The production growth rate of white goods in December continues to improve, and the prosperity of domestic and foreign sales persists; the effects of the old-for-new policy are remarkable, with expectations for the policy to continue into 2025.
According to reports from Zhitong Finance APP, Guosen published a research report stating that, according to data from the industrial online, the total production volume of white goods in December reached 33.98 million units, marking a 21.7% increase compared to the same period last year, with a slight month-on-month increase in growth rate. Domestic sales continue to show good growth, with an increase in refrigerator sales growth; the growth rate of export production has slowed slightly, but air conditioner growth remains strong. Furthermore, according to data from Aowei Cloud Network, prior to the implementation of the old-for-new policy (before August 25), the retail growth rate of seven major categories of home appliances under national subsidies was +2.6%/-7.3%; after the implementation of national subsidies, the retail growth rates for these seven categories were +25.2%/+65.9%, with month-on-month increases of 22.6 pct/73.2 pct respectively. Currently, the stance of governments from central to local levels remains positive, and the old-for-new policy is expected to continue.
Guosen Securities' main points are as follows:
The production growth rate of white goods in December continues to improve, and the prosperity of domestic and foreign sales persists.
According to data from industrial online, the total production volume of white goods in December reached 33.98 million units, an increase of 21.7% compared to the same period last year, with a slight month-on-month increase in growth rate. By category, in December, the production volume of air conditioners for domestic/foreign sales increased by 15.0%/48.5% compared to the same period last year, with a total production of 17.9 million units, an increase of 31.7%. The production of refrigerators for domestic/foreign sales increased by 19.0%/12.5% compared to the same period last year, with a total production of 8.6 million units, an increase of 15.0%. In December, the production of washing machines for domestic/foreign sales increased by 4.1%/7.6% compared to the same period last year, with a total production of 7.48 million units, an increase of 9.0%. Domestic sales of white goods continued to show good growth, and the growth rate of refrigerator sales has improved somewhat; the growth rate of export production has slowed slightly, but air conditioner growth remains strong.
The effects of the old-for-new policy are remarkable, with expectations for the policy to continue into 2025.
The Ministry of Commerce's national data platform for the old-for-new home appliance program shows that as of November 8, 20.26 million consumers purchased 30.46 million units of eight major categories of home appliances, driving sales of 137.8 billion yuan. According to data from Aowei Cloud Network, before the implementation of the old-for-new policy (before August 25), the retail growth rate of seven major categories of home appliances under national subsidies was +2.6%/-7.3%; after the implementation of national subsidies, the retail growth rates for these seven categories were +25.2%/+65.9%, with month-on-month increases of 22.6 pct/73.2 pct.
Currently, the statements from central to local governments continue to be positive, and the old-for-new policy is expected to be extended. On November 19, the National Development and Reform Commission mentioned at a press conference that it would conduct a strengthened evaluation of the effectiveness of the 'two new' policies, summarizing the good practices for continuation; it will research and propose future policies to continue to increase support and expand the scope of support. On November 21, the Hubei Provincial Department of Commerce issued a notice organizing the registration of merchants for the redemption of consumer goods old-for-new in 2025. With the active actions from the central government and various localities, it is expected that the old-for-new policy for home appliances will likely continue in 2025, further stimulating the release of demand for upgrading home appliances.
The scale of overseas 'Black Friday' promotions is accelerating, bullish on home appliance cross-border e-commerce going abroad.
This year, the 'Black Friday' and 'Cyber Monday' events in Amazon's USA and Europe regions will take place from November 21 to December 3, lasting for 12 days, an extension from last year's 8 days. According to Adobe Analytics data, online sales during the USA 'Black Friday' reached 10.8 billion USD, a year-on-year increase of 10.2%. This year's online sales growth rate for 'Black Friday' has reached a new high since 2021, reflecting strong demand on online e-commerce platforms. Chinese home appliance companies are generally selling in the North American and European markets through cross-border e-commerce platforms like Amazon, including beijing roborock technology, midea group co., ltd, ecovacs robotics, xgimi technology, vesync, and bear electric appliance. Against the backdrop of rapidly growing overseas online demand, the demand for Chinese home appliance e-commerce going abroad is expected to witness good growth.
Key data tracking: Market performance: The relative return of the home appliance sector in November was -3.07%. Raw materials: In November, the LME three-month copper and aluminum prices decreased by -5.9% and -2.1% month-on-month, respectively; the price of cold-rolled steel increased by +1.7% month-on-month.
Shipping index: The indices for routes to the western USA/eastern USA/europe in November decreased by -11.20%/+5.29%/+10.01% month-on-month.
Core investment portfolio recommendations: For white goods, recommend midea group co., ltd (000333.SZ), TCL smart home (002668.SZ), haier smarthome (600690.SH), gree electric appliances, inc. of zhuhai (000651.SZ), and hisense ha (000921.SZ); for kitchen appliances, recommend hangzhou robam appliances (002508.SZ); for small appliances, recommend bear electric appliance (002959.SZ), beijing roborock technology (688169.SH), and guangdong xinbao electrical appliances holdings (002705.SZ).
Risk warnings: Increasing market competition; demand may not meet expectations; significant price increases for raw materials.
