China home appliances:Why underlying demand should be stronger than CMM’s Oct data?

Our primary valuation methodology is DCF, which captures the future cashflow of white goods companies. We also use PE multiples as a cross-check.

    Downside risks include a macro economic slowdown, a weak property market,hikes in raw material prices and fierce competition. Upside risks: better thanexpected distribution efficiency for Haier Electronics’ logistics business. Betterwashing machine volume demand that will drive the OEM business. Strongersynergy between Qingdao Haier and Haier Electronics.