The Zhitong Finance App learned that Open Source Securities released a research report saying that on the export side, Chinese home appliance companies have advantages in the global supply chain, and engineer dividends are gradually becoming prominent, and they are beginning to have the ability to build brands. It is expected that there will be multi-dimensional resonance to jointly help enterprises go overseas. On the domestic sales side, we are still optimistic that the trade-in policy will drive demand for new exchanges, and that under the steady growth of the stock market, home appliance companies will have excellent and stable dividends.
Key recommended targets: (1) Stone Technology (688169.SH): Domestic sales promotion is worry-free, export sales still have an incremental market, and they continue to be optimistic that Q2 will exceed expectations. (2) Haier Smart Home (600690.SH): Domestic sales of air conditioners are flexible, export sales share increases + Europe reverses losses, digital reform reduces costs. (3) Company 9 (689009.SH), Hisense Vision (600060.SH), and TCL Electronics (01070): Relying on strong product competitiveness, Chinese brands seize overseas market share. Among them, Company 9 has channel development dividends (all-terrain vehicle US offline/global lawnmower); Hisense Vision and TCL Electronics offline channel structure upgrades and gap filling gaps coexist. (4) Dechang Co., Ltd. (605555.SH): 2024Q1 performance exceeded expectations, and the logic of expanding customers and categories continued to be fulfilled. (5) Taotao Auto Industry (301345.SZ): The rapid layout of regional supply chain advantages will be the first to benefit from the short-term travel dividends of golf carts. (6) There is room for improvement in net interest rates: Hisense Home Appliances benefit from Changhong Meiling.
The following is a summary of the research report:
Export sales performed well, dividend rates continued to rise, and maintained an “optimistic” rating
On the export side, Chinese home appliance companies (1) have advantages in the global supply chain, (2) engineer dividends are gradually becoming prominent, and (3) are beginning to have the ability to build brands. It is expected that there will be multi-dimensional resonance to jointly help enterprises go overseas. On the domestic sales side, we are still optimistic about the trade-in policy driving demand for replacement, and the excellent and stable dividend ability of home appliance companies under the steady growth of the stock market. Key recommended targets: (1) Stone Technology: Domestic sales are boosted and worry-free. There is still an incremental market for export sales, and it continues to be optimistic that Q2 will exceed expectations. (2) Haier Smart Home: Domestic sales of air conditioners are flexible, export sales share increases + Europe reverses losses, digital reform reduces costs. (3) Company 9, Hisense Vision, and TCL Electronics: Relying on strong product competitiveness, Chinese brands seize overseas market share. Among them, Company 9 has channel development dividends (all-terrain vehicle US offline/global lawnmower); Hisense Video and TCL Electronics offline channel structure upgrades and gap filling gaps coexist. (4) Dechang Co., Ltd.: 2024Q1 performance exceeded expectations, and the logic of expanding customers and categories continued to be implemented. (5) Taotao Auto Industry: The rapid layout of regional supply chain advantages will be the first to benefit from the short-term travel dividends of golf carts. (6) There is room for improvement in net interest rates: Hisense home appliances benefit the target Changhong Meiling.
The home appliance sector as a whole achieved steady growth, and profits grew faster as gross margin continued to rise
The overall revenue of the home appliance sector in 2023 was +6.4%/+13.9% year-on-year, and +7.4%/+9.9% year-on-year in 2024Q1. (1) Looking at net profit by sector, white electricity and components grew rapidly in 2023. Small household appliances were under pressure, the 2024Q1 white electricity and parts boom continued, small household appliances picked up, and black electricity and kitchen appliances were under pressure. (2) In terms of domestic and foreign sales, export performance is better. Domestic retail sales of household appliances in 2023/2024Q1 were -2.8%/+1.9% year-on-year, and export sales were +3.8%/+8.6% year-on-year respectively. (3) On the profit side, falling raw material prices and declining shipping prices compounded the rapid depreciation of the RMB exchange rate, and the profitability of the home appliance sector increased. The overall gross margin/net profit margin of the home appliance sector in 2023 was 26.0% (+1.9pct year on year, same below)/7.5% (+0.4pct), respectively, and 25.2% (+1.2pct)/7.1% (+0.05pct) in 2024Q1, respectively. (4) Institutions increase their holdings of household appliances. Since 2023Q1, the share of individual stocks in the home appliance industry has gradually increased in market value, reaching 3.6% (+1.8pct) in 2024Q1, an increase of 2.00 pct compared to 2023Q1. (5) Dividend rate: The sector's dividend rate has increased, and the dividend rate is at a high level. The home appliance sector's dividend rate in 2023 was 3.25% (+0.22pct), ranking fourth. Looking at the breakdown, dividend rates for white electricity and kitchen appliances are at a high level, while dividend rates for black appliances, kitchen appliances, and home appliance components have increased a lot.
2024Q1 The boom in white electricity and components continues, small household appliances pick up from a low base, and black electricity and kitchen appliances are under pressure
On the revenue side, revenue for the white electric/black electric/kitchen appliances/small appliances/components/lighting sector was +8.9%/+4.9%/+1.3%/+5.9%/-2.0% year-on-year in 2023, and +9.0%/+0.4%/+3.1%/+8.7%/+8.0%/+4.4%, respectively, in 2024Q1. On the profit side, each sector was +17.9%/+2.3%/+9.9%/-10.8%/+13.0%/+6.5% year-on-year in 2023, and +16.2%/-51.2%/-4.8%/+6.5%/+22.3% year-on-year in 2024Q1. White power: The boom in the industry continues, and export sales have achieved faster growth. Small household appliances: Cleaning and personal care categories performed better, and sweepers returned to sales growth. Kitchen appliances benefited from the 2023 handover policy, but real estate did not perform well under pressure in 2024Q1. Black electricity: Panels have a big impact on the profit side, and cost pressure is expected to improve quarterly. Lighting equipment: Revenue returned to growth in 2024Q1, and profitability increased year-on-year. Components: The downstream economy continues to drive growth.
Risk warning: raw material price risk, export demand falling short of expectations, policy falling short of expectations, etc.