring to the cumulative sales data of Aowei Cloud Network W34-W38 (2024.08.26-2024.09.15), the year-on-year sales growth rates for air conditioners, refrigerators, washing machines, range hoods, and color TV were 72%, 44%, 66%, and 32%, respectively. As of W34 at the beginning of the year, sales in the above categories all declined year-on-year. Looking ahead to the future market, according to the latest October production schedule data from Industry Online, compared to September expectations, the growth rate of air conditioning Q4 production may accelerate month-on-month, mainly due to high temperatures in September, the popularity of promotional activities, or acceleration of channel inventory removal. It is expected that in October-December, driven by the peak promotion season at the end of the year, the domestic sales market is expected to break out of its trough, shifting from decline to increase.

The main views of Huaxi Securities are as follows:

Look at the policy: Trade-in rules were implemented intensively in various regions in August, and the driving effect was impressive

Policy implementation status: Looking back at the process of issuing the trade-in policy, the State Council launched an action plan in March, and the National Development and Reform Commission and others issued specific measures. More than half of the provinces completed the introduction of detailed subsidy policies in August. Compared with the central government policy, on the basis of 8 types of household appliances with clear subsidy standards, 20 regions included dryers, sweepers, dishwashers, etc. in the scope of subsidies, and 23 regions distributed home appliance subsidies using a discount model, so that consumers can enjoy the discount immediately.

Retail sales momentum: According to the National Development and Reform Commission (September 24), sales have so far exceeded 24.3 billion yuan, accounting for about 5% and 4% of retail sales of products (household appliances and audio and video equipment) of enterprises above the limit in March-August and January-August, respectively.

Look at the region: Home appliances in the first subsidy provinces have a remarkable effect, and regions such as Zhejiang are sustainable or strong

After the August rules were implemented, the selected provinces all performed well in the air conditioning and range hood categories, while the performance of other categories was somewhat differentiated. Refrigerator sales performed better, more sustainable, or stronger year over year in Hubei, Zhejiang, Chongqing, Sichuan, Guangdong and other regions; washing machine sales performed better, more sustainable, or stronger year over year in Zhejiang, Chongqing, Jilin, Sichuan, Guangdong and other regions; color TV sales performed better, more sustainable, or stronger year on year in Zhejiang, Jilin, Beijing, Fujian, Sichuan, Guangdong, etc.; color TV sales performed better year over year in Zhejiang, Jilin, Beijing, Fujian, Sichuan, Guangdong, etc. Excellent, persistent, or strong.

Look at categories: The growth rate of most subsidized categories changed from negative to positive, high energy efficiency subsidies or drive product structure upgrades

The impact of the trade-in subsidy policy was remarkable, and air conditioners and range hoods performed well. According to Huaxi Securities, most provinces introduced policies around the end of August. Referring to the cumulative sales data of Aowei Cloud Network W34-W38 (2024.08.26-2024.09.15), the year-on-year sales growth rates of air conditioners, refrigerators, washing machines, range hoods, and color TV were 72%, 44%, 66%, and 32%, respectively. As of W34 at the beginning of the year, sales in the above categories all declined year-on-year.

There is an upward trend in the average price of air conditioners: in Hubei and Zhejiang, the provinces that implemented subsidy rules earlier, as examples, the average price of air conditioners was more clearly affected by the subsidy policy year over year. According to Aowei Cloud, there was a clear upward trend around W35, or because consumers consider that 15-20% price subsidies can offset premium prices for high-end brand products. It is expected that subsidies will be energy efficient or continue to promote product structure upgrades.

Look at the brand: The volume and price of offline and first-tier brands have risen sharply, and online Xiaomi continues to perform well

Air conditioning: The volume and price of leading offline brands have risen sharply, and online Xiaomi continues its high growth performance. According to Aowei Cloud Network, Casadi, COLMO, Midea, and Gree, which have the highest average offline prices, performed better year-on-year. W35-W38 sales were 111%, 82%, 85%, and 67%, respectively. Among them, the average prices of Midea and Gree also increased year-on-year. Online, Midea, Gree, and Haier, which have the highest average prices, performed well in sales. Furthermore, Xiaomi is the only brand online that has achieved a sharp rise in volume and price.

Refrigerators: Offline high-end brands lead the growth rate, Midea's omni-channel sales performance is impressive, and online Xiaomi continues to have high growth performance. In terms of year-on-year sales growth, Midea's W35-W38 offline and online sales growth rates were 57% and 110%, respectively, followed by high-end brands such as Casadi and Haier. Online, the Xiaomi brand continues to lead the industry.

Color TV: The leading offline domestic brands have performed well, and the online Thunderbird brand continues to grow at a high rate. According to Aowei Cloud Network, the color TV channel W35-W38 showed a sharp rise in volume and price. On the offline side, W35-W38 Hisense and TCL had sales of 34% and 20% year-on-year respectively, with average prices of 8440 and 6987 yuan respectively, leading other domestic brands; online, Thunderbird's sales increased 292% year on year, far ahead of peers.

Watch channels: Offline and online synchronicity is high

The requirements for offline dealers to participate in the renewal are more about financial strength and management standardization. Huaxi Securities said that according to the policy analysis for each prefecture-level city, in terms of finance, enterprises are generally required to have the ability to advance capital, dealers with strong financial strength, or a stronger ability to continuously participate in subsidy activities.

Online and offline synchronicity is high, and JD has the highest coverage area. According to JD's official website, JD basically introduced trade-in policies at the same time as various local subsidy policies. After completing real name registration, users can enjoy the same preferential policies as offline.

Looking at production schedule: domestic sales of air conditioners Q4 are expected to accelerate year-on-year growth

The air conditioning performance may be more optimistic. According to Industry Online's latest production schedule data for October, compared to September expectations, the growth rate of air conditioning Q4 production may have accelerated month-on-month, mainly due to high temperatures in September, the popularity of promotional activities, or accelerated channel inventory removal. It is expected that in October-December, driven by the peak promotion season at the end of the year, the domestic sales market is expected to break out of its trough, from decline to increase.

Investment advice

It is recommended to focus on white electricity-related companies such as Midea Group (000333.SZ), Gree Electric (000651.SZ), Haier Smart Home (600690.SH), Hisense Home Appliances (000921.SZ), and Changhong Meiling (000521.SZ), black electricity-related companies such as TCL Electronics (01070), Hisense Vision (600060.SH), and home appliance component companies Safety Environment (002011.SZ), Sanhua Intelligent Control (002050.SZ), and Changhua Hongyi (000404.SZ).

Risk warning

Risks such as downstream demand falling short of expectations, increased industry competition, falling short of expectations, fluctuations in upstream raw material costs, etc., risk of untimely delivery of goods due to rising shipping rates and port blockages, risk of iterative technology, deviation in industry space measurements, risk of third party data distortion (industry online, Aowei cloud network data does not represent the actual situation of the industry; data and trends are for reference only); public data used in research reports may have risks such as delays in information or untimely updates, etc., the disclosure policy of the National Development and Reform Commission drives retail sales volume of products above the national bureau of statistics limits Comparable, the calculated ratio is for reference only.