subject: Appliances In The Second Quarter Because Of Slower Growth And Investment Advice [print this page] Air conditioning Air conditioning
, Refrigerator, washing machine and other white
Home Appliances
Second-quarter domestic sales growth slowed, because of the following points: in the first quarter is expected to slightly positive air conditioning dealers, delivery volume higher; air conditioning sales accounting for the higher rainfall south ones, on the air conditioning sales have a negative impact; inflation inhibition of terminal economic environment consumer demand, and the weather is not very strong correlation
Refrigerator
,
Washing machine
And other large home appliances sales in May also found a sharp slowdown in growth.
Industry will enhance the advantage of the plight of the brand market position. (1) 34 Market growth is still good growth in 12, with 34 network advantage of the brand will continue to benefit. (2) The industry needs to end and cost-side pressures will promote the survival of the fittest. Market hot for many small and medium born brand is being phased out, industry growth is still the best brand Gree, Haier, Midea brand this line. (3) growth of high-end products well, but the growth of foreign brands than domestic brands, why not? Cost pressures, the foreign brands trying to pass through price increases cost pressures, but the economic downturn affecting the demand experience, pass the conductivity weaker, while the relative advantage of a price advantage of domestic brands is made for better performance.
Steady growth the first half. Although the May trade data disclosed by a wide margin decline, but the first 5 months of comprehensive point of view, the growth rate remained relatively stable. In addition to air conditioning, the total sales of home appliances continues to maintain growth above 20% growth. Air conditioning factors by short-term weather a temporary downturn. Although the air conditioning because of the weather factors that causes low growth in the short term the situation there, but the view from the price movements of air conditioning products, 1-May, the average rose nearly 5%, still continue to optimize the product structure. Improve the energy efficiency of air conditioning industry is facing the industry upgrade.
Valuation discount relative to the market has been low by historical standards. From a valuation perspective, the current
White
Valuation of the company relative to the historical perspective has been a significant discount (white valuation relative to the market valuation of 0.86 times the historical average multiple of 0.91 times), we believe that there is underestimation of the value, not much room down is the safer side defensive industry configuration. If the real estate of the second half in line with our expectations, that is an area of real estate sales down 10%, corresponding to 2.5% decline in air conditioning demand, then sales growth will be better than market expectations, the industry will rebound in the best catalyst for the valuation.
Our four key tracking performance of the company's mid-year report is still good growth: expected Gree, Supor, Midea and Haier's revenue growth was 30%, 35%, 50%, 25 %; net profit growth of 100%, 35%, 30% and 35%.
Investment case
Investment rating and valuation
The short term, our industry's rating to "neutral." Encounter the second quarter, "cool summer" weather blow, industry growth is slowing down, while the economic slowdown, demand for various types of home appliances significant signs of slowing.
White according to the history of valuation, we believe that valuation than the market currently white overall valuation discount level is already lower than the historical average (white valuation relative to the market valuation of 0.86 times the historical average multiple of 0.91 times), the valuation is safer. If growth in the second half of the industry trends better than the second quarter, the valuation will rebound.
Key assumptions point
Assumptions within the real estate sales on the impact of air conditioning lagged half a year, and decoration-driven air-conditioning demand of new homes accounted for 25%; export growth is consistent with the first half; products on schedule to achieve structural adjustment to the pressure of rising costs for raw materials pass .
Different from the general public's understanding
Market may think: in the first half of the growth trend is likely to mean that white industry growth inflection point, a serious slowdown in growth will be the trend, and the real estate industry's negative impact on the air conditioning will be larger, interim results will be lower than the industry expected.
Appliances In The Second Quarter Because Of Slower Growth And Investment Advice
