- China top leaders called for measures to support equipment upgrade, consumer goods trade-in and lowering logistic cost
- Consumer trade-in program will be focus on car and home appliance; central and local governments will provide fiscal supports
- Positive to market sentiment with potential beneficiaries incl Haier Smart Home (6690.HK), BYD (1211.HK), Li Auto (2015.HK), CIMC (2039.HK), SF Holding (002352 CH), ZTO Express (2057 HK)
What’s new
Central Financial and Economic Affairs Commission held a meeting chaired by President Xi Jinping on Feb 23. The meeting called for 1) a large-scale equipment upgrade and consumer trade-in program, 2) lower logistic costs to boost competitiveness of key industries and improve effectiveness of economy. The consumer trade-in program will be focused on home appliance and cars and will receive fiscal supports from both central and local governments.
Our take
This initiative will be positive to market sentiment as investors await fiscal support to stabilize the economy. Beneficiaries including 1) home appliance companies, such as Haier Smart Home (6690.HK), Midea (000333.CH), 2) car makers include BYD (1211.HK), Li Auto (2015.HK), Xpeng (9869.HK) equipment makers incl. CIMC (2039.HK), 4) logistic companies like SF Holding (002352 CH), ZTO Express (2057 HK) and JD Logistics (2618 HK).