Appliances stimulate relay energy subsidies or cover "ice wash empty"

The home appliances industry, which has already tasted a stimulating stimulus from consumption, is currently in the exit period of the old policy, and the high-speed growth has stopped suddenly for several consecutive years.

The same is true of home appliance stocks. The three policies of home appliances to the countryside, trade-in replacement, and high-efficiency air-conditioning subsidies have driven home appliance stocks to develop rapidly for two consecutive years. However, with the gradual withdrawal of policies, home appliance stocks have ended the upward trend in the second half of 2011, and the trend is obviously weaker than the broader market. In this context, the market is more likely to expect the introduction of follow-up policies in the short term.

Some market participants speculated that the new subsidies for high-performance household appliances and subsidies for low-income people are more likely to be launched. If the policy can be launched in the first quarter, it is expected to bring a bottoming out in the first quarter of 2012 of the home appliance sector.

Safe housing as a stimulus point for home appliances

Recalling the previous round of consumer stimulus, the pilot home appliance policy to rural areas started in 2007 has opened up the current round of home appliance stimulus policies, making the home appliance industry strongly maintain a four-year rapid growth, in the home appliances sales to the countryside, several domestic Large-scale home appliance companies have laid their own channels in third-tier cities and rural areas, laying the foundation for subsequent industry competition. The top three companies in the sales of home appliances to the countryside were Haier Group, Hisense Group and Midea Group, and all three major group companies have corresponding A-share listed companies.

At present, it is the exit period of the home appliance stimulus policy that the rapid growth of home appliance sales has ended, and it has begun to show itself in the fundamentals of listed companies. Rumei Electric's operating revenue in the first three quarters of 2011 decreased year-on-year, and Hisense’s revenue growth rate also declined significantly. The trend of the market is also the same, the home appliance sector has ended its upward trend since the second half of 2011, and the trend is weaker than the broader market. Undoubtedly, in order to have good development in the short term, the new policy stimulus is a timely rain for the home appliance industry.

Everbright Securities believes that the stimulus policies for the home appliance sector are likely to focus on subsidies for energy-efficient home appliances and subsidies for low-income people. Among home appliances, products that have been subsidized are energy-efficient fixed-frequency air conditioners, and the subsidy products being implemented include motors and lighting. The refrigerators, washing machines, inverter air conditioners, color TVs and other home appliances are likely to carry out corresponding energy efficiency subsidies in the future. The subsidies for low-income people are likely to combine with the demand for home appliances driven by affordable housing, stimulating the consumption of low-end home appliances. Guotai Junan stated in the research report that the current trade-in policy has expired and the TM management system has announced that it will not be closed for the time being. Therefore, the policy is likely to continue. It may need to fine-tune terms of supervision and dismantling treatment, and may be related to energy-saving subsidies. And so on.

Energy-saving subsidies or coverage of "ice-washed electricity"

Whether it is to continue the trade-in policy, expand the product range of energy-saving subsidies, or subsidize low-income people, based on past experience, it will stimulate sales of home appliances in the short term. However, in the long term, Shanghai-based brokerage researcher is pessimistic. The researcher told the “Daily Economic News” reporter that the policy's pull on product sales can only be short-term and should not be overly optimistic. Overdraw consumer demand promotes short-term growth. What should I do after the end of the period? In fact, the policy of home appliances going to the countryside has also supported a large number of small brands, all of which are competing for the rural market. This is not entirely a good thing for several major leading home appliance groups. For the consumption stimulation of low-income people, it is still too early to focus on the demand for home appliances brought by the security housing. The earliest guarantee room occupancy time is estimated to be 2013.

"Of course, if you look at the short term, policy stimulus will certainly bring about excitement," said the researcher.

In energy-saving subsidies, the industry’s general view is that the subsidized products are inverter air conditioners, color TVs, and ice-washers. Therefore, related leading companies will generally benefit, among which the more prominent ones will be Hisense Electric and Sanhua. “Hisense” is the leading brand of domestic inverter air conditioners and color TVs, but the main product of the listed company Hisense Electric is TVs, which may not be able to benefit from the benefits of inverter air-conditioner subsidies. In terms of color TVs alone, the impact of energy-saving subsidies is not small. According to the above-mentioned researcher, the energy-saving and high-efficiency aspects of household appliances, the air-conditioner and refrigerators have less room for upgrading, and the focus is on the space for color TVs.

The main business of Sanhua is the sale of air-conditioning components. Under the stimulation of the old industry policy, the company’s domestic and international sales ratio has been tilted to the domestic market. If new stimulus policies are introduced, it will be the leading air-conditioning component of the A-share market. Flower shares will be the largest indirect beneficiaries.

Large shareholders increase their holdings to bring back expectations

Everbright Securities believes that if the new home appliance consumption stimulus policy can be launched in the first quarter of 2012, taking into account the gradual penetration of policy effects, it is expected to have a significant positive effect in the second half of the year. Taken together, the new stimulus plan is expected to make the fundamentals of the home appliance industry bottom out in the first quarter of 2012 and pick up in the second half of 2012.

The trade-in subsidies for old appliances and low-income people are all inclusive policies. In the short term, the entire household appliances sector will benefit. However, it is worth noting that from a historical point of view, the response of the home appliance sector to the effects of the policy has been lagging behind. In the case of a policy determination, it is possible to choose a relatively high-end listed company for product positioning, such as Qingdao Haier, which mainly operates refrigerators and washing machines. Gree main electrical inverter air conditioner, the main products for the washing machine Hefei Sanyo and so on.

Interestingly, at the end of 2011, Hisense Electric and Midea’s major shareholder had just completed the plan to increase shareholdings, and the major shareholder of Hisense Electric increased its holdings of 12.86 million shares in the past year, accounting for 1.48%; It is a rapid movement. The original plan was to increase the shareholding within one year to no more than 2%. As a result, in just a few days, it had bought a total of 67.57 million shares of the company's shares from the secondary market, accounting for about 2%. The plan to increase shareholding by major shareholders is seen by the industry as the expectation of the reversal of the home appliance sector.