Shenwan Hongyuan Group: Opening years of the stove are impressive, and the double-line prosperity accelerates after the Spring Festival.

Shenwan Hongyuan Group released a research report stating that according to data from AVCLOUD, offline sales of range hoods from W01-07 (up to February 16) totaled 101,300 units, an increase of 23.7% year-on-year, with sales revenue reaching 398 million yuan, up by 30.0% year-on-year; gas stoves totaled 115,900 units, up by 13.0% year-on-year, with sales revenue of 236 million yuan, an increase of 27.1% year-on-year; in the online market, according to AVCLOUD data, range hoods totaled 899,700 units, an increase of 30.3% year-on-year, with sales revenue of 1.115 billion yuan, up by 16.6% year-on-year; gas stoves totaled 1.275 million units, up by 25.1% year-on-year, with sales revenue of 789 million yuan, an increase of 19.5% year-on-year, showing a good performance in the range hood category. Shenwan Hongyuan Group's main points are as follows: Clearing the haze, the policy of replacing old with new activates the market On July 25, 2024, the National Development and Reform Commission and the Ministry of Finance issued a notice on "Several Measures to Support Large-scale Equipment Renewal and Consumption of Old Products", which mentions the arrangement of around 300 billion yuan of long-term special national debt funds to support large-scale equipment renewal and the replacement of old products. In addition to the 5 subsidized categories of color TV, refrigerator, washing machine, air conditioner, and computer that were already involved in the appliance "replace old with new" policy in 2009, this time three categories, namely water heaters, household stoves, and range hoods, have been added to a total of 8 subsidized categories. According to AVCLOUD's summary data, in 2024, range hoods achieved retail sales of 36.2 billion yuan, an increase of 14.9% year-on-year, with retail volume reaching 20.83 million units, an increase of 10.5% year-on-year; gas stoves achieved retail sales of 20.4 billion yuan, an increase of 15.7% year-on-year, with retail volume of 24.29 million units, an increase of 15.2% year-on-year; electric water heaters achieved retail sales of 23.6 billion yuan, an increase of 1.3% year-on-year, with retail volume of 18.02 million units, an increase of 2.5% year-on-year; gas water heaters achieved retail sales of 29.6 billion yuan, an increase of 8.8% year-on-year, with retail volume of 13.43 million units, an increase of 8.7% year-on-year. The offline retail sales of range hoods, gas stoves, and water heaters in W01-W34 (as of August 26) were -4.0%/-0.6%/+3.9% year-on-year, while offline retail sales were -9.5%/-1.3%/-1.5% year-on-year, indicating a significant boost in new kitchen appliance categories added to subsidies after the policy was implemented. The performance of the range hood category has been good since the beginning of the year, with sales accelerating significantly after the Spring Festival in both online and offline channels. In the offline market, according to AVCLOUD data, in January 2025, range hood sales reached 92,200 units, an increase of 2.7% year-on-year, with sales revenue of 359 million yuan, an increase of 3.6% year-on-year; gas stoves sold 103,400 units, a decrease of 4.4% year-on-year, with sales revenue of 210 million yuan, an increase of 5.3% year-on-year; online range hoods sold 600,400 units, an increase of 14.2% year-on-year, with sales revenue of 739 million yuan, a decrease of 1.5% year-on-year; gas stoves sold 847,000 units, an increase of 12.3% year-on-year, with sales revenue of 526 million yuan, an increase of 3.1% year-on-year. The sales revenue of multi-category markets only achieved single-digit year-on-year growth mainly due to the misalignment of the Spring Festival in January 2025, while sales data significantly accelerated after the Spring Festival. According to AVCLOUD data, range hoods in the offline market from W01-07 (up to February 16) totaled 101,300 units, an increase of 23.7% year-on-year, with sales revenue reaching 398 million yuan, an increase of 30.0% year-on-year; gas stoves totaled 115,900 units, an increase of 13.0% year-on-year, with sales revenue of 236 million yuan, an increase of 27.1% year-on-year; in the online market, according to AVCLOUD data, range hoods totaled 899,700 units, an increase of 30.3% year-on-year, with sales revenue of 1.115 billion yuan, an increase of 16.6% year-on-year; gas stoves totaled 1.275 million units, an increase of 25.1% year-on-year, with sales revenue of 789 million yuan, an increase of 19.5% year-on-year, showing a strong performance in the range hood category. Investment recommendation The policy of replacing old with new has already been implemented in 2025. In addition to continuing the subsidy intensity of the 2024 policy standards, microwave ovens, water purifiers, dishwashers, and rice cookers have been added to the subsidy range. At the same time, individuals who have already received subsidies for certain products in 2024 can continue to enjoy the subsidies when purchasing similar products in 2025. Compared to previous subsidies, this policy subsidy has further broadened the categories and is expected to have a greater appeal to consumers, driving the replacement of old products with new ones. Referring to the time taken for the 2024 policy to take effect, it is expected that the industry's overall sales in the first eight months of this year will still benefit from a low base. In the kitchen appliance sector, Vatti Corporation (002035.SZ) and Hangzhou Robam Appliances (002508.SZ), which have a stable position in traditional categories, as well as Guangdong Vanward New Electric (002543.SZ), which leads in the water heater category, are recommended. Risk warning Risk of fluctuating raw material prices; risk of exchange rate fluctuations; risk of policy fluctuations at home and abroad.