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<Research>G Sachs Expects New Trade-in Measures for CN Consumer Durables to Have Positive Impact on Home Appliance Demand
China’s National Development and Reform Commission (NDRC) and the Ministry of Finance (MOF) jointly released “Certain Measures to Further Support Renewal of Large-scale...
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<Research>G Sachs Expects New Trade-in Measures for CN Consumer Durables to Have Positive Impact on Home Appliance Demand
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Positive
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Negative
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China’s National Development and Reform Commission (NDRC) and the Ministry of Finance (MOF) jointly released “Certain Measures to Further Support Renewal of Large-scale Equipment and Trade-in of Used Consumer Goods”. Goldman Sachs issued a report, expecting that the relevant measures will have a positive impact on consumer demand for home appliances and will be welcomed by capital markets, since this shows government is taking concrete measures to address domestic demand weakness.

The broker pointed out that there are many differences between the new measures and previous measures. Compared with the previous reliance on local government subsidies, this time the central government subsidies come from the issuance of ultra-long-term bonds, with the policy scale much larger than before. It can also help fuel demand in a wider range of regions, including regions that are unable to provide subsidies due to local financial hiccups.

Goldman Sachs assumed that the above-estimate stimulus measures will help boost domestic demand and provide protection against downside risks for related stocks. With most stocks trading below historical average, the broker saw favorable risk reward. It was particularly constructive on white goods stocks with resilient profits, attractive shareholder returns and benefits from the replacement policy.

The broker rated HISENSE HA (00921.HK)  0.000 (0.000%)    Short selling $24.98M; Ratio 35.475%   and HAIER SMARTHOME (06690.HK)  0.000 (0.000%)    Short selling $71.16M; Ratio 23.128%   at Buy with target prices of $35 and $33, respectively.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-09-05 16:25.)

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