The Zhitong Finance App learned that Guolian Securities released a research report saying that since March, channel regions have successively implemented relevant plans, and Gree, the leading manufacturer, took the lead in responding, exchanging the volume for a new one and then amplifying the volume. In the dominant phase of renewal, price discounts are flexible. Although they are not comparable to going to the countryside for home appliances, the icing on the cake can be expected. Domestic and external demand in the sector has shown steady performance since the beginning of the year, and dividend valuations still have an advantage. Active layout is recommended; Baidian leaders Midea (000333.SZ), Gree (000651.SZ), and Haier (600690.SH), which benefit from the trade-in policy and have high dividends, are recommended.
The main views of Guolian Securities are as follows:
Trade-in is the most common promotion method
Full collection of accounts receivable is a necessary condition for releasing demand for renewal. Since the 2009 policy precedent, trade-in has become one of the most common promotion methods for home appliances. Compared with Gree's 22-year trade-in rules, the subsidy amount for large numbers of hangers and cabinets was increased in '24; currently, the residual value deduction amounts for the replacement of Midea air conditioners and cabinets are 270/500 yuan, respectively. At the same time, some models are offered discounts. Haier also has a corresponding replacement credit policy. There is little difference between manufacturers, and they all provide door-to-door disassembly services. Taken together, the nature of the current leading trade-in initiatives is mainly regular warm-up before the peak season.
Recycling is economical and has limited cost impact
The reference rules require “consistent disassembly addresses”. Assuming that the type and number of new and used models are the same, combined with Gree's rough estimate of the 23-year retail product structure, the new rotation subsidy amount is roughly between 5% and 9% compared to the average online/offline price discount range, which is slightly higher than that of desktop machines; on average, the average subsidy amount for corresponding stations is expected to be around 300 yuan, covering sales volume of nearly 10 million yuan. According to the China Reassociation, the current market price for recycling waste air conditioners is close to 250 yuan. Only considering the monetization of residual value, recycling through manufacturer channels is economical for consumers; however, leading recycling relies on original channel delivery capabilities and is mainly subsidized, and the impact on costs other than sales expenses is limited.
Renewal flexibility can be expected, and prices are mainly stable
From the perspective of demand elasticity, comparable samples corresponding to the subsidy margins of the current leaders' trade-in plans in the past cycle include 15Q1-Q3 and 19Q3. During this period, the demand growth rate driven by a high single-digit average price drop for leaders can reach more than double digits, and price elasticity can be expected during the renewal phase. It is worth emphasizing that in an industrial context that is very different from the previous two price downturn cycles, trade-in subsidies with little marginal change are not a sign of a shift in leading price strategies. Copper prices have continued to rise since mid-March. According to industry tracking, inventory levels in leading channels are manageable, price competition lacks necessary conditions, and the price outlook for the year is still mainly stable.
The head responds first, which is beneficial to share concentration
Under a stable oligopoly pattern, prices in the air conditioning industry have always been dominated by leading strategies; judging from the latest “Action Plan” text, under the guidance of manufacturers and sales channels as the core subsidy subjects, this round of policy cycle points to competition between manufacturers at the level of cost investment, smooth profits, and recycling and dismantling of infrastructure. The leading edge is obvious. In addition, in 2024, the waste electronic and electrical disposal fund was suspended and changed to special support from the central government. The budget size more than doubled compared to previous years, while leading manufacturers represented by GLEE/TCL/Haier all have their own dismantling capacity of 2 to 7 million units. There is a closed loop foundation to benefit from increased capital.
Risk warning: Household air conditioners have accumulated drastically, raw material prices have risen sharply, and policy implementation falls short of expectations.