From the cost side, the marginal cost pressure is improved, and the profit elasticity of the sector is expected to be released. The home appliance industry has experienced two cycles of rising raw material costs. In this cycle of rising raw materials, the profitability of small home appliance companies has declined the most, mainly due to the triple factors of base change, weak demand and rising raw material costs. We judge that the high probability of 21q4 is the bottom of the performance growth of small household appliance companies, and the performance growth of white power companies is expected to improve month on month. With the normalization of the epidemic situation in 2022, the consumer side is expected to improve marginally. At the same time, considering that many home appliance companies have achieved month on month improvement in 21q3 domestic gross profit margin, the subsequent decline in raw material costs is expected to bring greater profit elasticity.
From the policy side, the real estate policy is expected to be marginal relaxed, and the sector valuation elasticity is expected to be released. According to the real estate completion and sales data, the completed area of real estate has improved significantly in stages, and the decline slope of sales area continues to slow down, which is expected to support the domestic demand of household appliances. The lagging demand of real estate in 22 years will strongly support the domestic sales of household appliances; After combing the recent real estate policy, we find that the real estate policy continues to be marginal loose, and the debt problems of some real estate enterprises appear. Although the general direction of “trust but not action” of the regulators will not change, it is expected that the real estate policy will continue to be marginal loose in 2022, and the valuation of real estate post cycle sectors such as kitchen electricity and white electricity is expected to be repaired.
From the trading side, the valuation and position of the home appliance sector are in the historically low quantile. From the perspective of P / E quantile, as of January 7, 2021, the P / E ratio of individual stock markets in various sectors of household appliances is basically at a low level in the historical quantile, and the P / E quantile of 15 of the 21 Household Appliance stocks is lower than 50%; From the perspective of heavy holdings of funds in the home appliance sector, the market value proportion of heavy holdings of funds in the 21q3 home appliance sector is the lowest in history, and the stock market value proportion of heavy holdings of funds in the 21q3 industry wide home appliance sector is 1.4%.
Investment suggestion: under the resonance of cost cycle + real estate cycle, the performance growth rate of the sector is relatively certain. Superimposed on the impact of the current valuation and the low quantile of institutional positions, the home appliance company is expected to achieve the resonance of performance and valuation in 22 years. Recommend [ Midea Group Co.Ltd(000333) ] with steady operation and diversified business in white power sector; Increasing efficiency and reducing fees [ Haier Smart Home Co.Ltd(600690) ]; Steady progress has been made in channel reform, and the strong position of the industrial chain has been further consolidated [ Gree Electric Appliances Inc.Of Zhuhai(000651) ]; Recommend [ Hangzhou Robam Appliances Co.Ltd(002508) ] with risk release in kitchen electricity sector and strong performance in emerging categories; Focus on the small household appliance sector, which has the triple dividend of internal management adjustment and improvement + channel reform + category expansion [ Zhejiang Supor Co.Ltd(002032) ].
Risk tip: the continued high price of raw materials affects profitability, weak end consumer demand, exchange rate fluctuations and rising sea freight
