This week's view: when we mention "home appliances to the countryside", white electricity, kitchen electric faucets and small household appliance companies are expected to benefit
On December 8, 2021, Wu Xiao, director of the rural economy Department of the national development and Reform Commission, said at the regular policy briefing of the State Council, "encourage qualified areas to carry out the renewal of rural household appliances, implement furniture and home decoration subsidies and a new round of cars to the countryside, and promote the renewal of durable consumer goods for rural residents".
We believe that the current round of "home appliances to the countryside" policy stimulus will be different from the previous two rounds:
The renewal of rigid demand household appliances will focus on high energy efficiency, and the white electricity faucet is expected to benefit. Stimulated by the first two rounds of "home appliances to the countryside" policy, the penetration rate of China's rigid demand major TV sets has been high. By 2020, the rural ownership of air conditioners, refrigerators, washing machines and color TV sets has reached 73.8, 100.1, 92.6 and 117.8 units / 100 households respectively. The service life of large household appliances is usually 8-10 years. The last round of large-scale popularization of "household appliances to the countryside" mainly occurred in 2008-2011. Therefore, it is currently in the middle and late stage of power generation. Combined with the "double carbon" policy background, it is expected that the renewal of just needed household appliances will focus on energy-efficient products, and the white power leader is expected to benefit from its technology and product advantages.
The promotion of optional household appliances may be accelerated to pry open the increment for small household appliance companies and kitchen faucets. In the first two rounds of "home appliances to the countryside" policy, the subsidy categories are mainly just needed household appliances. Under the current situation of high penetration rate, combined with the "common prosperity" policy and the consumption upgrading trend, it is expected that the promotion and penetration of optional household appliances may be accelerated, which has been reflected in the subsidy policies of some provinces and cities since 2019. For example, Xi'an will put dishwashers The first-class energy-efficient products such as steamers, ovens and floor sweepers are included in the list, and subsidies ranging from 100-500 yuan are given. However, the consumption potential of the vast consumer market with a population of more than 500 million in China's rural areas has not been fully released. Through the promotion of the policy of "home appliances to the countryside", optional home appliances will significantly reduce the time and cost of consumer education in rural areas, and small home appliance companies and kitchen electric faucets may use this to pry open the incremental market.
Plate view
White electricity sector: the main support for white electricity repair comes from: 1) the pressure on the high base caused by the epidemic in 2020 is gradually weakened, 2) the price rise trend of bulk commodities is alleviated, 3) the rise of shipping prices is stopped and stabilized, and 4) the trend of high-end consumption is gradually becoming. However, it is still plagued by long-term factors: 1) macroeconomic downturn; 2) Weakening of real estate pull, etc. In contrast, in the short term, the supporting factors have a direct and effective impact on the operating results of white power enterprises, and the short-term profitability of white power leaders can be repaired.
In the medium and long term, China's white power market has gradually transformed into a stock competitive market dominated by renewal demand. Under this background, we are more optimistic about the deep barriers built by white power leaders in terms of brand, channel, R & D, management and other underlying basic capabilities. We believe that in the continuous innovation category of white power, we can rely on accumulated advantages to achieve the strength of the strong. At the same time, the white power leader with excellent product power, mature supply chain and rich overseas operation experience has the opportunity to improve the overseas market penetration, and the overseas market space is broad.
Kitchen electricity sector: the overall demand of kitchen electricity sector is weak, but there is differentiation among sub sectors: in terms of traditional kitchen electricity, the sales of range hood / gas stove in September were - 6.9% / - 8.7% year-on-year respectively; In terms of emerging kitchen appliances, the sales of integrated stoves / dishwashers in September were + 2.5% / + 5.6% year-on-year respectively. Xinxing kitchen appliances mainly benefited from the low penetration rate and consumption upgrading trend, and still maintained a good growth momentum. In September, the online and offline sales of integrated stoves were + 0.7% and + 54.9% year-on-year respectively, and the average prices of online and offline were + 30.4% and + 15.7% year-on-year respectively. The obvious increase in average prices online or offline inhibited the release of demand, Under the background of epidemic disturbance and slowdown of real estate growth, offline still maintained high-speed growth, showing a good demand foundation for this category.
Clean electrical appliances: under the industry characteristics of low stock and demand determined by supply, the frequent emergence of new products plays a great role in promoting the penetration of floor sweepers and floor washers. Beijing Roborock Technology Co.Ltd(688169) launched the new self-cleaning sweeper U10 and washer G10 with mop on August 25, Ecovacs Robotics Co.Ltd(603486) launched the new sweeper Dibao X1 with self-cleaning + self dust collection + self drying on September 15, and Yunjing launched the second generation of new sweeper J2 with self-cleaning + self changing + self drying on September 25. These new products have significantly improved in product performance and industrial design compared with the past, In line with the current consumption upgrading trend, it is expected to further stimulate terminal sales. At the same time, the rapid volume of the floor washing machine also attracted Midea, lake, Jiuyang, Zhejiang Supor Co.Ltd(002032) and other enterprises to follow up quickly. In the second half of the year, more enterprises may launch relevant products, and the high-profile and strong certainty of the emerging clean electrical appliance sector such as the floor washing machine.
Investment advice
It is recommended to pay attention to white power leaders Haier Smart Home Co.Ltd(600690) , Midea Group Co.Ltd(000333) , Gree Electric Appliances Inc.Of Zhuhai(000651) whose competition pattern is continuously optimized and whose profitability is expected to be repaired in the second half of the year.
It is recommended to focus on the integrated stove leader Marssenger Kitchenware Co.Ltd(300894) with continuous optimization of product structure and steady expansion of multiple channels, as well as the integrated stove leader Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) that comprehensively promotes the improvement of products, brands, channels and management.
It is recommended to pay attention to the Siasun Robot&Automation Co.Ltd(300024) leader Ecovacs Robotics Co.Ltd(603486) of sweeping with outstanding comprehensive advantages and building the second growth pole with the help of intelligent life appliances, as well as the Siasun Robot&Automation Co.Ltd(300024) leader Beijing Roborock Technology Co.Ltd(688169) of sweeping with deep technical barriers and rapid expansion of overseas channels.
Risk statement
Macroeconomic growth is less than expected, resulting in the decline of residents' purchasing power; Severe real estate regulation has a negative impact on the demand for downstream household appliances.
