Three factors to boost home appliance industry's recovery in the third quarter

It is understood that since the fourth quarter of 2011, the home appliance industry has finally shown signs of recovery. In the financial forecast for the third quarter of 2012 disclosed by 49 companies in the appliance sector in Shanghai and Shenzhen, there were 22 companies with “pre-hi”. According to the analysis of relevant persons, under the three major forces of slowdown in real estate sales, low prices of raw materials, and initial success of the stimulus plan, the home appliance industry may gradually recover.

Three factors boost the home appliance market:

“The reason for the warming signal in the third quarter was mainly from the real estate market.” Ren Minqi, a researcher in the home appliance industry of China Investment Advisors, said in an interview with the China Daily News recently, “The trend of the home appliance market has always been closely related to the real estate market. In the first half of this year, Shanghai , Hainan, Henan and many other places have exposed the information on the real estate trading market to pick up, and thus the pull of the home appliance market should not be underestimated."

According to the “China Housing Development (2012) Report” previously published by the Institute of Financial and Economic Strategy of the Chinese Academy of Social Sciences, the pressure on real estate inventory continued to increase in the first half of the year, and demand rebounded too quickly, and the volume has recovered.

In addition, according to Liang Zhenpeng, a veteran industry observer, the decline in the prices of major raw materials needed to produce home appliances has also lowered the production costs of home appliance companies to a certain extent, which has led to a good financial performance. Information from Wanwei's home network showed that the prices of copper, aluminum, plastics and cold-rolled steel sheets fell by 24.51%, 17.99%, 15.30% and 12.83%, respectively, compared with the 2011 highs. "The cost reduction will boost the overall profitability of the industry, so that home appliance companies can maintain a higher gross margin." He said.

According to Liu Yong, general manager of Chongqing Suning Appliance, in terms of the end market, the energy saving subsidy policy has become increasingly evident in the home appliance market after four months of release. “On the one hand, the energy-saving and subsidy policy is formally implemented from June 1 this year. The terminal channels basically introduced corresponding supporting measures in July. On the other hand, companies need to make corresponding adjustments to the energy-saving product market. There was a time lag in the middle, which led to the misreading of policies that did not give force to the public when the policy was first introduced."

According to statistics from Ovid Consulting, from the perspective of TV sales before and after the implementation of the New Energy Efficient Economy, in May of this year, TV sales in the domestic market recorded a negative growth of 19% month-on-month, a negative 11% month-on-month increase in June, and sales in July started. It rose to 12%, and the momentum for continued recovery in August was 13%.

"The three factors overlap, the home appliance market is picking up gradually." Xiong Qi believes that while many people in the industry interviewed by the Commercial Daily reporter said that the home appliance industry's warming trend should be more fully demonstrated in the fourth quarter of this year .