Hong Kong stock concept tracking | Seamless transition of old-for-new policy Institutional optimism on the consumption potential of the home appliance industry chain (including concept stocks)

State Council news conference on January 8, 2025, announced the continuation of the "Two New" policy in 2025 and issued detailed regulations. The 8 major categories of consumer goods in the 2024 market have been expanded to 12 categories. BANKCOMM International stated its expectations for the first quarter of this year: According to the press conference, considering the consumption demand during New Year and Spring Festival, a subsidy fund of 81 billion yuan has been allocated for the replacement of old products with new ones. Compared to last year's subsidy ratio of 50 billion yuan/20% for home appliances, it is estimated that sales of home appliances, digital products, and other categories in the first quarter may exceed 150 billion yuan, as opposed to the total sales of 383.2 billion yuan in the first quarter of 2024 for communication equipment and home appliances. BOCOM INTL released a research report stating that the extension and expansion of the old-for-new policy support the accelerated release of demand for replacing home appliances during the Spring Festival. The significant increase in the purchase limits of air conditioners and the growth of categories are worth attention. In the categories of products benefiting from the old-for-new policy support, retail sales of high energy efficiency grade and smart home appliances have consecutively grown by over two digits for four months, with outstanding performance of smart products. It is optimistic about leading home appliance companies with diversified category layout, complete channels, and mature competitiveness in the air conditioning market. The effect of the old-for-new policy on home appliances in 2024 was significant, and the policy will continue in 2025, with categories gradually expanding from major appliances to kitchen appliances and small home appliances. The potential for home appliance consumption is expected to continue to be released, and the product structure has been optimized. According to the research report from HAITONG INT'L, the terminal retail sales of home appliances in 2025 are expected to achieve both quantity and price increases. Leading companies are expected to achieve steady growth in domestic sales revenue, with a significant increase in average selling price driven by the old-for-new policy, and profit margins of home appliance companies are expected to improve. Despite the downward trend in interest rates, the dividend yields of leading home appliance stocks remain attractive, with a focus on white goods and black goods leaders benefiting from the old-for-new policy and possessing global competitiveness. Hong Kong-listed leading home appliance companies include: Hisense Home Appliances Group (00921), HAIER SMARTHOME (06690), TCL ELECTRONICS (01070), Midea Group Co., Ltd (00300), and XIAOMI-W (01810).