Main points
This week, the household appliance sector rose by - 2.4%, of which the white electricity / Black electricity / kitchen electricity / small household appliances sector rose by - 3.4% / - 1.2% / - 0.7% / + 0.8% respectively. The price of raw materials rose, and the prices of LME copper, LME aluminum, steel and plastics increased by + 0.3%, + 6.0%, + 0.8% and + 1.6% month on month respectively.
The United States resumed 352 tariff exemptions for Chinese imports, involving a number of household appliances. The tariff exemption involves 352 of the previous 549 pending products. This provision will apply to goods imported from China between October 12, 2021 and December 31, 2022. The corresponding products will be exempted from tariff before the end of 2022, and the tariff paid since October 12 last year will be refunded. In terms of household appliances, the categories covered by this exemption mainly include cleaning appliances (floor sweeping Siasun Robot&Automation Co.Ltd(300024) , vertical vacuum cleaners), air purifiers, electric heaters and other environmental appliances, air fryers, vertical freezers, etc. the tariff rate of most categories is 25% before this exemption.
Among the subjects related to the exempted categories, the cost side pressure of 2C enterprises will be relieved, thus driving the improvement of profitability; 2B enterprises are expected to enhance OEM competitiveness; Cross border small household electrical appliance enterprises with a high proportion of export business to the United States will directly benefit. Related targets of 2C in the small household appliance sector include vesync, JS global life, Ecovacs Robotics Co.Ltd(603486) and Beijing Roborock Technology Co.Ltd(688169) , among which vesync and JS global life account for a relatively high proportion of income in the United States and will focus on benefiting. According to our calculation, the effect of this exemption on the overall gross profit margin of vesync and JS global life is about 3-4pct and 1-2pct respectively Ecovacs Robotics Co.Ltd(603486) export to the United States accounts for about 12% of the total revenue, and Beijing Roborock Technology Co.Ltd(688169) revenue to the United States accounts for about 10%. According to our calculation, the tariff exemption will boost the gross profit margin of Ecovacs Robotics Co.Ltd(603486) , Beijing Roborock Technology Co.Ltd(688169) by about 1PCT, and help the leading enterprises of floor sweepers speed up the process of going to sea.
2B related objects include Biyi Co., Ltd., an air fryer OEM enterprise; Clean electrical OEM Kingclean Electric Co.Ltd(603355) ; ODM faucet for small household appliances Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) etc. The income of Biyi shares affected by the tariff increase accounts for 20%. Biyi shares, Kingclean Electric Co.Ltd(603355) and Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) and other OEM enterprises indirectly benefit from the tariff exemption, and their bargaining power will be improved.
Investment advice
Faced with many uncertainties in the external environment such as raw materials and shipping in 2022, it is recommended to select tracks with strong certainty. It is suggested to grasp two main lines: 1) emerging home appliance tracks with both growth and certainty, including floor sweepers, integrated stoves and projectors; The performance of the first quarter continues to be verified, and it is recommended to actively layout at this stage. Focus on Ecovacs Robotics Co.Ltd(603486) , which accurately grasp the needs of consumers, adhere to independent research and development, hold high and fight high, and have excellent product and brand power. The logic of improving the penetration rate of integrated stoves has been continuously verified by data, and Marssenger Kitchenware Co.Ltd(300894) , which has long-term vision of leading strategic pattern, strong brand marketing and channel power and rapid expansion of scale, is recommended. It is recommended to pay attention to the domestic intelligent micro investment leader with leading technology and all-round barriers to consumer goods Chengdu Xgimi Technology Co.Ltd(688696) .
2) demand and profit continue to repair, and white electricity and small kitchen appliances are expected to usher in an inflection point in the second quarter. There is ample room for the long-term growth of small kitchen appliances. Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) domestic sales continue to promote new products and expand categories to drive revenue growth. After the mitigation of shipping, the demand for overseas orders is expected to be released. It is suggested to focus on it. White power recommends focusing on Haier Smart Home Co.Ltd(600690) , which complies with the demand of consumption upgrading, maintains high growth, improves efficiency and governance optimization, and continuously improves profitability.
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.
