Main points
This week, the household appliance sector rose by - 7.5%, of which the white electricity / Black electricity / kitchen electricity / small household appliances sectors were - 8.1% / - 6.3% / - 8.8% / - 4.3% respectively. Affected by the conflict between Russia and Ukraine, the price of raw materials fluctuated greatly, and the overall performance of the sector was weak.
Since the beginning of 2022, the prices of LME copper, LME aluminum, steel and plastic, the main raw materials, have increased by 5%, 23%, 5% and 8% respectively, and the cost side of the enterprise continues to be under pressure. The recent sharp rise in raw material prices is mainly due to the tension of the market on supply risk under the influence of the conflict between Russia and Ukraine. Russia accounts for 12%, 21%, 26% and 49% of the total global exports of oil, gas, aluminum and nickel. The situation in Russia and Ukraine is still the leading factor affecting commodity and energy prices in the short term. The raw material cost of household appliance enterprises generally accounts for more than 70%. If the raw material cost continues to rise, it will lead to continuous pressure on the enterprise performance. Continue to pay attention to the trend of commodity and energy prices under the situation of Russia and Ukraine. The impact of the conflict between Russia and Ukraine on the cost side of the household appliance industry is mainly reflected in: 1) driving the rise of energy prices and increasing the risk of production reduction of European aluminum plants; 2) Anglo American sanctions against Russia may affect aluminum exports; 3) Crude oil is the most upstream of plastics, and the price of plastics is greatly affected by the price of crude oil; 4) Nickel is used to manufacture stainless steel, and the household appliance industry belongs to the downstream industry of stainless steel. This week, due to the temporary easing of the situation in Russia and Ukraine, the price of copper and aluminum fell. The prices of LME copper, LME aluminum, steel and plastics were - 3.1%, - 9.8%, + 0.3% and + 2.1% month on month respectively.
Investment advice
Looking forward to 2022, the track with strong certainty is preferred among many uncertain factors. It is suggested to grasp two main lines: 1) white electric track with continuous repair of demand and profit. 2) Sweeper track and integrated stove track with both certainty and growth. Intelligent cleaning appliances are in line with consumers' pursuit of quality life and hands-free in the third consumption era. Floor sweeping and mopping products are expected to become the rigid needs of families. Continue to recommend Ecovacs Robotics Co.Ltd(603486) , accurately grasp the needs of consumers, adhere to independent research and development, hold high and fight high, and have excellent product and brand power. It is recommended to pay attention to the strong strength of product and technological innovation, speed up the replenishment of marketing weaknesses, and is expected to usher in Beijing Roborock Technology Co.Ltd(688169) . The logic of improving the penetration rate of integrated stoves is continuously verified, and Marssenger Kitchenware Co.Ltd(300894) , which has long-term vision of leading strategic pattern, strong brand marketing and high-end product positioning and rapid expansion of scale, is continuously recommended. It is recommended to pay attention to the integrated stove leader Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) , which has strong product power and continues to reflect the effectiveness of the change of few owners. Small household appliances sector Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) export profitability improvement and domestic sales growth increase with high certainty. The growth rate of domestic sales in 21q4 rebounded, and the export sales declined due to the impact of shipping. It is expected that the continuous promotion of domestic sales and the expansion of categories will drive the continuous growth of domestic sales revenue. After the mitigation of shipping, the demand for overseas orders is expected to be released, and 22q1 is expected to usher in a performance inflection point. The current valuation level is significantly low, so it is recommended to pay active attention.
Risk tips
Risk of rising raw material prices, risk of less than expected demand, risk of repeated epidemic, impact of exchange rate fluctuations, risk of chip shortage and price rise.
