Key investment points:
Market review: this week, the home appliance (CITIC) industry index fell by 5.79% this week, and the overall performance was poor. The weekly increase ranked second to last in the CITIC primary industry index, beating the CSI 300 index by 3.81 percentage points in the same period. This week, the overall performance of the electronics industry was poor, and all the electronics industries recorded negative returns. Except for the black household appliances sector, the other sub sectors lost the CSI 300 index. Individual stocks: the performance of individual stocks in the home appliance (CITIC) industry was average this week, with 15 stocks recording positive earnings, accounting for about 19%, and 5 stocks with a weekly increase of more than 5%; Only 60 stocks in the home appliance (CITIC) industry recorded negative returns this week, accounting for about 76%, including 22 with a weekly decline of more than 5% and 2 with a weekly decline of more than 10%. Valuation: as of January 14, 2022, the overall PE (TTM) of the home appliance (CITIC) industry was about 18.64 times, down 5.66% from last Friday, falling below the average valuation level of the industry since 2017; The ratio of overall PE (TTM) of home appliance (CITIC) industry to Shanghai and Shenzhen 300pe (TTM) is 1.44 times, falling below the average level of relative valuation of the industry since 2017.
Industry operation data: in December 2021, integrated stoves and dishwashers performed better offline, while clothes dryers and floor sweepers Siasun Robot&Automation Co.Ltd(300024) performed better in all channels. According to the on-line and off-line monitoring data of Aowei cloud network, in December 2021: (1) ice washing color: only the omni-channel sales of freezers and dryers are good, and the performance of traditional ice washing is general. (2) Kitchen power: the retail sales of offline integrated stoves performed well, and the retail sales of dishwashers maintained a rapid growth, which was improved compared with November. (3) Small household appliances: the overall performance was poor, with offline retail sales down 21.4% and online retail sales down 20.9% year-on-year. (4) Environmental health appliances: the performance of most categories was average, and the performance of sweeping Siasun Robot&Automation Co.Ltd(300024) was better than that in November.
Industry perspective: maintain the recommended rating of the industry. In 2022, the theme of China’s economy is stable growth. At present, the real estate fundamentals are expected to improve. The overall household appliance industry is still at a relatively low valuation level, and the cost performance of phased configuration is still high. In terms of traditional household appliances: Although the saturation of traditional categories is high, the leading enterprises with strong brand effect and product competitiveness are expected to continue to grow in scale through product structure optimization and brand high-end. Focus on the three leading white power enterprises, Midea Group Co.Ltd(000333) (000333), Haier Smart Home Co.Ltd(600690) (600690), Gree Electric Appliances Inc.Of Zhuhai(000651) (000651). In 2022, the demand of China’s home appliance market still exists, and the penetration rate of some emerging categories of home appliances is still in the stage of rapid improvement. It is recommended to continue to pay attention to Zhejiang Entive Smart Kitchen Appliance Co.Ltd(300911) (300911) with the rapid expansion of the scale of the integrated stove, Zhejiang Sanfer Electric Co.Ltd(605336) (605336) with the gradual release of the production capacity of the integrated stove, and Shenzhen Breo Technology Co.Ltd(688793) (688793) with the Intelligent Portable Massager faucet.
Risk tip: the impact of uncertainty in epidemic prevention and control on consumers and industries; The impact of real estate cycle fluctuation; Upstream raw material price fluctuation risk; RMB exchange rate fluctuation risk, etc.
