China Consumer Appliances Sector_2025 home appliances trade-in subsidies and key takeaways from NDRC Press Conference

Summary of China Consumer Appliances Sector Conference Call Industry Overview - The conference call focused on the China Consumer Appliances Sector and the implications of the 2025 home appliances trade-in subsidies announced by the National Development and Reform Commission (NDRC) and the Ministry of Finance on January 8, 2025 [1][2]. Key Takeaways 1. Expansion of Subsidy Categories: - In 2025, the central government will expand subsidies to cover 4 additional categories: microwave, water purifier, dishwasher, and rice cooker, alongside the existing 8 categories (fridge, washing machine, TV, air conditioner, PC, water heater, range hood, and hobs) [2][3]. 2. Subsidy Structure: - The trade-in subsidy will remain at 15% of the sales price, with an additional 5% for energy-efficient products. The cap for subsidies is set at RMB 2,000 per category per consumer, with air conditioners allowing up to 3 units per consumer [3]. 3. Increased Total Subsidies: - The total amount for the 2025 subsidies will significantly increase from RMB 150 billion allocated in 2024. The government has already issued RMB 81 billion to support consumer goods trade-in, exceeding market expectations and potentially boosting consumption during the Chinese New Year [4]. 4. Impact of 2024 Subsidies: - The 2024 trade-in subsidies positively impacted sales, with over 36 million consumers purchasing 56 million units of appliances, driving sales of RMB 240 billion. The total subsidies amounted to RMB 43 billion, higher than previous market expectations [5]. Stock Implications - Hisense Home Appliances is rated as Buy, while Zhejiang Supor is rated as Neutral. Both companies are expected to benefit from the subsidy policies [6]. Risks and Challenges - The main risks facing the sector include: - Property market downturn affecting demand for home appliances - Elevated raw material prices and global supply chain constraints impacting exports [8]. - Specific risks for Hisense include reduced demand for white goods, soft HVAC demand, intensified competition, and geopolitical tensions affecting export sales [9]. For Supor, risks include rising price competition and raw material cost inflation [10]. Conclusion - The 2025 subsidies are expected to significantly boost the consumer appliances market in China, particularly benefiting companies like Hisense and Supor. However, potential risks from the property market and raw material costs could pose challenges to growth in the sector.