China’s economic policy kicked off 2025 with an expanded consumer stimulus package that analysts expect will benefit a handful of specific stocks. Although the country has refused to hand out cash directly to consumers, it has subsidized some appliance purchases through a trade-in program since late summer. Officials on Wednesday added microwave ovens, water purifiers, dishwashers and electric cookers to the existing list of eight product categories eligible for subsidy of up to 20% of the retail price. “The new measures should mainly benefit leading home appliance manufacturers such as Midea, Gree and Haier,” Morningstar equity analyst Jeff Zhang said in a midweek report. The two companies are China’s top three air conditioner makers based on last year’s revenue. . “We raise our 2025-28 revenue forecasts for Midea, Haier and Gree by 2%-5% to reflect higher sales expectations,” said Zhang, who also raised his 12-month target prices for all three stocks. Midea’s Hong Kong-listed shares rose nearly 38% last year. Based on Morningstar’s price target of HK$96.70, the company’s shares could soar about 26% from Friday’s closing price. After rising 29% last year, Haier’s Hong Kong-listed stock price still has nearly 48% room to rise based on Friday’s closing price and Morningstar’s target price of HK$38.90. Last year, the share price of Gree Electric Appliances, which was listed in Shenzhen, surged nearly 50%. Morningstar’s target price is 51 yuan, which is about 10% higher than last Friday’s closing price. Citigroup analysts maintained buy ratings on three Chinese home appliance stocks following Wednesday’s announcement of consumer stimulus plans. Citi’s target prices for all three are higher than Morningstar’s: Gree’s target price is 64.50 yuan, Haier’s is 50.60 Hong Kong dollars, and Midea’s is 119.30 Hong Kong dollars. Growth Risks However, Citi warned that price wars and further weakness in the housing market could also weigh on share prices. According to official data released on Thursday, home appliance prices fell 3.3% year-on-year in December. The data underscore that consumer demand in China remains sluggish since the outbreak as households remain focused on future income. China will release retail sales and full-year GDP data on Friday, January 17. The eight product categories that made the list last year were refrigerators, washing machines, televisions, air conditioners, computers, water heaters, household stoves and range hoods. Officials said on Wednesday they had allocated 81 billion yuan ($11.05 billion) to support trade-in subsidies during this year’s Spring Festival period, which runs from late January to early February. The full-year subsidy will be announced at the annual council meeting in early March. Over the past few months, China’s major e-commerce platforms have highlighted how they benefit from trade-in subsidy programs. Among these companies, JD.com remains the top choice among Citigroup analysts when it comes to implementing consumer stimulus plans in the coming year, according to a Jan. 8 report. “JD.com is relatively better/well-positioned to benefit from the continuation of this supportive trade-in program, especially given its prior experience, prepared systems and procedures, and strong supply chain capabilities to meet the demand for new trade-ins. “Growing demand for trade-in programs,” Citi analysts said. More electronics, less food Relative to peers, JD.com tends to sell more electronics and home appliances than clothing or food. But as e-commerce platforms have grown over the years, there has been more and more product overlap. Alibaba is Citigroup’s second-favorite e-commerce company amid China’s consumer stimulus policies. The online shopping giant sells products from big brands on its Tmall platform and from smaller merchants through Taobao. “Alibaba may also benefit from active policies due to Tmall’s strength with major brands and its large distributors,” analysts said. They expect Pinduoduo to benefit less relative to JD.com and Alibaba. Citi has set price targets on JD.com’s U.S.-traded American depositary receipts at $51 and Alibaba’s ADRs at $133, implying upsides of 54% and 65%, respectively, from Friday’s closing price.
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