According to Futu Securities, on July 26, the General Office of the National Radio and Television Administration, the General Office of the Ministry of Commerce, and the General Office of the Ministry of Culture and Tourism issued a notice about including hotel TV terminals in the scope of local consumer goods replacement. Local radio and television, cultural and tourism authorities should implement the requirements for complex governance of hotel TV operations, and guide and promote hotels in the jurisdiction to upgrade their old TV systems to ultra-high-definition equipment, thereby improving the TV viewing experience for the people.

Since April this year, the National Radio and Television Administration has been jointly conducting special governance on complex operations of hotel TVs with the Ministry of Culture and Tourism, China Consumer Association, and other departments. At present, some regions have achieved phased results.

The relevant departments require that by the end of June this year, the governance work in designated hotels of the party and government organs, three-star and above hotels, and trial provinces and cities across the country should be completed. By the end of September, the governance work of the hotels nationwide should be completed in principle, and all should be changed to new ones within the year. The inclusion of old hotel TVs in the scope of local consumer goods replacement is also a move by the central government to support the replacement of old products with new ones.

On July 25th, the National Development and Reform Commission and the Ministry of Finance issued "Several Measures to Support Large-scale Equipment Updates and Consumption for Old-for-New Goods", arranging around 300 billion yuan of super-long-term special national debt funds to support large-scale equipment updates and consumption of old-for-new goods.

In terms of home appliance consumption, subsidies for replacing old products with new ones are provided to individual consumers who purchase eight categories of household appliances, including refrigerators, washing machines, televisions, air conditioners, computers, water heaters, household stoves, and cooker hoods, with energy efficiency or water efficiency standards of level 2 or above. The subsidy standard is 15% of the product sales price. For products with energy efficiency or water efficiency standards of level 1 or above, an additional 5% subsidy of the product sales price is provided.

On July 25th, Zhao Chenxin, deputy director of the National Development and Reform Commission, said at a special press conference that in March this year, the State Council issued the "Action Plan for Promoting Large-scale Equipment Updates and Replacement of Consumer Goods with Old Ones". For more than 4 months, the "four major actions" proposed in the plan have achieved positive results. The retail sales of home appliances and audio-visual equipment for quota entities (retail companies whose annual main business income reached 5 million yuan or more) increased by 3.1% year-on-year, an increase of 2.1 percentage points compared with the same period last year.

According to Fangzheng Securities, the policy of replacing old home appliances with new ones has been strengthened, and the entire home appliance industry is expected to benefit from it. White goods, kitchen appliances, and black screens are recommended. Assuming that the support for this round of replacing home appliance products with new ones is about 30-40 billion yuan, and calculated based on a 15% subsidy for level-2 energy efficiency, estimated that the central government subsidizes 90%, about 220-300 billion yuan of terminal retail sales will be leveraged. If it is calculated based on a 20% subsidy for level-1 energy efficiency, it estimated that the central government subsidizes 90%, and about 165-220 billion yuan of terminal retail sales will be leveraged. As home appliances are relatively rigid and have a lower unit price, the demand for replacing old home appliances with new ones may become stronger.

Related concept stocks:

TCL Electronics (01070): By the first half of 2024, TCL's global TV shipments will reach 12.52 million units, a year-on-year increase of 9.2%. Among them, the global shipments of 65-inch and above TVs increased by 14.5% year-on-year, and the proportion of shipments increased to 23.6%; the global shipments of 75-inch and above TVs increased by 34.5% year-on-year, and the proportion of shipments increased to 11.8%; high-end products such as Quantum dot TVs and Mini LED TVs increased by 64.4% and 122.4% respectively.

Skyworth Group (00751): Skyworth actively responds to the action of replacing old products with new ones, and uses multiple channels and methods to extend the policy benefits to the general public in the country. So far, the amount of old-for-new activities in offline physical stores has exceeded 250 million yuan, and the amount on online e-commerce platforms has reached 64.7 million yuan.

Haier Smart Home (06690): Haier Smart Home sold more than 100 million home appliances in more than 200 countries and regions around the world last year, covering various categories such as major home appliances, HVAC, water heaters, and small home appliances. By 2023, the net cash flow from operating activities will reach 25.262 billion yuan, a year-on-year increase of 24.7%.