Huachuang Securities: Baidian's leaders all have extremely high strategic allocation value. It is recommended to focus on Midea Group (000333.SZ), etc.

The Zhitong Finance App learned that Huachuang Securities released a research report saying that Baidian is at the resonance point of stable fundamentals+positive financial feedback+historically low valuation. Whether judging from the bottom position allocation requirements of insured FVOCI accounts or the expansion dividends of passive ETFs, Baidian has extremely high strategic allocation value. The bank suggests paying attention to: Midea Group (000333.SZ), Haier Smart Home (600690.SH), and Gree Electric (000651.SZ).

The main views of Huachuang Securities are as follows:

Capital structure changes, pricing power is being transferred to insurance capital and passive funds. White power is on the eve of valuation restructuring, and the value center has increased or reached 10% annualized

The market is generally concerned about Baidian's fundamental resilience, but it ignores changes in the capital structure: passive expansion of broad-based ETFs and allocation requirements for insurance-funded FVOCI accounts. The bank estimates that under pessimistic/neutral/optimistic assumptions, public funding and insurance capital will bring a net inflow of 1,100/1544/222.8 billion yuan to the home appliance sector in the next three years. Based on the inelastic hypothesis of the A-share market (capital multiplier is about 4.0 times), capital factors alone can theoretically support the upward shift in the sector's valuation center of 10% per annum under a neutral scenario.

The resonance between insurance FVOCI accounts and public fund reimbursement and capacity expansion became the biggest marginal variable

Public placement has ushered in the double benefits of passive rise and active compensation: on the one hand, the TMT sector's turnover exceeded 30% and hit the red line of congestion, and the active fund's configuration of home appliance leaders is still lower than the Shanghai and Shenzhen 300 weight (such as Midea's low 0.48pct). The return to average is expected to bring an increase of 21.3 billion yuan to the home appliance sector; on the other hand, broad-based ETFs contributed 63% of the ETF market's size increase in the next three years. Passive purchases of 33.2 billion yuan. On the insurance side, driven by the new accounting standards, the allocation of high-dividend assets included in FVOCI was drastically increased in order to smooth profit fluctuations. The bank estimates that insurance FVOCI stock positions have grown from 27% to 40% in 2024H1. Under a neutral assumption (20% additional premium entry, 5% home appliance allocation), insurance capital will inject 99.9 billion yuan into the home appliance sector in long-term capital over the next three years, becoming the core ballast stone for pricing.

White electric faucets have significant safety margins

The bank has constructed a static calculation model that excludes expectations of performance growth and valuation expansion, using only dividends and repurchases as sources of return. The calculation results showed that out of the 275 core asset pools selected, Gree Electric, Midea Group, and Haier Smart Home had expected returns of 7.2%, 7.1%, and 4.5% respectively in 2025, ranking 8th, 10th, and 133rd. From a financial perspective alone, Baidian can still provide an annualized benchmark return of 4%-8%, which has a clear safety cushion compared to ten-year treasury bonds. Furthermore, the endogenous growth potential brought about by Baidian's global layout will provide additional income flexibility to the investment portfolio.

Risk warning: Prices of raw materials fluctuated greatly; changes in overseas tariff policies exceeded expectations; the recovery of the real estate market fell short of expectations; the pace of insurance capital entry fell short of expectations; calculation limitations and risk of hypothetical deviations.