According to the research report released by Kaiyuan Securities, the current domestic demand still needs to recover, and going global faces geopolitical risks. The bank recommends going global symbols of own brands that are not affected by sanctions.
According to the Futu Securities research report released on the Zhitong Finance APP, the current domestic demand still needs to recover, and going global faces geopolitical risks. The bank recommends (1) self-owned brand symbols that are not affected by sanctions for going global: Beijing Roborock Technology Co., Ltd. (688169.SH), Ninebot Inc. (689009.SH), TCL Electronics Holdings Limited (01070); (2) other high-quality global symbols: Dechang Motors (605555.SH). (3) The sales of the company do not rely on industry growth, but have share/net margin improvement logic: AIMACAR Electric Co., Ltd. (603529.SH), Yadea Holdings Ltd. (01585).
The major viewpoints of Open source Securities are as follows:
Recommended: Beijing Roborock Technology Co., Ltd., Ninebot Inc., TCL Electronics Holdings Limited, AIMACAR Electric Co., Ltd., Dechang Motors, etc.
The current domestic demand still needs to recover, and going global faces geopolitical risks. We recommend (1) self-owned brand symbols that are not affected by sanctions for going global: Beijing Roborock Technology Co., Ltd., Ninebot Inc., TCL Electronics Holdings Limited; (2) other high-quality global symbols: Dechang Motors. (3) The sales of the company do not rely on industry growth, but have share/net margin improvement logic: AIMACAR Electric Co., Ltd., Yadea Holdings Ltd. Key recommended symbols: Beijing Roborock Technology Co., Ltd. (Continuous rush for share during 618 internal sales, overseas channel construction is accelerating, and Q2 2024 is expected to continue to exceed expectations), Ninebot Inc. (Accelerating expansion of two-wheeled vehicles/all-terrain vehicles/lawn mowing robots channels, Q2 2024 is expected to continue to exceed expectations), TCL Electronics Holdings Limited (Completed overseas production capacity layout, continuous grabbing of Korean brand share, no strong brands in Europe and the United States), AIMACAR Electric Co., Ltd. (Industry is concentrated towards leading companies under policy adjustment, and the resumption of stock-based incentive programs demonstrates development confidence), Yadea Holdings Ltd. (Industry is concentrated towards leading companies under policy adjustment, and it has taken the lead in laying out Southeast Asia and seizing the emerging sodium electric raceway card), Dechang Motors (Downstream customers are all US leading brands, new customers and new business continue to expand, and new fixed point orders have been received successively).
The internal sales of refrigeration and washing machines have been somewhat pressured, and exports have maintained growth, with second-tier refrigerator brands having more aggressive production scheduling.
(1) 6-8 month industrial online refrigerator industry & sub-brand production schedule: Looking at the industry as a whole, the June/July/August 2024 production schedule for household refrigerators is +1.1%/-0.9%/-5.3% year-on-year compared to 2023 actual performance, of which the domestic production schedule YoY is -7.5%/-2.6%/-11.5%, and the export production schedule YoY is +5.4%/+4.6%/+4.4%. Looking at the sub-brands, Haier declined 2.4% in June, 15.7% in July, and 21.8% in August. Midea declined 11.5% in June, 15.2% in July, and 21.4% in August. Hisense increased by 8.1% in June, 3.6% in July, and decreased by 5.8% in August. Oumei increased by 10.6% in June, 3.1% in July, and increased by 16.7% in August. Meiling decreased by 14.3% in June, 17.0% in July, and 22.0% in August. (2) 6-7-month industrial online washing machine industry & sub-brand production schedule: Looking at the industry as a whole, in June/July 2024, the production schedule of household washing machines is -0.1%/-0.8% year-on-year compared to 2023 actual performance, of which the domestic production schedule YoY is -8.5%/-4.3%,and the export production schedule YoY is +4.7%/+5.3%. Looking at the sub-brands, Haier decreased by 5.9% in June and 3.7% in July. Midea decreased by 0.3% in June and increased by 5.8% in July. Whirlpool decreased by 36.0% in June and 41.9% in July. Panasonic decreased by 2.9% in June and increased by 10.0% in July. TCL increased by 17.4% in June and 6.7% in July. Hisense increased by 27.5% in June and 18.2% in July. Bosch decreased by 1.5% in June and remained unchanged in July.
Beijing Roborock Technology Co., Ltd. and Ninebot Inc. have high market share and weak overseas brand competitiveness. We are bullish on their performance in Q2 2024.
Beijing Roborock Technology Co., Ltd.: China's sweeping robot brand has barely any competitors globally. Brands like iRobot are hardly seen in countries such as Germany and Northern Europe. We believe brand premium and product superiority can resist sanctions. (1) Overseas: Offline channels in Finland and Germany have already launched new products; France is constantly exploring new channels; it is expected to enter new markets in southern Europe in the second half of the year; it recently entered the US market and settled in BestBuy. Online channels like Amazon in Europe are pure incremental sales and are expected to replicate the success in the US and Asia. (2) Domestic: The 618 promotion continues to grab market share, and sales in May ranked first in the industry for both online sales and sales volume, with the P10S Pro model continuing to sell well and leading the market.
Ninebot is the world's number one brand for scooters, and has a factory in Vietnam which is not affected by sanctions. Except for Husqvarna in Sweden, most of the lawn mowing robots are Chinese brands and not affected by sanctions. Mid-to-high-end two-wheeled vehicles are all made in China. ATVs have already been subject to tariffs. The company's various business channels continue to expand. (1) ATV: North American channels continue to expand, with store numbers steadily increasing since May. They have already entered national or regional professional dealers such as RedeNOW and Family. (2) Lawn mowing robots: the new I series products have strong competitiveness and drive European channel expansion. The European channels are expected to have reached more than a thousand. The US market is still mainly sold online, but its market share has increased significantly. (3) Two-wheeled vehicles: the number of channel expansions exceeded expectations since the beginning of the year.
Risk warning:
Overseas demand has quickly fallen, raw material and shipping costs are rising, and industry competition is intensifying.