China Consumer Stimulus Program Boosts Home Appliance Stocks
China’s economic policy for 2025 includes an expanded consumer stimulus program that analysts believe will benefit certain stocks in the home appliance industry. While direct cash handouts to consumers have been ruled out, the government has initiated a subsidy program for home appliance purchases, including products like microwaves, water purifiers, dishwashers, and rice cookers. Leading manufacturers such as Midea, Gree, and Haier are expected to see increased sales as a result of these measures.
Stock Projections
Morningstar equity analyst Jeff Zhang predicts a positive impact on revenue for Midea, Haier, and Gree, with potential stock price increases. Shares of Midea, Haier, and Gree all have upside potential based on price targets from both Morningstar and Citigroup analysts. However, risks such as price wars and real estate market fluctuations could affect stock prices.
Consumer Demand and Stimulus
Consumer demand in China has been lackluster, with household focus on future income amidst the ongoing pandemic. The consumer stimulus policy aims to support trade-in subsidies for home appliances, with specific product categories eligible for subsidies. E-commerce platforms like JD.com and Alibaba are expected to benefit from the program, particularly given their strong supply chain capabilities.
Outlook for E-Commerce Platforms
JD.com is highlighted as a top pick for playing the consumer stimulus program, while Alibaba is also seen as a beneficiary due to its strong relationships with major brands. Pinduoduo (PDD) is expected to benefit less compared to JD.com and Alibaba. Analysts have set price targets for JD.com and Alibaba, indicating potential upside from current stock prices.