Terminal demand bottomed out and raw material prices remained high. As of February 25, the home appliance index (Shenwan) fell 3.6% this month, underperforming the Wande all a index by 6.1pcts It is mainly due to two reasons outside China that led to the retreat of the sector last week: last week, the risks in the peripheral market continued to ferment, the conflict between Russia and Ukraine further escalated, and the EU and the United States successively issued sanctions against Russia. Considering that Russia is an important country of origin of bulk commodities, the market is worried about whether the price of raw materials will rise again in the future. In China, according to Kerui data, the sales amount of the top 100 real estate enterprises in January was - 40.7% year-on-year. The marginal relaxation of real estate policy has not yet brought substantive signs of recovery. However, with the national "two sessions" approaching, the policy of "steady growth" may be further strengthened, and China's macro economy will obtain basic support. We believe that there is no need to be pessimistic about the changes in the future prosperity of the industry.
In terms of home appliance fundamentals, we selected 17 home appliance stocks as the research object. Their overall ROE (TTM) has been in a downward channel since the peak in the mid-18 years. The ROE (TTM) in the third quarterly report of 20 years was the lowest value of 17%, and then rebounded. As of 21, the ROE (TTM) in the third quarterly report of 21 years has rebounded to 21%, still 23% lower than the historical average (2014 first quarterly report - 2021 third quarterly report). Looking forward to 2022q1, the bad situation of the household appliance sector is gradually passivated + the valuation is low, and the time point of better configuration is approaching. (1) Negative passivation: raw material prices open a downward channel, the superposition base increases, and the upstream cost pressure decreases marginally in 2022. (2) Low valuation:
The overall valuation of home appliance stocks fell to near the historical average of PE. (3) Rising allocation value: the experience of the past 16 years shows that Q4 to Q1 is a period with high winning rate. It is suggested to focus on three main lines: (1) traditional leaders benefiting from fundamental recovery, focusing on Gree Electric Appliances Inc.Of Zhuhai(000651) , Haier Smart Home Co.Ltd(600690) , Midea Group Co.Ltd(000333) , Hangzhou Robam Appliances Co.Ltd(002508) , Joyoung Co.Ltd(002242) , Zhejiang Supor Co.Ltd(002032) ; (2) Pay attention to Hisense Visual Technology Co.Ltd(600060) , equity reform catalysis + laser TV volume + products going abroad; (3) Emerging household appliances with high prosperity include Ecovacs Robotics Co.Ltd(603486) , Beijing Roborock Technology Co.Ltd(688169) , Chengdu Xgimi Technology Co.Ltd(688696) , Marssenger Kitchenware Co.Ltd(300894) .
Fundamentals: affected by the high base in January and the advance of the Spring Festival, white electricity retail fell year-on-year. Real estate data: from January to December 2021, the sales area of commercial housing in China increased by 1.9% (compared with the same period of 19 years + 4.6%) compared with the same period of 2020, and the single month in December 2021 decreased by 15.6% compared with the same period of 2020. Specifically, the growth rate of second tier cities stabilized, while the pessimism of third and fourth tier cities further fermented. Although the policy level made more positive statements in the month, it still takes time for the confidence of the industry to recover. At present, real estate enterprises and buyers are generally in a wait-and-see state, resulting in the downturn of real estate sales and investment in the second half of 21 years. From January to December, the completed area of houses was + 11.2% year-on-year, of which + 0.8% year-on-year in December, and the completion was still tenacious.
Production and sales of household appliances: (1) air conditioners: in terms of delivery, 13.31 million household air conditioners (yoy-5.3%) were shipped in January, including 5.59 million domestic sales (yoy-9.3%). The epidemic occurred in many places from time to time in January, and the retail demand was flat; In January, 7.73 million air conditioners (yoy-2.1%) were exported. Although it decreased slightly year-on-year, the absolute volume remained high. Retail end: in January, the volume / volume of air-conditioning omni-channel retail sales was - 30% / - 26% year-on-year, and - 19% / - 23% respectively compared with the same period in 2019, mainly due to the advance of this year's Spring Festival and other factors. In terms of price, the average price of the industry has been positive year-on-year since 20q4, and the online / offline price maintained growth in January, with a year-on-year increase of + 8% / + 7% respectively; (2) Chef's electricity: in January, the omni-channel retail volume / volume of range hood was - 19% / - 14% year-on-year, and - 17% / - 1% year-on-year; (3) Refrigerators & washing machines: the volume / volume of refrigerators in January was - 7% / - 4% year-on-year, up + 7% / + 13% year-on-year, and the retail volume / volume of washing machines in January were - 16% / - 18% year-on-year, up - 7% / - 10% year-on-year. (4) Clean appliances: in January, the sales volume / volume of all channels of clean appliances were - 13% / + 6% year-on-year respectively, the online retail volume / volume was - 13% / + 6% year-on-year respectively, and the offline retail volume / volume was - 18% / + 1% year-on-year. The price reduction trend continued.
Risk analysis: real estate sales are less than expected; The cost of raw materials has risen sharply; The local currency appreciated sharply.
