Household Electrical Appliance Enterprises: The Key Is To Raise The Profitability Of The Business

Although some home appliances company performance

bright, but low levels of gross margin

Net profit up 231% year on year growth, Sichuan Changhong's semiannual reports indeed some bright spots.

Be fair, in the event of heavy losses experienced after Apex, Changhong, led by the Young Marshal Zhao Yong really have a lot of changes. Changhong's business is no longer confined to

TV Industry, market leader in the first half

Air conditioning Revenue grew 99.24%, while in semi-annual report of the emerging distributors of IT products account for the company's total business has also

Sell Income, 11.20%, 3C industry groups are also frameworks. However, difficulties have really gone yet?

Indeed, while the Sichuan Changhong TV business in the first half of the gross margin increased by 1.67 percentage points, but with the same industry

Hisense Compared with electrical or gap, and Hisense in the first half of the gross margin increased by 3.08 percentage points. The air-conditioning business, the Sichuan Changhong has made 99.24% in the first half despite the good growth year on year gross margin has decreased by 1 percentage point. IT product distribution business, although not a small contribution to total sales revenue, gross margin, but after all, is very low, only 8.05%.

Color TV industry in the high-end benefit

Semi-annual report from the disclosure of view, several TV manufacturers have made the first half was good growth. In addition to outside Sichuan Changhong, Hisense Electric in the first half net profit rose 108.98%; Xiamen Overseas Chinese Electronic increase also reached 89.80%.

This year, domestic color TV market to

Liquid crystal And represented the high-end plasma flat panel TV production and sales continued to maintain a rapid growth rate, which, LCD TV, whether domestic or exports are showing strong growth. With

Digital TV Technology, flat panel display technology and the rapid development of network technology, the domestic TV industry to upgrade the speed of product technology to further speed up. This allows to seize the initiative in the field of high-end manufacturers such as Hisense Electric current in the industry an advantage.

Hisense Electric semi-annual report shows that during the reporting period, the company sales structure to further improve television, television-end sales of over more than half of total sales, gross margin was 17.47% TV, 3.08 year on year increase percentage points. The PRC, according to statistics, as of June 2005, Hisense TV was significantly higher than the growth rate of the overall level of the industry, with sales growth exceeding the industry more than 30 percentage points; flat panel TV,

LCD Television, Hisense TV share of the domestic sales rankings are the first place.

"But the good times might not be too long, these high-end color TV giants to other areas is in fact not very high barriers to entry, Hisense has just as high-end

Strategy Implement than earlier, "concludes Guoxin Securities analyst Wang Nianchun said home appliance industry. In fact this year's flat panel TVs are Changhong rapid expansion and become a driving business growth in the company of television an important factor. Xoceco first half of the total sales of flat-panel TV income ratio has reached 55.83 percent in the first half.

Look from the semi-annual report, Xoceco, Hisense exports have dramatically increased in the first half. In the first half, Hisense color TV exports continued rapid growth of the scale of the development trend of export earnings grew 90%. Xoceco main business income from abroad is substantial increase in the 93.80 percent year on year, in addition to Europe and the United States and other developed countries

Trading Barriers other than Exchange rate Impact of changes in exports as new troubles.

Hisense says that China's RMB exchange rate system more flexible to implement reform measures to the company's export business and international brings uncertainties. One hand, strengthening of macroeconomic policies to avoid

Risk On the other hand to speed up overseas

Brand Bases, and expand overseas to enhance the scale of the capacity to resist risks. Xiamen Overseas Chinese also believe that, in the second half of the export business, for those who have signed

Contract Not yet delivered the export business, will have some loss of effectiveness.

Air-conditioning industry as a whole in the doldrums

2005 from January to June, China's air-conditioning industry as a whole show in the doldrums. Industry sales declined slightly by 0.8% year on year; foreign sales from January to June increased by 6%, in export growth than in 2003 and 2004 more than 50% growth. Capacity expansion in the air conditioning industry, the tide of domestic manufacturing capacity has emerged the overall surplus, sluggish domestic demand, foreign manufacturers export a realistic choice, but facing the international

Anti-dumping Forces and the rise of trade protection barriers obstacles

Overseas markets Expansion increases the difficulty and risk. The yuan's appreciation is undoubtedly more difficult.

"But not all is bad in the industry downturn, rising costs and product oversupply will stimulate the dual pressures of increased industry concentration, so has the size, brand and technological advantages of the company, production capacity are effective use and release ", Guoxin Wang Nianchun said.

"Looking in the second half of 2005, 2006, the air conditioning industry will further increase the intensity shuffle,

Competition Pattern of major changes will occur: horizontal integration has become an inevitable trend, the mainstream brands will be more stable market position, inferior brands further accelerate the pace eliminated ", Midea also said its semi-annual report in this way.

Air conditioner manufacturers in the first half of the situation is not optimistic. Aucma air conditioning business in the first half revenue fell 42.40 percent last year. Peel a small electrical appliance business, although the United States during the first half net profit rose 44%, but the total profit increase of only 12.8%, which on the one hand due to some differences in the company after the transfer of air-conditioning unit equity minority interests increased, and the other aspects of the company income tax on benefits received. First half 2005 effective income tax rate of 8%, 25% lower than the level a year earlier.

by: Frbiz

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