GF SEC: Domestic sales of household appliances industry are slowing down, while exports maintain relatively high business activity.

GF Securities released a research report stating that the domestic sales growth of the household appliance industry has slowed down, while exports maintain a relatively high level of prosperity. In the third quarter of 2024, the online channel performance of major appliances was good, with growth in refrigerators, air conditioners, and washing machines. Air conditioners performed the best, achieving growth across all channels. In the first three quarters of 2024, the average price of refrigerators increased compared to the previous year, while the average prices of air conditioners and washing machines decreased. The overall performance of small household appliances is relatively weak in the domestic market, with cleaning appliances like robotic vacuum cleaners and soy milk makers showing better demand recovery. Exports remain strong, with growth outpacing domestic sales. Industry Overview: Domestic sales growth has slowed down, while exports maintain a relatively high level of prosperity. Domestic sales data from the National Bureau of Statistics shows that in January-August 2024, the retail sales of household appliances and audio-visual equipment reached 594 billion yuan, an increase of 2.5% year-on-year. Exports in the third quarter of 2024 saw strong demand, leading to rapid growth in appliance exports. According to export statistics from the General Administration of Customs, from January to August 2024, appliance exports totaled 66.62 billion U.S. dollars, a year-on-year increase of 14.7%. Major Appliances: 1. Shipping End: In July-August 2024, exports continued to grow steadily, while domestic demand weakened and growth slowed down. In the export market, air conditioners showed a year-on-year growth rate of 37.5%, while refrigerators and washing machines grew by 14.2% and 13.6% respectively. In the domestic market, air conditioners experienced a year-on-year decline of 14.9%, while refrigerators and washing machines grew by -14.5% and 7.7% respectively. 2. Retail End: The online channel performance of major appliances was good in the third quarter of 2024, with air conditioners showing the best performance. According to OWYUN data, online sales of air conditioners, refrigerators, and washing machines increased by 17.3%, 8.0%, and 11.7% respectively. Retail data showed better performance, with online sales channels seeing growth. 3. Price End: In the first three quarters of 2024, the average price of refrigerators increased year-on-year, while air conditioners and washing machines saw a decrease. According to OWYUN data, the average prices of air conditioners, refrigerators, and washing machines decreased online, while they increased offline. Small Household Appliances: Overall, the domestic market is weak, with cleaning appliances and soy milk makers showing better demand recovery. OWYUN data shows that categories like robotic vacuum cleaners and soy milk makers performed well in the online market. AV Equipment and Projection: In July 2024, the total sales volume and revenue of televisions decreased compared to the previous year. Investment Recommendations: The performance of major appliances is steadily growing and companies have stable ROE and high dividend advantages. Companies like Gree Electric Appliances, Haier Smarthome, and Hisense Home Appliances Group are recommended. Additionally, companies like Beijing Roborock Technology and TCL Electronics, which benefit from overseas brand expansion, are recommended. Risk Warning: Sharp increases in raw material prices, significant exchange rate fluctuations, weakening industry demand, intensified competition, and delays in property completion could pose risks.