From January to April 2024, the home appliance sector rose by 19.54%, ranking first in the city, crushing hot sectors such as low-altitude economy and synthetic biology, and completely independent market.
Hisense Home Appliances, Midea Group, Gree Electric Appliances and other home appliance companies have been Changhong all the way in the past three years, and they are not at all bird the market index, and they have walked out of the momentum of giving up who else.
So, why is the home appliance sector performing so strongly?
Behind the favor of investors, of course, is the support of corporate performance.
In 2023, the net profit of Hisense Home Appliances will be 2.837 billion, a year-on-year increase of 97.73%, the net profit of Midea Group will be 33.72 billion, a year-on-year increase of 14.1%, and the net profit of Gree Electric Appliances will be 29.017 billion, a year-on-year increase of 18.41%.
In the first quarter of this year, the growth momentum of the three companies is still strong, the net profit growth rate of Hisense household appliances is nearly 60%, and Midea Group and Gree Electric Appliances are both above 10%.
So what is the reason for the performance of household appliance companies to be so bright?
From the composition of income, it can be seen that air conditioning has contributed the most to the performance of the three companies, accounting for 45.15% of revenue (Hisense Home Appliances), 43.31% (Midea Group), 74.13% (Gree Electric Appliances).
How does air conditioning drive the performance growth of the entire home appliance industry by itself?
The most obvious is the growth of air conditioning sales, and in 2023, air conditioning is the hottest category in the entire home appliance market.
In 2023, the production of household air conditioners will be 163 million units, a year-on-year increase of 12.3%; Sales were 157 million units, a year-on-year increase of 10.4%. Among them, domestic sales and shipments were 90.541 million units, a year-on-year increase of 12.9%; Exports were 66.405 million units, a year-on-year increase of 7.3%.
There are three reasons for the growth of domestic sales, one is that in 2022, due to special reasons, downstream demand will be squeezed.
Second, in the first half of 2023, there will be high temperature weather in China, and the rigid demand for air conditioning will increase.
The average shipment price of the domestic air-conditioning market in 2023 will be 2,780 yuan, a decrease of 8.56% compared with 3,040 yuan in 2022.
The increase in exports was mainly due to the decline in overseas air conditioning inventories, due to the consideration of replenishing inventories and the large depreciation of the RMB in 2023, which brought about a price reduction effect.
So, in 2024, can air conditioning sales replicate last year's high growth?
From January to March 2024, the cumulative production was 50.96 million units, a year-on-year increase of 19.6%. The cumulative sales volume was 51.07 million units, a year-on-year increase of 19.4%.
Among them, the cumulative domestic sales volume was 25.74 million units, a year-on-year increase of 17.0%; The cumulative export sales volume was 25.32 million units, a year-on-year increase of 21.8%.
Compared with 2023, it can be seen that the growth rate in the first quarter of 2024 is much higher than that of last year, whether it is domestic sales or exports. What's more, the weather in the first quarter was relatively cold, and the summer heat that began in May has arrived, and the demand growth for air conditioners will be stronger than in the first quarter.
In addition, local governments continue to increase their property market policies, completely cancel purchase restrictions, collect storage housing, reduce the proportion of down payments, etc., and the downstream real estate industry has begun to appear to be repaired.
Moreover, the special task of ensuring the delivery of the building was once again mentioned by the relevant departments, and the batch delivery of new houses is a great benefit and demand catalyst for the home appliance industry such as air conditioners.
In addition to benefiting from the growth of air conditioning sales, the increase in gross profit margin is also a very important factor.
Since 2021, the gross profit margin of the domestic air conditioning industry has continued to grow, especially in 2023, the gross profit margin growth rate will expand.
Taking the above three as an example, in 2023, Gree Electric Appliances, Hisense Home Appliances, and Midea Group will increase by 4.6, 2.7, and 2.73 percentage points respectively.
The improvement of the gross profit margin of the industry mainly depends on revenue and costs, in terms of revenue, the continuous growth of air conditioning sales has led to the rapid growth of revenue of domestic air conditioning enterprises.
