Analysts are optimistic about specific stocks benefiting from China’s new consumer stimulus plan aimed at boosting economic growth.
Beijing: China kicked off 2025 with a new consumer stimulus plan that analysts think could really help certain stocks. Instead of giving cash directly to people, the government has been offering subsidies for home appliances through a trade-in program. Recently, they added more items like microwaves and dishwashers to the list of products eligible for up to 20% off the retail price.
Morningstar’s analyst, Jeff Zhang, believes this will mainly benefit top home appliance makers like Midea, Gree, and Haier. He even raised his revenue forecasts for these companies by 2% to 5% for the next few years. Midea’s shares jumped nearly 38% last year, and they could rise another 26% based on Morningstar’s price target. Haier’s shares also did well, with a potential upside of 48% from their current price.
Citigroup analysts are on board too, keeping their buy ratings for these three stocks after the stimulus announcement. They have even higher price targets than Morningstar. However, they warned that price wars and a weak real estate market could hurt stock prices. Consumer demand in China has been pretty slow since the pandemic, with home appliance prices dropping 3.3% in December compared to last year.
China is set to release retail sales and GDP numbers soon, and the new policy allows consumers who got subsidies last year to enjoy them again this year. The government has already set aside a whopping 81 billion yuan for these trade-in subsidies through the Spring Festival.
On the e-commerce side, JD.com is seen as a top pick for benefiting from this stimulus plan, thanks to its strong supply chain and experience with trade-in programs. Alibaba is also expected to gain from the policy, especially through its Tmall platform. Citi has set ambitious price targets for both JD.com and Alibaba, suggesting significant upside potential for investors.
