Huachuang Securities released a research report stating that leading white goods companies are currently at a resonance point characterized by solid fundamentals, positive feedback from capital flows, and historically low valuations. Whether viewed from the demand for bottom-position allocation in insurers' FVOCI accounts or the expansion红利 from passive ETFs, these leading white goods companies possess extremely high strategic allocation value. The firm recommends watching: Midea Group Co.,Ltd. (000333.SZ), Haier Smart Home (600690.SH), and Gree Electric Appliances (000651.SZ).

Changes in capital structure are shifting pricing power towards insurance funds and passive funds, placing white goods leaders on the eve of a valuation reshuffle, with their value anchor potentially rising by up to 10% annually. The market generally focuses on the fundamental resilience of white goods but overlooks structural changes in capital flows: the passive expansion of broad-based ETFs and the allocation needs of insurers' FVOCI accounts. The firm estimates that under pessimistic/neutral/optimistic scenarios, public and insurance funds will bring net inflows of 110/154.4/222.8 billion yuan into the home appliance sector over the next three years. Based on the inelasticity hypothesis of the A-share market (with a capital multiplier of approximately 4.0x), capital flow factors alone could theoretically support an annualized 10% upward shift in the sector's valuation anchor under a neutral scenario.

The resonance between insurers' FVOCI accounts and the replenishment and expansion of public funds is becoming the most significant marginal variable. The public fund sector is experiencing dual benefits from the passive rise and active replenishment. On one hand, the trading volume proportion of the TMT sector has exceeded 30%, touching a crowding red line, potentially opening a window for style rotation; active funds' allocation to home appliance leaders remains below their CSI 300 weight (e.g., Midea is under-allocated by 0.48 percentage points), and mean reversion is expected to bring 21.3 billion yuan in incremental funds to the home appliance sector. On the other hand, broad-based ETFs contributed 63% of the scale increase in the ETF market; natural expansion of broad-based ETFs alone could bring 33.2 billion yuan in passive buying to the home appliance sector over the next three years. Driven by new accounting standards, insurance companies are significantly increasing their allocation to high-dividend assets classified under FVOCI to smooth profit volatility. The firm estimates that the equity allocation within insurers' FVOCI accounts has grown from 27% in H1 2024 to 40%. Under a neutral assumption (20% of new premiums entering the market, with a 5% allocation to home appliances), insurance funds will inject 99.9 billion yuan of long-term capital into the home appliance sector over the next three years, becoming the core ballast for pricing.

White goods leaders possess significant safety margins. The firm constructed a static calculation model that excludes earnings growth and valuation expansion expectations, using only dividends and share buybacks as return sources. The results show that among the screened pool of 275 core assets, the expected 2025 returns for Gree Electric Appliances, Midea Group, and Haier Smart Home reach 7.2%, 7.1%, and 4.5% respectively, ranking 8th, 10th, and 133rd. Based solely on capital flows, white goods leaders can still provide a benchmark annualized return of 4%-8%, offering a clear safety cushion relative to the ten-year government bond. Furthermore, the endogenous growth potential brought by the global layouts of white goods companies will provide additional earnings elasticity to investment portfolios.

Risks include: significant fluctuations in raw material prices; unexpected changes in overseas tariff policies; slower-than-expected recovery of the real estate market; slower-than-expected pace of insurance fund entry into the market; and risks associated with calculation limitations and assumption deviations.