Focus 1 of this week’s research: looking at the industry trend from the household appliance consumption stimulus policy
In recent years, China’s household appliance consumption has been stimulated by relevant policies. At the national level, the epidemic situation in many places in China has continued recently, and the category of household appliances is the field with great impact on the demand in the epidemic situation. Therefore, since 21 years, the State Council has added more weight to the consumption promotion policy, and the policy is more targeted. The Household Appliance Subsidy Policy adopts the strategy of adjusting measures to local conditions; At the local level, home appliance subsidies have been held for more than 20 years to promote home appliance consumption, mostly for the sales behavior of home appliance manufacturers and home appliance Ka; With the clear direction of national policies, many local governments began to dominate the issuance of local consumption vouchers, and the category end gradually shifted to cars and household appliances. The categories of household appliances covered by the subsidies are mostly major household appliances (white TV, kitchen TV and color TV); In April 22, Beijing issued a policy to promote green and energy-saving consumption. From April to September this year, Beijing green and energy-saving consumption vouchers of more than 300 million yuan will be issued to consumers in Beijing. The coverage will be extended to emerging household appliances, with large discounts, which is of exemplary significance.
We expect that all parts of China are expected to gradually strengthen the activities of using consumer vouchers, replacing old ones with new ones and sending household appliances to the countryside, and the categories of household appliances will be gradually transferred from household appliances to emerging household appliances, so as to promote the renewal of household appliances and the release of new demand. On the category side, with the easing of the epidemic in China and the continuous landing of household appliance consumption stimulus, we expect that China’s major household appliances with high penetration (such as air and ice washing, smoke stove and color TV), major small household appliances (such as rice cookers and microwave ovens) and emerging categories with relatively low retention (such as floor sweepers and projectors) are expected to benefit.
In addition, considering the recent efforts of the national ministries and commissions to expand effective supply of green and low carbon consumer products, improve the recycling system of waste automobiles and household appliances, and encourage the development of new modes of “Internet plus recycling” and other new initiatives, we expect this year to become a year of transformation of China’s household electrical appliance manufacturing industry to a comprehensive green energy saving, with the increasing awareness of consumers’ environmental protection and energy saving. The energy-saving household appliances listed in the list of green household appliances are expected to become the main sales force, which is good for the sales volume of relevant enterprises.
Focus 2 of this week’s research: the impact of the resumption of exchange rate on the income and performance growth of household appliance enterprises
In the four trading days from April 19 to 22, 22, the onshore and offshore RMB fell sharply against the US dollar, both reaching a new low since August 2021. Among them, the onshore RMB depreciated 1331 basis points against the US dollar, closing at 6.50 on April 22; More reflecting the expectations of international investors, the offshore RMB depreciated by more than 1485 basis points against the US dollar, closing at 6.53 on April 22. Reflected in the level of commodity trade involving foreign exchange settlement, for enterprises with high proportion of export business, on the premise that the RMB has strong toughness and will not depreciate significantly, the RMB will depreciate to a certain extent. For some foreign trade enterprises with production factors in China, it will enhance the competitiveness of export commodities to a certain extent. We sorted out the core household appliance targets whose export revenue accounted for more than 30% disclosed in the latest new year’s report period, and compared their gross profit margin and net profit margin from 2016 to 2021 with the trend of RMB against the US dollar during the year. Results obtained:
From 2016 to 2021, the profitability of most household appliances with overseas business accounting for more than 30% improved year-on-year in the year of RMB depreciation, and the profitability was under pressure in the year of RMB rise. Among them, the trend of gross profit margin of Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) (20-year export accounts for 77.1%) and Kingclean Electric Co.Ltd(603355) (20-year export accounts for 69.5%) with high export sales is completely consistent with the direction of exchange rate change. In addition, we believe that there is a great difference between the profitability of household appliance enterprises and the trend of exchange rate from 2020 to 2021, mainly because the impact of the epidemic on terminal demand and the impact of rising raw material prices on costs in the past two years are the main factors affecting the profitability of enterprises.
Trend of household appliance sector this week: this week, the CSI 300 index was – 4.19%, the gem index was – 6.66%, the SME board index was – 3.64%, and the household appliance sector was – 2.26%. In terms of segments, white electricity, black electricity and small household appliances rose or fell by – 1.91%, – 2.4% and + 0.27% respectively. Among individual stocks, the top five gainers this week are Jiangsu Chunlan Refrigerating Equipment Stock Co.Ltd(600854) , Beijing Roborock Technology Co.Ltd(688169) , Shenzhen Crastal Technology Co.Ltd(300824) , Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) , Bear Electric Appliance Co.Ltd(002959) ; The top five declines this week are st shenglai, Yimikang Tech.Group.Co.Ltd(300249) , Hyunion Holding Co.Ltd(002537) , Wuxi Hodgen Technology Co.Ltd(300279) , Shenzhen H&T Intelligent Control Co.Ltd(002402) .
Price trend of raw materials: on April 22, 2022, the spot settlement prices of SHFE copper and aluminum were 75010 and 21905 yuan / ton respectively; SHFE copper was – 0.91% and aluminum was + 0.39% compared with last week. Since this year, the price of copper has increased by 7.63% and that of aluminum by 8.07%. On April 23, 2022, the price index of China plastic city was 102786, up from + 0.78% last week and + 3.51% this year. On April 22, 2022, the comprehensive steel price index was 142.23, which was +0.58% compared with the price last week and +7.91% this year.
Investment suggestions: recommend [ Haier Smart Home Co.Ltd(600690) ] (China’s refrigerator / freezer business accounted for 20% of operating profit in 21 years, which may be upgraded or new purchase demand in the short term due to the continuous epidemic), [ Hangzhou Robam Appliances Co.Ltd(002508) ] (real estate + second curve), [ Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) ] (real estate + fast growth), [ Ecovacs Robotics Co.Ltd(603486) ] (cleaning faucet, peak season approaching) [ Zhejiang Supor Co.Ltd(002032) ] (fundamental recovery + overseas profit improvement, and there may be new demand for the short-term epidemic), [ Bear Electric Appliance Co.Ltd(002959) ] (fundamental recovery, and there may be new demand for the short-term epidemic), [ Guangdong Xinbao Electrical Appliances Holdings Co.Ltd(002705) ] (low base in the second quarter + exchange rate depreciation is good for exports).
Risk tips: the epidemic situation is expanding, and the real estate market, exchange rate, raw material price fluctuation risk, etc
