According to a report released by CICC, since August, various regions in the mainland have gradually implemented the old-for-new policy. As of September 20, a total of 29 provinces and cities have issued relevant detailed rules. In addition to the eight categories of large appliances and kitchen appliances mentioned in the central policy, such as air conditioners, refrigerators, washing machines, and color TVs, some local governments also provide subsidies of similar intensity for categories such as floor sweepers, dishwashers, small appliances, and smart home products.

The bank believes that Hubei, the province that first implemented the detailed rules, has achieved significant results. In addition, the offline sales growth of large household appliances in Chongqing, Sichuan, Zhejiang, Yunnan, and other provinces and cities has also significantly increased. In Chongqing W35-W37 (August 26 to September 15), the offline sales of air conditioners increased by 2,012%, 109%, and 733% respectively. In Zhejiang W35-W37, the offline sales of air conditioners increased by 31%, 38%, and 163% respectively year-on-year. Refrigerators, kitchen appliances, water heaters, and others also performed well. In addition, the subsidy intensity this round is high, conducive to the sales of medium and high-end products, improving the product structure. Looking at the weekly data in recent weeks, the average offline retail prices in various regions have also increased year-on-year.

Furthermore, the bank pointed out that since August, the old-for-new policy has been gradually implemented in various regions, and the prolonged high temperature has led to a recovery in air conditioning sales. In August, the total retail sales of air conditioners increased by 22% year-on-year (AVC); domestic shipments of air conditioners in August decreased by 5% year-on-year (Industry Online), which was better than the previous production plan. Currently, the cycle of destocking and restocking of air conditioners has significantly shortened. Considering the significant policy stimulation effect, the bank believes that the destocking of air conditioners may end in September. According to the latest production data from AVC, the actual production volume of air conditioners for domestic sales increased by 23.1% year-on-year in October, significantly higher than before.

The bank mentioned that since June, the domestic white goods sector has undergone deep adjustments and is currently at a low valuation. They recommend Haier Smart Home (06690.HK) and Hisense Ha (00921.HK), maintaining the profit forecasts, ratings, and target prices of the relevant companies unchanged. Both are rated as 'outperform the industry' with target prices of 33 and 27 yuan respectively.