Guotai Junan: Real estate anchors stability with a new round of national subsidies, leading kitchen appliances are expected to welcome a second breakthrough opportunity

According to the Zhitong Finance APP, Guotai Junan released a research report stating that as the kitchen appliance sector in the post-real estate cycle, after years of weak demand, the industry landscape is undergoing structural optimization. On one hand, leading companies are rapidly seizing market share through core channel advantages; on the other hand, the old-for-new policy injects new momentum into the industry, which is more beneficial for leading companies with larger scales and multi-brand, multi-category layouts. With policy dividends and increased brand concentration, leading enterprises are expected to further expand their market share during the industry reshuffle. With real estate anchoring a stable trajectory and the new round of national subsidies starting, kitchen appliance leaders are likely to welcome a second breakthrough opportunity, recommending ROBAM (002508.SZ) and VATTI (002035.SZ). Guotai Junan's main viewpoints are as follows: Real estate anchors a stable trajectory, and the bottom of kitchen appliances has emerged The sales of home appliances are strongly correlated with real estate sales and completion data. After 2018, as real estate regulations tightened and the "housing is for living, not for speculation" policy deepened, the growth rate of commercial housing sales area declined, directly leading to weakened new demand for kitchen appliances. At the same time, the transaction area of houses in third- and fourth-tier markets significantly decreased, and the dividends of the kitchen appliance sinking market faded. Since the second half of 2024, central and local governments have frequently introduced policies such as "ensuring delivery of buildings," optimizing purchase restrictions, and lowering down payment ratios, continuously releasing policy benefits, increasing support from both supply and demand sides, gradually stabilizing the market, boosting market confidence, and showing significant signs of marginal improvement. The Political Bureau meeting on February 28, 2025, newly proposed to "stabilize the real estate and stock markets," accelerating the construction of a new model for real estate development, and gradually adjusting the supply-demand relationship towards balance, laying the foundation for the recovery of the post-real estate cycle industry. A new round of national subsidies begins, and kitchen appliance leaders welcome a second breakthrough opportunity From the channel perspective, referring to the national subsidies in Q4 2024, merchants need to advance funds in the payment process, which is more favorable for leading distributors with strong financial capabilities. In addition, leading companies with high market sensitivity have undergone a second evolution at the channel end and are actively conducting centralized warehousing and distribution layouts. In the process of reconstructing the industry ecosystem, they are expected to achieve further market share increases. From the category perspective, the expansion of national subsidy categories in 2025 is more beneficial for leading companies with well-established category layouts. Considering both new demand and replacement demand, it is expected that the internal sales volume of kitchen appliances will achieve single-digit growth in 2025. In terms of pricing, the mature smoke and stove industry has not experienced prolonged price wars, and the average prices of range hoods and gas stoves remain relatively stable. Based on the experience from the Q4 2024 national subsidies, the old-for-new policy is favorable for the high-end market, and this will continue in 2025, benefiting the strong. The kitchen appliance duopoly has ample net cash and high dividend ratios, highlighting value stock attributes According to the Q3 2024 financial report, ROBAM's end-of-period cash and cash equivalents + trading financial assets + non-current assets due within one year + other current assets + other non-current assets - payable bonds - long-term liabilities - short-term liabilities amount to 8.2 billion, with ample cash on hand, and net cash accounting for 39% of market value. According to the Q3 2024 financial report, VATTI's end-of-period cash and cash equivalents + trading financial assets + non-current assets due within one year + other current assets + other non-current assets - payable bonds - long-term liabilities - short-term liabilities amount to 2.8 billion, with net cash accounting for 45% of market value From the perspective of dividends, in 2023, both ROBAM and VATTI have a dividend payout ratio greater than 50%, and ROBAM has announced a commitment to steadily increase cash dividends from 2024 to 2026. Risk Warning The effect of the old-for-new subsidy policy is less than expected, the risk of raw material price fluctuations, and intensified industry competition