Guotou Securities: The "Replace the Old with the New" policy for home appliances is expected to be introduced in 2026, which is likely to boost the outlook for home appliance consumption.

GF Securities releases research report stating that the home appliance replacement policy will be implemented in 2026. Compared to 2025, next year's subsidy policy will have a slightly reduced support range, a lower subsidy rate, and a focus on high-energy efficiency products. The overall content is largely in line with market expectations and is expected to stimulate marginal improvement in domestic appliance sales, driving industry product structure optimization. Domestic appliance consumption is expected to remain stable, with white goods and consumer electronics companies with advantages in research and development, distribution, and branding benefiting more from the new policy. On the export side, the easing of trade tensions between China and the United States is expected to reduce tariff pressures, and global capacity of appliance companies is gradually being released, with emerging markets continuing to contribute to incremental growth. GF Securities' main points are as follows: Event: On December 30th, the National Development and Reform Commission and the Ministry of Finance issued a notice on the implementation of a large-scale equipment renewal and consumer goods replacement policy in 2026. Support for home appliances replacement. Individual consumers purchasing products such as refrigerators, washing machines, televisions, air conditioners, computers, and water heaters with a level 1 energy efficiency or water efficiency standard will be subsidized by 15% of the product's sales price, with each consumer eligible for one subsidy per product category, not exceeding 1500 yuan per item. In addition, the National Development and Reform Commission, together with the Ministry of Finance, has already issued a plan for 625 billion yuan of long-term special national bonds in 2026 to support the replacement of old consumer goods. Optimization of the support range, subsidy standards, and implementation mechanisms of the 2026 subsidy policy Compared to the 2025 home appliance replacement subsidy policy, the 2026 subsidy policy has three main optimizations: 1) In terms of support range, the 2026 policy focuses on six product categories, including refrigerators, washing machines, televisions, air conditioners, computers, and water heaters, reducing support for household stoves, range hoods, microwave ovens, water purifiers, dishwashers, rice cookers, and other six categories of products supported by the 2025 policy. 2) In terms of subsidy standards, the 2026 policy adjusts the subsidy rate for level 1 energy efficiency or water efficiency products from 20% of the product's sales price to 15%, no longer subsidizing products with level 2 energy efficiency or water efficiency standards, allowing each consumer to receive one subsidy (air conditioner products are reduced from three to one) per product category, with the single subsidy cap adjusted from 2000 yuan to 1500 yuan. In addition, the 2026 first batch of funds for the replacement of old consumer goods is 62.5 billion yuan (the first batch of funds in 2025 was 81 billion yuan, see table 2), a year-on-year decrease of 23%. The total amount of subsidies for 2026 may decline. 3) In terms of implementation mechanisms, the 2026 policy clearly specifies a unified subsidy standard nationwide; establishes a pre-allocation system for subsidy funds to ease the pressure of enterprise financing; fully leverages the advantages of different sales channels to support offline retail entities; increases the offline operation entities in rural areas and guides online channels to tilt towards rural areas to increase the convenience of consumption in rural areas. The 2025 replacement policy effectively stimulated appliance consumption According to data from the National Bureau of Statistics, from January to November 2025, the national retail sales of household appliances and audio-visual equipment above designated size increased by 14.8% year-on-year. According to China Central Television news citing the Ministry of Commerce, from January to November, more than 128.44 million appliances were replaced under the old-for-new policy, with an estimated cumulative subsidy amount of approximately 82.7 billion yuan, driving appliance consumption by about 439.5 billion yuan. The replacement policy stimulated demand for updated appliances, effectively boosting the vitality of appliance consumption. The implementation of the 2026 subsidy policy is expected to promote the sound development of the industry through detailed optimization Affected by the premature release of demand, the reduction of national subsidies, and the high base, domestic appliance consumption in China has been under pressure since October 2025. With the introduction of the 2026 national subsidy policy, and the first batch of 62.5 billion yuan funds for the replacement of old consumer goods being allocated to localities, the domestic appliance market is expected to improve in terms of profitability. The 2026 subsidy policy focuses on categories such as white goods and color TVs, with subsidy funds primarily invested in high-energy efficiency products, emphasizing support for offline retail entities. The new policy is expected to drive the industry towards high-end, intelligent, and green upgrades, promoting product structure optimization. White goods companies with advantages in research and development, distribution, and branding will benefit more from the subsidy policy. Recommendation to focus on three investment themes 1) Recommend white goods leading companies with high operational quality and high dividend yield. Leading white goods companies have a complete brand matrix and distribution layout, with the effects of digital transformation continually paying off, showing resilience in growth. At the same time, the cash flow situation of leading white goods companies is good, maintaining a high dividend yield in the long term. Recommended companies include Midea Group Co., Ltd (000333.SZ), HAIER SMARTHOME (600690.SH), Gree Electric Appliances, Inc. of Zhuhai (000651.SZ), Hisense Home Appliances Group (000921.SZ), and Changhong Meiling (000521.SZ). 2) Focus on leading companies with outstanding global capabilities. Tariff risks are driving appliance companies to accelerate their shift to overseas models, vigorously promoting global capacity layout, brand globalization, and localization strategies. Emerging markets in the Middle East, Africa, Latin America, etc., with large populations and low household appliance penetration rates, are expected to continue to contribute revenue growth to companies expanding overseas. Recommended companies include Hisense Visual Technology (600060.SH), TCL ELECTRONICS (01070), Guangdong TCL Smart Home Appliances (002668.SZ), and Guangdong Xinbao Electrical Appliances Holdings (002705.SZ). 3) Focus on technology appliance companies continuously expanding new businesses. Technology-enabled appliance product upgrades, with AI big models and Siasun Robot & Automation applications expected to enhance product user experience, drive demand expansion. Recommended companies include Ninth Company (689009.SH), Ecovacs Robotics (603486.SH), Beijing Roborock Technology (688169.SH), and Guangzhou Shiyuan Electronic Technology (002841.SZ). Risk warning Policy implementation may fall short of expectations, significant increase in raw material prices, risks associated with changes in real estate policies, and substantial appreciation of the renminbi.