Main points
This week, the household appliance sector rose by 1.3%, of which the white electricity / Black electricity / kitchen electricity / small household appliances sector increased by 1.6% / - 0.2% / 2.3% / 1.7% respectively. The performance of individual stocks in the sector was differentiated, and the white power sector Gree Electric Appliances Inc.Of Zhuhai(000651) performed better, with a weekly increase of 5.5%; Kitchen electricity sector Vatti Corporation Limited(002035) , Hangzhou Robam Appliances Co.Ltd(002508) performed well, with weekly increases of 7.4% and 3.6% respectively; The overall trend of the small household appliance sector was weak, of which Bear Electric Appliance Co.Ltd(002959) performed better, with a weekly increase of 3.1%. In terms of raw materials, LME copper, LME aluminum, steel and plastics prices rose by 1.7%, 3.7%, 3.4% and 0.4% month on month.
Recently, bulk commodities have broken the stabilization trend and continued to rise, which has aroused the market's concern about the expected rebound in the profitability of the household appliance sector. We hereby resume the historical rise in the price of raw materials. By reviewing the price changes of main raw materials of household appliances in recent 20 years, we found that it has experienced four price cycles, namely 03q4-09q1, 09q2-16q1, 16q2-20q2 and 20q3. In general, the growth rate rose rapidly to the peak within one year, then declined significantly, and then entered the repair cycle, and the repair cycle time was prolonged.
There is no need to worry too much about short-term price fluctuations. At present, the price may be at the turning point from slow rise to downward. Considering the preparation cycle, it is expected that the 22q2-q3 enterprise statement end will be significantly improved. At present, it is in a new round of price cycle starting from 20q3. According to the historical law, the price growth of main raw materials has reached the peak in 21q2, in which the prices of LME copper, LME aluminum, steel and plastic have increased by 81%, 60%, 50% and 26% year-on-year respectively. At present, the growth rate is in a rapid decline channel. As of February 11, 2022, the prices of LME copper, LME aluminum, steel and plastic have increased by 15%, 46%, 7% and 4% respectively year-on-year. The overall growth rate of 22q1 is expected to decline significantly. Considering the preparation cycle, the change of gross profit margin of downstream household appliance enterprises lags behind that of raw materials by about 1-2 quarters. It is expected that the reporting end of 22q2-q3 enterprises will be significantly improved.
Covid-19 drugs have been approved, and the consumer demand of offline stores can recover. Affected by the epidemic, the performance of household appliance consumption channels in the past 21 years was significantly differentiated, and the offline sales were significantly weaker than the online sales. According to ovicloud, the year-on-year growth rates of online refrigerators, air conditioners, washing machines and small household appliances in the past 21 years were 23%, 10%, 21% and - 10% respectively, which were better than the offline - 1%, - 2%, - 4% and - 23%. According to the news from CCTV news client on February 12, on February 11, the State Food and Drug Administration conducted emergency review and approval in accordance with the relevant provisions of the drug administration law and the special drug approval procedures, and conditionally approved the import registration of the combined packaging of nevitavir tablets / ritonavir tablets (i.e. paxlovid) of Pfizer covid-19 virus treatment drug. The approval of covid-19 drugs is expected to drive the recovery of consumer demand in offline stores.
Investment advice
White electricity and kitchen electricity faucets have high turnover efficiency and strong ability to raise prices. 22q1 has high certainty of performance improvement with the decline of raw material prices, and the post cycle demand of real estate is expected to be released quarterly. It is suggested to actively layout Midea Group Co.Ltd(000333) , Marssenger Kitchenware Co.Ltd(300894) before and after the annual report. The small household appliance sector Bear Electric Appliance Co.Ltd(002959) and other sectors have been subject to the pressure of high base in 21 years, and the performance of 22q1 is expected to improve with the recovery of demand; Q2 improvements such as Beijing Roborock Technology Co.Ltd(688169) , Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) are expected to be high, but according to its preparation cycle, 21q4 and 22q1 correspond to high price inventory, and the export business is greatly affected by the sea price. It is expected that 21q4 and 22q1 may still be under certain pressure, but it is suggested to pay attention to the investment opportunities brought by the fluctuation of stock price before and after the annual report.
Risk tips
The risk of rising raw material prices, the risk of less than expected demand, the risk of repeated outbreaks, the impact of exchange rate fluctuations, and the risk of chip out of stock and rising prices.
