Sector Research | China Home Appliance THIS IS THE TRANSLATION OF A REPORT ORIGINALLY PUBLISHED IN CHINESE BY GUOSEN SECURITIES CO., LTD ON SEPTEMBER 24, 2012 October 16, 2012 Home Appliance Cautious Buy Cherry pick home-appliance names amid the price corrections Investment highlights Analyst Wang Nianchun We expect home-appliance y-o-y sales volume growth to rebound moderately +755-82130407 in 4Q 2012. Based on our channel checks and data already released for Jul-Aug
[email protected] S0980510120027 2012, 3Q sales volume of various sub-sectors was in line with expectations, and the profitability of the TV sub-sector slightly beat expectations. The subsidies for energy efficient home-appliance products introduced in June are unlikely to materially boost sales until three to six months after their launch. We expect the 4Q y-o-y sales Sales Contact volume growth of air conditioners, refrigerators, washing machines and LCD TVs will be 7.5%, 5.8%, 5.0% and 0.8% respectively, representing a modest rebound from the Roger Chiman Managing Director first three quarters. +852 2248 3598
[email protected] Divergence within the sector intensifies, and we suggest waiting for buying Chris Berney opportunities amid price pullbacks. The overall industry sentiment has been tepid Managing Director +852 2248 3568 since the beginning of 2012, but product-mix upgrade and lower material costs could lead
[email protected] to an improvement in profitability this year. Based on our estimates, subsidy policies for Andrew Collier energy efficient home-appliance products will have more significant effects in 2013 than Director +852 2248 3528 this year.