The Zhitong Finance App learned that China Merchants Securities released a research report saying that white power export sales are showing a clear improvement trend with inventory reimbursement support, focusing on recommending Hisense Home Appliances (000921.SZ), Midea Group (000333.SZ), Gree Electric (000651.SZ), Dunan Environment (002011.SZ); small home appliance brands go overseas, OEM orders continue, and clean, small kitchen appliances and tools focus on recommending Stone Technology (688169.SH), Supor (002032.SZ), and Superstar Technology (004.4SZ) Z), OEM recommended Dechang Co., Ltd. (605555.SH), Biyi Co., Ltd. (603215.SH), Xinbao (002705.SZ); shows that the industry chain focuses on market opportunities under miniLED TV technology changes, and it is recommended to seize downstream brands Hisense Video (600060.SH), TCL Electronics (01070), and LED Upstream Zhaochi Co., Ltd. (002429.SZ).

The main views of China Merchants Securities are as follows:

White power: Strong domestic sales+improved export sales, focusing on dividend rates+steady growth strategies. Home appliance leaders Midea Group, Gree Electric, Hisense Home Appliances, and Hisense Video currently have dividend rates of 5%-6%. Driven by the domestic sales boom in air conditioning in '23, white electricity generally has strong fundamentals. Looking ahead to a clear trend of improving export sales in '24, inventory reimbursement supports high order growth, multiple categories of domestic sales, sinking channels, and brand grading strategies provide resilience. Leading home appliance companies generally contribute to double-digit performance growth certainty, superimposing continuous share buybacks and rolling equity incentives to ensure strategic strength. In the fourth quarter, we expect Midea Group's revenue to increase 10% year on year, and performance up 10%-15% year on year; Gree Electric's revenue will increase 5%-10% year on year, and performance will increase 11%-48% year on year; Hisense home appliance revenue will increase 5%-10% year on year, and performance will increase 10%-15% year on year; upstream component Dunan Environmental revenue performance will increase 5% year on year, respectively

Small household appliances: recovery in overseas demand+channel inventory recovery. The cleaning category in the export chain focuses on recommending Stone Technology. On the one hand, the company's overseas market share continues to expand with outstanding product strength and steadily increasing brand power. The flagship model S8 MAX and the mid-high-end Q Revo series were released at CES in January to further enhance product strength. On the other hand, the domestic market achieved an increase in share through excellent product performance and a finely covered product matrix. We expect the company's fourth quarter performance to increase 125% year on year; in the short term, due to increased price competition in the domestic cleaning market, profits will continue to be pressured. Profit fell 30% year on year; in terms of small kitchen appliances, the inventory removal cycle of overseas retailers ended, and the third quarter began to effectively support the rapid recovery of export to corporate revenue. The industry boom continued in the fourth quarter, compounding the impact of a low base. It is expected that export sales to enterprises will continue to benefit, but the overall demand in the domestic sales market will continue to be under pressure. We expect Xinbao's revenue to increase 30% year on year, profit up 80% year on year. Supor's revenue increased 15% to 20% year on year, profit increased 5%-10% year on year, and Joyang shares revenue increased 10% year on year. The performance of new hair dryers is impressive. Revenue is expected to increase by 10-15% year on year in the fourth quarter; in the tool sector, based on overseas inventory recovery and the improvement of the real estate cycle of the Federal Reserve's interest rate cuts, we continue to be optimistic about the tool industry beta. Driven by Black Friday Christmas, Home Depot's November-December terminal sales improved year on year. Hand/power tools increased 4-5% year over year, and garden tools increased by double digits. In December, the annualized sales of new homes were 664,000 households, higher than the forecast of 649,000 households. Interest rates on 30-year mortgages fell from 7.6% month-on-month to 6.6%. In terms of inventory, the removal of power tools and tool cabinets has ended, and garden tools have entered the storage cycle. The focus is on recommending Superstar Technology. We expect the company's revenue to increase 20% year-on-year and performance to increase 50% year-on-year in the fourth quarter.

Display: MiniLED penetration rate is increasing rapidly, leading brands continue to increase investment. According to statistics from Aowei Cloud Network, in 2023, the domestic MiniLED TV retail sales penetration rate increased by 1.8 pct to 2.9% year on year, and the retail sales penetration rate increased by 5.4 pct to 9.8% year on year, all far exceeding the OLED penetration rate in the same period and the trend diverged. With the rapid expansion of Chinese brands in the MiniLED field, Japanese and Korean brands such as Samsung, LG, and Sony have also announced that they will increase their investment in MiniLED. The global penetration rate is expected to continue the 23-year rapid upward trend in 2024. Domestic brands are expected to use the advantages of a mature domestic supply chain+wide-coverage product matrix to continue to fulfill the logic of increasing global share+brand upgrade. Hisense Video's revenue is expected to increase 10% year-on-year in the fourth quarter, and performance will increase 0% to 10% year over year. In addition, the midstream and upstream focus on recommending Zhaochi shares in the entire industry chain. On the one hand, the company is expected to fully benefit from this round of miniLED backlight module production capacity with the world's top three miniLED backlight module production capacity. On the other hand, as a leading global COB display manufacturer, the company is expected to continue to benefit from the industry trend of increased COB penetration in the display industry. We expect the company's revenue to increase by 20%-30% year-on-year and 40% year-on-year increase in performance in the fourth quarter.

Kitchen lighting: favorable real estate policies are continuously being strengthened, and completion supports overall demand. Since the third quarter, favorable real estate policies have continued to increase. The area completed in January-December increased 22.6% year-on-year. After that, leading kitchen appliances and lighting sector leaders with strong real estate attributes were introduced, and “three major projects” policies such as superimposed guaranteed housing were gradually implemented. Q4 on the completion side continued the Q3 recovery trend. The completed area of residential buildings increased 12.7% year-on-year in a single quarter, and the area completed in January-December increased 22.6% year on year. Later, leading kitchen appliances and lighting sectors with strong real estate attributes also continued to improve year-on-year in revenue and performance. We expect the boss's revenue from electrical appliances to increase by 10% year-on-year. Performance increased 40% year on year; in the electrical lighting sector, Bull Group's revenue performance all increased 15% year on year, and OP Lighting's performance increased 5% year on year.

Risk warning: Industry demand falls short of expectations, raw material prices & exchange rates fluctuate greatly, and the competitive landscape deteriorates.