Air-conditioning industry gross profit margin declines cautiously start the Big Five

On August 31st, Midea Electric (000527 SZ) and Qingdao Haier (600690. SH) also issued semi-annual reports, together with Gree Electric, Chigo Air-Conditioning, and Hisense Kelon, which previously released semi-annual reports, and semi-annual reports of five major air-conditioning listed companies. Shows that the air-conditioning industry in 2011 grew at a rapid pace and its gross profit margin declined overall.

In the first half of 2011, the sales volume of air conditioners of Midea Electric and Gree Electric Appliances respectively reached 42.516 billion yuan (up by 64.44% year-on-year) and 37.2 billion yuan (61.86%), which further widened the sales gap with the second tier.

The second camp Qingdao Haier's air-conditioning business revenue reached 8.25 billion yuan (a year-on-year increase of 34.23%), Zhigao's sales revenue reached 5.529 billion yuan (18.6%), and Hisense Kelon had a sales position of 4.27 billion yuan (36%). Ranked sixth in the industry.

GF Securities pointed out that domestic household air conditioners and central air-conditioning markets have maintained rapid growth due to stimulation of domestic demand for household appliances, old-for-new trades, and energy-saving benefits, while the growth rate of overseas markets dominated by emerging markets has been even higher.

However, due to rising costs of raw materials, labor, etc., due to rising costs of raw materials, labor, etc., due to the appreciation of the renminbi due to exchange losses, the end of June this year, the end of energy-saving policy has also made the industry worse, which directly led to a straight decline in its industry gross margin.

The semi-annual report shows that the gross profit margins of Gree Electric Appliances and Midea Electric Appliances air-conditioning business were only 15.34% and 17.99%, respectively, which was a year-on-year decline, while Zhigao and Hisense Kelon were only 14.5% and 13.94%, respectively. The gross profit rate of Qingdao Haier, which is positioned in the mid-to-high end, reached 22.95%, but it also decreased year-on-year.

According to relevant sources of Midea Electric, although the unit price of air conditioners in the cold year of 2011 increased year-on-year, the overall gross profit margin of its industry is still declining. However, the rapid growth of the industry has obscured the problem.

With the advent of a new round of sovereign debt crisis, and the withdrawal of domestic policies to stimulate domestic demand at the end of the year, as well as real estate regulation, the growth rate of the air-conditioning industry has slowed since July this year.

Industry online research report pointed out that in July 2011, the total output of household air conditioners was 9.63 million units, a year-on-year increase of 19.45%, of which domestic sales were 5,988,000 units, an increase of 30.19% year-on-year, and exports were 3,148,000 units, an increase of 7.45% year-on-year. About 40% of the half year fell to 7.5% in July. Although the domestic market grew rapidly, some second-tier brand sales began to decline.

According to Wang Jinliang, vice president of the China Refrigeration Appliances Group's China Marketing Headquarters, “All the air-conditioning industries starting from August are very cautious about the start of the 2012 air-conditioning industry. It is expected that the growth of the home air-conditioning industry will drop to around 10% next year, including policies. Uncertain factors are increasing, and in order to avoid inventory crisis, air-conditioner manufacturers have begun to contract in addition to other areas such as inverter air conditioners.