Kingwoo Financial News | The Hang Seng Index closed at 19,279 on Wednesday (8th), down 167 points or 0.9%. The market had a total turnover of 168.3 billion yuan for the day. The National Index closed at 6,990, down 0.8%; the Science and Technology Index fell 1.1% to 4,307. The mainland has launched a mobile phone subsidy, but analysts indicate that most models sold by Apple in the mainland will likely not benefit, leading to a sell-off in Chinese Concept stocks. Sunny Optical (02382) dropped 7.6%, making it the worst-performing blue-chip stock; officials from the National Development and Reform Commission stated that the number of categories of home appliances eligible for old-for-new subsidies has increased from 8 to 12 compared to last year, with a maximum subsidy of 20% of the selling price per item. This news helped HAIER SMARTHOME (06690) rise by 2.9%;

The Dow Jones closed at 42,635 on Wednesday (8th), up 106 points or 0.25%; the S&P 500 index edged down 0.16% to 5,918 points; the Nasdaq slightly fell 0.06% to 19,478; the Golden Dragon Index, which reflects the performance of Chinese Concept stocks, slipped 0.67%. Among prominent stocks, Nvidia's stock price rebounded by 2.7% at one point, closing down by less than 0.1%; Tesla rose by 0.2%, while Alphabet fell by 0.8%. The Asia-Pacific stock market exhibited mixed performance this morning (9th), with the Nikkei 225 Index currently at 39,823 points, down 127 points or 0.39%. The South Korean Composite Index is at 2,526 points, up 5 points or 0.22%. It is recommended to pay attention to the Utilities Industry; GUANGDONG INV's divestment of its domestic property business enhances value.

Market Focus: HAIER SMARTHOME (06690)

The National Development and Reform Commission and the Ministry of Finance recently clarified that by 2025, efforts will be intensified to implement a large-scale equipment renewal and consumer goods old-for-new policy. This indicates that the 'old-for-new' policy will continue to gain momentum this year, likely supporting an increase in demand for home appliances and driving the Sector to further rebound and achieve both volume and price growth, which is especially beneficial for companies with comprehensive product competitiveness. HAIER SMARTHOME maintained a stable performance in the first three quarters of last year, successfully holding a higher growth rate despite a high base. Under digital transformation, the group's gross margin has improved, and expense optimization has been achieved, significantly enhancing profitability. Data shows that the digital transformation has led to improved cost competitiveness and capacity utilization, with a year-on-year increase of 0.1 percentage points in gross margin to 30.8% in the first three quarters; there has also been efficiency improvement in marketing resource allocation, logistics distribution, and warehouse operations, with a year-on-year optimization of 0.5 percentage points in the sales expense ratio in the first three quarters. HAIER SMARTHOME has advantages across all categories of home appliance products and is among the first in the industry to launch Smart Home solutions. Recently, the group also invested in establishing a wholly-owned robot company in Qingdao, with a scope that includes various AI businesses, likely to better support the group's product intelligence and high-end development, enhancing its competitiveness and better grasping industry trends. Meanwhile, according to recent data from the State Council's regular press conference, sales of first-level energy-efficient products accounted for over 90% of the achievements in the household appliance 'old-for-new' policy in 2024, driving constant double-digit growth in sales of high-energy efficiency level and smart home appliance retail for four consecutive months; in home decoration for kitchens and bathrooms, nearly 10 million smart home products such as smart toilets, robotic vacuum cleaners, and smart locks have also been newly replaced. It is expected that with the increasing development of cutting-edge technologies such as AI, the trend of intelligence and high-end development in the home appliance industry will be significant.

Target Price 34 Stop Loss Price 22.

(The author is a licensed person of the China Securities Regulatory Commission and does not hold any of the above stocks.)

Author: Dr. Tang Shengxing, Chairman of the Hong Kong Stock Analysts Association.