Decline in raw material prices

Under the pressure of poor terminal sales, listed companies in the home appliance industry are making difficult adjustments in the first half of the year, and sales of air conditioners, refrigerators and other major categories have declined in the first half of the year. As a whole, the operating income of listed companies in the home appliance industry remained flat or slightly lower in the first half of the year. However, benefiting from factors such as the decline in raw material prices, net profit is expected to increase by more than 10%.

Haitong Securities expects that the annual operating income of listed companies in the home appliance industry will be close to 500 billion yuan, a year-on-year increase of 4%, and net profit will exceed 20 billion yuan, a year-on-year increase of approximately 16%.

Overall decline in sales

From the sales data in the first half of the year, the sales of all categories of household electrical appliances declined almost entirely, and only LCD TVs saw a slight increase.

According to the data, the output of household air conditioners in May was 11.52 million units, a year-on-year decrease of 7.4%. In May, the sales volume was 12.19 million units, of which 6.57 million units were sold internally and the export volume was 5.62 million units, which still continued the downward trend since the beginning of the year.

Guo Zhigang, a researcher at Guodu Securities, believes that in the first 10 months of cold 2012 (August 2011 to May 2012), the total output of home air conditioners in the country was 83.41 million units, a year-on-year decrease of 10.5%. After June, the season for production and sales of home air conditioners was over. Taken together, the negative growth trend of air-conditioner production and sales in the cold year of 2012 is basically determined.

The export market that occupies half of the country is not optimistic. In the first five months, the total export volume of household air conditioners was 26.83 million units, a decrease of 7% year-on-year, and the decline was larger than the 5.3% decline in the domestic market over the same period. In the first 10 months of 2012, the accumulated export volume of household air conditioners was 38.35 million units, a year-on-year decrease of 9.8%.

In the washing machine market, sales of washing machines in May were 4.17 million units, an increase of 8% year-on-year and a 15% drop from the previous month. Among them, the domestic shipments of washing machines in May reached 2.31 million units, an increase of 0.1% year-on-year, a decrease of 30% from the previous period; sales volume in the first five months decreased by 3.8%.

However, the export of the washing machine market is a major bright spot. In May, washing machine exports reached 1.86 million units, a year-on-year increase of 20% and a month-on-month increase of 16%. From January to May, cumulative exports increased by 15% year-on-year.

Color TV is considered the best performing major in the first half of the year. From January to May, China's LCD TVs exported 202.5 million units, an increase of 13% year-on-year; cumulative domestic sales were 15.47 million units, down 1% year-on-year.

According to Yang Zhigang, a researcher at Guodu Securities, the main reason for the increase in export volume of color TVs is that Japanese TV makers gradually withdrew from TV manufacturing, and the proportion of global television brand manufacturers commissioned by OEMs has gradually increased from 25% in 2009 to around 40%, and large scale in Europe and America. Chain retailers skip importers and purchase directly from Chinese manufacturers.

Increase in gross margin

Changjiang Securities believes that despite the pressure of sales, but in the case of falling raw material prices, the level of the gross profit margin of major white electricity companies will be significantly increased, which will significantly increase the profit of listed companies.

Changjiang Securities estimates that if steel prices fall by 5%, copper prices drop by 18%, plastics drop by 10%, and aluminum drops by 14%, the gross profit margin of air-conditioning companies is expected to increase by 4.66 percentage points from 20% to 24.66%. In terms of cost, steel accounts for nearly 30% of air-conditioning, copper accounts for nearly 20%, plastic accounts for 10%, and aluminum accounts for 6%.

In addition, the home appliance industry also has high expectations for ongoing energy-efficient promotion subsidies.

According to the person in charge of Skyworth, since June 1st, the company has spared no time in preparing the energy-saving products that have won the bid, sticking energy-saving and price-enhancing stickers on the back cover and outer box of the machine to carry out obvious identification.

Chang Ming, Chief Technology Officer of Changhong Home Appliance Industry Group, introduced that the first batch of promotional catalogues just announced showed that among all the energy-saving products declared by home appliance companies, the company’s 213 refrigerators, 24 freezers, and 53 washing machines have won the bid for 290 products. The list leads the industry.

"This symbolizes that Changhong's full-scale industrial chain strategy has worked, and it has won a lot of strategic successes at the beginning of the new energy-saving policy. Changhong has promoted the transformation and upgrading of the integrated energy efficiency industry from the core device to the complete machine with its unique industry-wide industrial chain advantage. The implementation of the energy-saving and people-friendly project will further drive Changhong to enhance the advantages of the entire industry chain."