Key investment points
We will firmly expand domestic demand and suggest paying attention to the opportunities for consumption upgrading in the sinking market
1) in the 2022 government work report issued by the State Council, it is proposed to promote the continuous recovery of consumption, increase residents’ income through multiple channels, improve the income distribution system and improve consumption capacity. Promote the deep integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consumption, promote the recovery of life service consumption, and develop new consumption formats and models. 2) At the same time, the State encourages local governments to carry out green smart appliances to the countryside and trade in the old for the new, and proposes to improve the construction of rural e-commerce, which we believe will further stimulate the sinking market demand. 3) At the same time, we suggest paying attention to the upgrading trend of household appliance consumption in the sinking market. According to the data of China household appliance market report in 2021, the retail sales of washing machines above 10000 yuan in the fourth to sixth tier markets are + 163% year-on-year, the retail sales of high-end refrigerators above 8000 yuan are + 105%, the retail sales of color televisions above 8000 yuan are + 142% year-on-year, and the retail sales of air conditioners above 8000 yuan are + 37% year-on-year, The growth rate was higher than that of first tier cities such as Beijing, Shanghai and Guangzhou.
The marginal relaxation signal of real estate policy is obvious, which is good for large household appliances with strong post cyclical attributes
1) this government work report puts forward the “three stabilities” (stabilizing land price, housing price and expectation) for the real estate policy, adheres to the positioning of “real estate without speculation”, explores the new development mode of real estate, develops both rent and purchase, and fully implements the long-term mechanism. The marginal relaxation signal of real estate policy is obvious. 2) Under the general tone of “housing without speculation” and realizing the virtuous cycle and healthy development of the real estate industry, all aspects of reasonable housing needs such as rigid demand and improvement have been paid attention to. Recently, many cities have reduced the down payment ratio to 20%, lowered the mortgage interest rate, accelerated the pace of mortgage lending, and the recovery of policies is expected to drive the marginal improvement of real estate and the consumption demand of household appliances. White electricity and kitchen electricity with strong post cyclical attributes of real estate are expected to benefit.
Urban rural integration + new urbanization to accelerate the replacement and penetration of household appliances
1) the 2022 government work report pointed out that promoting urban-rural integration and new urbanization. The increase of urbanization rate releases new demand for household appliances, urban-rural integration improves the quality of life of rural population, and stimulates consumers’ demand for urban household goods such as range hoods. 2) In 2022, the government will improve the quality of new urbanization, carry out the investigation and rectification of potential safety hazards of old buildings and facilities, and then start the transformation of a number of old urban communities. We believe that the transformation of old houses will create new demand for the purchase of household appliances.
Risk tips
Less than expected consumption demand; Macroeconomic downturn