In 2023, the revenue of the air conditioning business of Gree Electric Appliances, Hisense Home Appliances, and Midea Group will be 151.217 billion, 38.652 billion, and 161.111 billion, an increase of 10.82%, 10.74%, and 6.5% respectively.
In terms of cost, from the perspective of the cost composition of household air conditioning products, raw materials such as steel, copper, aluminum, and plastics account for almost 80% of the manufacturing cost of products.
Among them, copper accounts for about more than 20%, aluminum accounts for about 4%, and refrigerants account for about 1%. Copper accounts for the largest proportion, so the impact of copper prices on the cost of air conditioning is more direct and significant than that of other materials.
Since the second half of 2022, the prices of upstream raw materials such as copper and aluminum for air conditioners have begun to decline rapidly, and aluminum prices will remain low for a long time in 2023.
However, in the first quarter of this year, copper prices rose rapidly, bringing upward pressure to the cost side of air conditioning, which was reflected in the company's performance, and the profit growth rate of air conditioning companies in the first quarter did decline.
Everyone has an understanding of the overall profitability and prospects of the air conditioning industry, but to make an investment, it must be implemented to a specific company after all.
In the first quarter of this year, the brand pattern of the air conditioning market, especially the head brand pattern, showed almost the most drastic changes in recent years.
This change comes from the continued adjustment of the weight of online and offline channels, the continuous improvement of the online market, the high proportion, the fierce performance of Midea and Hualing in the online market, the continuous rise of the online market such as Hisense, TCL, Xiaomi, etc., as well as the development of waist brands and subsequent small and medium-sized brands.
In terms of sales volume, Midea increased by 4.1% year-on-year in the first quarter of this year, and its market share reached 24.58%, ranking first; Gree's market share was 19.87%, but it decreased by 5.93% year-on-year, ranking second; Midea's Hualing increased by 1.08% year-on-year, with a market share of 8.45%, third; Xiaomi increased by 2.61% year-on-year, with a market share of 7.78%, fourth; It can be seen that in addition to Midea's own market share close to the sum of the second and third places, it and its brand Hualing together account for about one-third of the market share, showing de facto dominance.
Among the top ten in the market, in addition to Midea, Hualing, and Xiaomi, TCL, Hisense, and Commander, which are ranked seventh to ninth, have also achieved growth respectively, with an increase of more than 1%. In addition, there are three to ten places in the market, and there is not much difference in share.
From the perspective of the performance and performance of the capital market,Hisense home appliances are very eye-catching。
In 2023, the net profit of Hisense home appliances will be 2.837 billion, a year-on-year increase of 97.73%. The net profit in the first quarter of this year was 981 million, a year-on-year increase of 60%.
In addition to the growth of air conditioning sales, the high growth of Hisense's home appliance profits is also an important reason for the growth of cost control and refrigerator business.
At the refrigerator business level, in 2023, Hisense's home appliance refrigerator business revenue will be 26.07 billion yuan, a year-on-year increase of 18.65%.
Hisense home appliances focus on built-in refrigerator products,According to Aowei cloud network,2022In 2022, the company launched11Rongsheng and 7 Hisense flat embedded products,Ranked first in the industry。
According to the company's 2023 annual report, Hisense503 vacuum fully embedded refrigerator entered the industry's monthly sales list TOP20 within 2 months of listing, and Rongsheng 605 flat embedded refrigerator reached TOP2 in single product sales in the refrigerator industry within one month of listing.
Compared with competing products in the same industry,Hisense built-in refrigerators are mainly small in size and large enough in volume ratio,Its price is lower than that of competing products with similar performance。
In terms of cost control, the company has significantly reduced sales expenses by virtue of its brand advantages and strengthened management, which has enhanced the company's overall profitability.
Hisense's home appliances are relatively diversified,And cater to market demand,Performance growth rate is higher than that of other companies in the industry,Growth can be more recognized by investors。
On the whole, the sales expectations of the air conditioning industry in 2024 are still relatively optimistic, but due to the impact of the geopolitical situation and the lower than expected interest rate cuts in the United States, the rise in the price of raw materials such as upstream copper and aluminum may eat into the profits of enterprises, which is a problem that all home appliance companies have to consider carefully.
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Source: Flying Whale Investment Research