Statistics of the Shanghai Securities News shows that 42 listed companies in the household electric appliance (HEA) industry have disclosed the 2016 annual results announcements, of which 30 estimated performance growth throughout the year, and 3 turned deficit into profit. Significantly, performance growth of 24 listed companies is attributable to the growth of revenue from main business. Such companies are mostly distributed in white household appliance, kitchen & bathroom electric appliance and HEA fittings sectors.
Since the second half of 2016, the industry chain of white home appliance has remarkably picked up, especially the air conditioner complete machine and upstream parts sectors, which saw rapid rebound in shipment in Q4 2016. Monitoring data of chinaiol.com shows that the shipment of air conditioner in the second half of 2016 increased by 30.2 percent, reversing the downtrend and driving the shipment throughout the year to increase by 1.93 percent year on year. The shipment of washing machine has significantly increased in Q4 2016, leading the whole year shipment to increase by 6 percent year on year; shipment of refrigerator started to grow in Q4 2016, resulting in the shipment of the whole year to increase by 1.65 percent year on year.
Net profits of a number of listed companies in the white home appliance industry chain witnessed rapid growth in Q4 2016. Shanghai Highly (Group) Co., Ltd. (600619.SH) estimated that net profits for 2016 will increase by 130 percent to 160 percent year on year, primarily due to the growing demand in the air conditioner market in the second half of 2016, and the year on year growth of the production and sales of the company’s air conditioner compressor and electrical machine also jumped. Sales of large air conditioner compressor in particular boosted the performance growth of the company. Hisense Kelon Electrical Holdings Co., Ltd. (00921.HK; 000921.SZ) estimated 80 percent to 100 percent growth of net profits for the whole year of 2016, primarily due to the year on year growth of revenue in the first three quarters of the reporting period, year on year growth of gross margin and significant year on year growth of profits. During reporting period, revenue growth of refrigerator and air conditioner was still above the growth of the whole home electric appliance industry.
Prosperity of the upstream parts industry also improved as a result of the recovery of the overall white home appliance industry. Monitoring data of chinaiol.com indicates that the total output of the air conditioner sector has increased by 15.77 percent throughout 2016, and the sales volume has increased by 13.62 percent year on year. The total output from August to December 2016 has increased by 46.87 percent year on year, and the sales have increased by 44.63 percent year on year. Viewing from the air conditioner complete machine market in this January, manufacturers’ stock and production implied an uptrend, and production scheduling is increasing. Most manufacturers still maintained high-level of production plan for this January. Institutions are in the view that the restocking cycle of the air conditioner sector is expected to last until the middle of the year.
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