中国工业 - 消费补贴方案带来小幅积极影响-China Industrials Slightly Positive Implication From Consumption Subsidy Scheme

Summary of Conference Call Notes on China Industrials Industry Overview - The conference call discusses the China Industrials sector, focusing on the implications of the 2026 Consumption Subsidy Scheme announced by the National Development and Reform Commission (NDRC) [1] Key Points Consumption Subsidy Scheme - The 2026 subsidy program has a budget of US$8.9 billion, significantly lower than the Rmb300 billion (approx. US$41.8 billion) allocated for 2025 [1] - The expected positive impact on corporate earnings for 2026 is anticipated to be less than in 2025 due to the reduced budget [1] - Major sectors covered include home appliances, auto, digital consumer products, and upgrading equipment [1] Specific Subsidy Details - Digital and smart products will be included in the 2026 scheme, offering a 15% rebate on items like smartphones and smartwatches, capped at Rmb 500 each [2] - For home appliances, a 15% subsidy is available for six categories, capped at Rmb 1,500 per item [2] - In the auto sector, scrapping old cars can yield subsidies of 12% of the purchase price for new energy vehicles (NEVs), capped at Rmb 20,000 [2] Equipment Upgrade Program - The equipment-upgrade program will expand to include sectors such as elevators in old residential blocks, elderly-care facilities, and fire-and-rescue systems [3] Company Insights Preferred Companies - Shengyi Tech, Han's CNC, Shennan Circuit, and KB Laminate are highlighted for their sales exposure and AI-related business opportunities [1] - Hengli Hydraulic is favored in the automation space due to potential re-rating linked to humanoid robots [1] Company Valuations and Risks - Han's CNC: Target price of Rmb 140 based on a 50x 2026E P/E, with a 98% earnings CAGR expected for 2025-26E [7] - Risks include weaker AI PCB equipment demand and rising component costs [8] - Hengli Hydraulic: Target price of Rmb 135 based on a 52x 2026E P/E [9] - Risks include weaker demand for components and lower-than-expected gross profit margins [10] - Kingboard Laminates Holdings: Target price of HK$20.5 based on a 19-20x P/E for 2026E, reflecting potential earnings upgrades [11] - Risks include slower customer certification and macroeconomic conditions [12] - Shengyi Technology: Target price of Rmb 83 based on a 44x 2026E P/E, with a strong growth outlook due to AI-CCL revenue [13] - Risks include lower-than-expected demand for AI-CCL orders and subdued consumption [14] - Shennan Circuit: Target price of Rmb 281 based on a 48x forward 2026E P/E, with significant exposure to AI and auto segments [16] - Risks include slower-than-expected demand in the AI server market and higher laminate cost inflation [17] Additional Insights - The report emphasizes the importance of the 2026 subsidy program in shaping the earnings outlook for various companies within the industrial sector [1][2][3] - The anticipated lower budget for the subsidy program may lead to a more cautious investment environment compared to 2025 [1] - Companies with strong positions in AI and digital products are expected to benefit more from the subsidy scheme [1][2]