Market Insight | Home Appliance Stocks Continue to Rise, Chinese Household Appliance Exports Achieve Positive Growth for 18 Consecutive Months, Industry Domestic Sales Expectations May See a Reversal

Home appliance stocks continue to rise. As of the time of publication, TCL Electronics rose by 5.41% to HKD 5.26; Hisense Home Appliances rose by 0.88% to HKD 22.8; Haier Smart Home rose by 3.37% to HKD 26.1. On the news front, the latest data released by the General Administration of Customs on September 18 showed that in the first 8 months of this year, key export products from China, including household appliances, continued to grow at a double-digit rate, with a year-on-year increase of 14.7% (in US dollars). As of August this year, China's home appliance exports have seen year-on-year positive growth for 18 consecutive months. Shenwan Hongyuan believes that against the backdrop of the Fed's interest rate cuts, interest rate-sensitive sectors such as real estate and manufacturing may benefit, which could also radiate to China's furniture, home appliances, decoration, processing of metal products, industrial machinery, and other commodity exports. TF Securities released a research report stating that home appliance revenue is expected to maintain steady growth in the first half of 2024, with continuous improvement in profitability and the resilience of leading companies' performance. With the recent implementation of the policy to replace old appliances with new ones, the subsidy intensity is comparable to the "home appliances going to the countryside" policy. The domestic market is currently experiencing a new cycle of updates, and the elasticity of policy implementation can be expected. Domestic sales expectations may see a turnaround, coupled with export prosperity, low valuation, and high dividend yields, maintaining an industry rating of "outperforming the broader market"