CITIC SEC: The home appliance subsidy policy in 2026 is in line with expectations, with an estimated total subsidy scale of 70 billion yuan for the year.

CITIC SEC released a research report stating that in 2026, the domestic appliance subsidy policy will focus on black and white appliances, only subsidizing products that meet the first-level energy efficiency/water efficiency standards. The market had anticipated this move. The bank estimated that the appliance subsidy fund in 2026 would be approximately 70 billion yuan, effectively supporting domestic demand. Considering the continuation of the trade-in policy in 2026, which focuses on black and white appliances and only subsidizes products that meet the first-level energy efficiency/water efficiency standards, the bank recommends focusing on the following: 1) Leading companies in white appliances: benefiting from national subsidies and global layout; 2) Leading companies in black appliances: Mini LED technology leading globally, with the industry structure continually improving. Key points from CITIC SEC: - Two departments issued a notice on the trade-in policy for 2026. On December 30, 2025, the National Development and Reform Commission and the Ministry of Finance issued a notice on the implementation of a large-scale equipment upgrade and trade-in policy for consumer goods in 2026. The notice mentioned support for trading in old appliances for new ones. Individual consumers can receive a subsidy of 15% of the sales price for purchasing refrigerators, washing machines, TVs, air conditioners, computers, water heaters, and other 6 categories of appliances that meet the first-level energy efficiency or water efficiency standards. Each consumer can receive a subsidy for one item per category, with each subsidy not exceeding 1500 yuan. - The categories eligible for appliance subsidies have been reduced to 6 types, and air conditioners will no longer be subsidized for up to 3 items. In 2026, the categories eligible for appliance subsidies have been reduced from 12 types in 2025 to refrigerators, washing machines, TVs, air conditioners, computers, and water heaters (excluding range hoods, stoves, dishwashers, water purifiers, microwaves, and rice cookers), with each consumer eligible to receive a subsidy for one item per category (in 2025, each consumer could receive subsidies for up to 3 air conditioners). The notice also mentions support for trading in for smart home products (including products for the elderly), with specific subsidy categories and standards to be determined independently by local authorities based on actual circumstances. - The subsidy rate has been unified at 15%, with a cap of 1500 yuan per item, only subsidizing products that meet the first-level energy efficiency/water efficiency standards. In 2026, the appliance subsidy will be unified at 15% of the selling price with a cap of 1500 yuan per item. Compared to the 2025 policy, at that time, subsidies were given at rates of 15% for second-level products and 20% for first-level products, with a cap of 2000 yuan per item. This time, the subsidy rate has been slightly lowered. The notice also specifies that in 2026, only products meeting the first-level energy efficiency or water efficiency standards will receive subsidies, whereas in 2025, products meeting second-level and above standards were eligible, with higher subsidies for first-level products, raising the threshold for subsidies. - The bank estimates that the appliance subsidy in 2026 will be approximately 70 billion yuan. According to the National Development and Reform Commission, the first batch of 625 billion yuan of long-term special national bonds to support the trade-in of consumer goods in 2026 has been allocated ahead of schedule. The bank roughly estimates that the total trade-in subsidies for the year will be around 4*625=2500 billion yuan (compared to 3000 billion yuan in 2025). According to the National Development and Reform Commission, from January to November 2025, consumers traded in over 128 million units of 12 major categories of appliances, with the bank estimating that over 80 billion yuan has already been spent, accounting for approximately 28% of the total trade-in subsidy amount. If this ratio is used to approximate, the bank predicts that the appliance subsidy fund for 2026 will be around 70 billion yuan, effectively supporting domestic demand. Risk factors: Unexpectedly low downstream demand, increased industry competition, significant price increases in raw materials, and the trade-in policy's effectiveness falling short of expectations.