The Zhitong Finance App learned that Guotai Junan released a research report saying that according to data from the Overseas General Administration, from January to February 2024, the overall export sales/sales volume/year-on-year ratio of home appliances was +20.8%/+38.6%, exceeding China's overall export sales growth rate (+7.1%). Benefiting from inventory replenishment and recovery in terminal demand, home appliance export orders increased due to the low base effect, and related export companies also benefited relatively. Short-term export orders are booming, and the long-term trend of going overseas has been established. On a short-term basis, benefiting from channel inventory replenishment and the recovery in terminal demand in some regions, export companies are expected to perform well in Q1 under the low base effect.

Guotai Junan's views are as follows:

Short-term export orders have increased, and a long-term overseas trend has been established.

Looking at the Q1 subregion, overall export sales of household appliances were superior to domestic sales, and exports showed a booming trend. According to data from the Overseas General Administration, from January to February 2024, the overall export sales/sales volume/year-on-year ratio of home appliances was +20.8%/+38.6%, exceeding China's overall export sales growth rate (+7.1%). Benefiting from stock replenishment and recovery in terminal demand, the export orders for home appliances increased rapidly under the low base effect, and related export companies also benefited relatively. In the long run, brand companies have plenty of space to go overseas through the advantages of product strength, manufacturing power, and channel layout.

Expectations of policy stimulus have resurfaced, and domestic demand is expected to boost.

Since the beginning of 2024, the overall growth in online sales of home appliances has been good, with sales of major appliances such as air conditioners/refrigerators/color TVs +33%/+19%/+25% year-on-year. The State Council recently issued the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In” to encourage home appliances to carry out trade-in activities. After the introduction of the last round of nationwide stimulus policies, the main sales of household appliances have entered a general renewal cycle, and the implementation of the national policy is expected to form a joint effort to better drive the desire to renew the vast market (rural areas+third- and fourth-tier cities); leading companies with leading multi-category and multi-brand layouts are more likely to gain market share.

Judging from the performance of the Q1 report, leading companies in export sales have the upper hand, and the white power and related industry chains are superior.

1) Revenue side: Companies with leading export sales are more dominant; 2) Performance side: Companies with superior patterns are more stable. Overall, we judged the performance ranking of each segment in Q1 as: white electricity and related components > electrical lighting > cleaning appliances > kitchen appliances > black electric display > personal care.

Investment advice: On a short-term basis, benefiting from channel inventory replenishment and the recovery in terminal demand in some regions, export companies are expected to perform well in Q1 under the low base effect. We recommend Xinbao Co., Ltd. (002705.SZ) and Omar Electric (002668.SZ). In terms of long-term cycle, brand companies have extensive space to go overseas through the advantages of product strength, manufacturing power, and channel layout. We recommend Stone Technology (688169.SH) and Hisense Vision (600060.SH). The implementation of national policies is expected to form joint efforts, making it easier for leading companies with leading multi-category and multi-brand layouts to gain market share. We recommend Midea Group (000333.SZ), Hisense Home Appliances (000921.SZ), Haier Smart Home (600690.SH), and Gree Electric (000651.SZ).

Risk warning: raw material price fluctuation risk, exchange rate fluctuation risk